Fte Model 101: Balancing Resource Capacity And Demand

By Author: Danny Johnsmith
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Undoubtedly, doctors and nurses are your hospital’s most valuable asset, and so are the medical billers and coders. With them, you could bill your services accurately and timely and generate revenue. However, they are also your hospital’s most expensive cost. If you don’t keep them busy and reap maximum benefits, they’ll eat away at your profits. You need enough medical billers and coders to capitalize on your opportunities, but only a few of them to sit on the bench. The conflict between hiring and firing is one of the most substantial and unresolved in running a successful healthcare organization. The resource capacity vs. demand equation must be solved to stay profitable and submit claims timely. The best way is to utilize the full-time equivalent model, i.e., the FTE model. Let’s have a deep dive into how to maintain such a balance between resource capacity and demand:
Resource Capacity
Any employee’s (medical billers and coders) capacity is the total number of standard hours an individual is available to work under the terms of the agreement. Hours, FTE (Full Time Equivalent), person days, people, ...
... and other units of resource capacity can be used.
Resource Demand
The process of calculating the resources needed to meet the demand for various billing and coding tasks is known as resource demand. The unit of demand for resources is measured in hours, FTE, person days, and so on.
Let’s begin with Calculations!
The timeline and availability of your resources are used to calculate resource capacity and demand. This includes accounting for any standards that were expected of them at the time. For example, a full-time employee (biller, coder, or both) might have a standard contract of eight hours per day, five days per week.
Some factors to consider when measuring people’s capacity are:
● Any full-time or part-time employees who are available.
● Contractors or temporary employees are available.
● Any planned leaves of absence or contract terminations.
The next step is to compute the resource demand. The resource demand includes the resources needed to complete the hospital’s various billing tasks (including coding). Demand is typically measured in terms of hours, FTE, or personal days. If a full-time employee works 40 hours per week and the billing requires 56 hours per week, the FTE for the project is 1.4.
These computations allow you to compare capacity to demand and create a forecast of resource capacity.
For instance, just because you have 03 team billers who are each contracted to work 40 hours per week does not guarantee that you will have 120 hours available for your billing and coding tasks. They may each commit to other operational tasks, such as providing services that limit their availability for additional work. While many factors go into calculating FTE model capacity and demand, once those are determined, the calculation to determine whether you will be short, over, or just right on resources is demand minus capacity. A positive number indicates you are short, whereas a negative number indicates you have more than enough.
The balance between Resource Capacity & Demand
It is the procedure of balancing the effort and time of the billing team with the requirements of the services to be billed for getting reimbursement from the insurance companies. In other words, it forecasts workforce resource (medical billers and coders) shortages or excesses in the short or long term. It is computed by analyzing the gaps between resource capacity and resource demand. This difference can be measured in hours, FTEs, or personal days.
There is a shortage when resource demand exceeds capacity or supply. Excessive resource demand exists when the resource demand exceeds the capacity or supply.
Why is balancing important?
A lack of proper resource planning can erode your doctor’s and physician’s efforts and eventually lead to zero or no reimbursements. Here is a step-by-step breakdown of how it can derail reimbursements:
● Poor planning will result in overworking and overscheduling the in-house billers and coders with conflicting priorities, eventually leading to exhaustion and burnout.
● When in-house team members are overworked and overscheduled, their morale suffers.
● With low morale, such team members cannot give their 100% in billing and coding work, leading to an endless rework cycle on claims submission.
● All this will enhance the time and cost for healthcare organizations, with a high risk of denials or rejections of claims.
Ensuring that medical billing teams have the right people and financial resources to submit accurate and timely claims is essential. It entails more than just comparing billers’ and coders’ work hours to medical billing requirements; it also includes generating a healthy, growth- oriented work environment. To begin with, contact the 24/7 Medical Billing Services team to understand and forecast your gap between FTE model resource capacity and demand.
Also Read: Full-Time Equivalent (FTE) Model

I am Danny Johnsmith & I work as a Healthcare Consultant with 24/7 Medical Billing Services. I have been working in the US Healthcare Industry for more than 4 years now & I excel in offering Revenue Cycle Management Services. Ideally, Physicians should be focusing more on Patient Care & spending very little time in the administrative tasks. But in reality, a lot of Physicians & Healthcare Providers are actually burdened with both – Patient Care & the Office Management to. And that’s where My services would be of real help for you… From Credentialing to Appointment Scheduling, From Medical Billing to ICD 10 Coding & From A/R Follow-ups to Denial Management, I can help streamline your entire practice performance. Be it DME Billing or Chiropractic or Mental Health, I have helped a few Providers boost their practice revenue by at least 50%.