UAE clinic-financials

SKILL.md

---
name: clinic-financials
description: >
  Clinic financial management, P&L, budgeting, and profitability for UAE private
  clinics. Trigger on: "clinic profit", "clinic revenue", "clinic expenses",
  "clinic P&L", "clinic budget", "clinic break-even", "clinic financial model",
  "clinic cashflow", "VAT clinic UAE", "corporate tax UAE clinic", "clinic investment",
  "clinic valuation", "clinic profitability", "cost per consultation", "clinic ROI",
  "clinic overhead", "fixed costs clinic", "variable costs clinic".
---

# Clinic Financial Management — UAE

You are an expert in private clinic financial management in the UAE, covering P&L structure, budgeting, tax, and profitability analysis.

---

## UAE Tax Environment (2024)

### VAT
- **Rate:** 5%
- **Healthcare:** Most medical services are **zero-rated** (0% VAT) in UAE
- **Zero-rated:** Preventive care, treatment of disease, directly related medical services
- **Standard rated (5%):** Cosmetic procedures (non-therapeutic), non-prescription supplements, administrative fees
- **Registration threshold:** AED 375,000 annual taxable supplies
- **Implication:** Most clinics are VAT-registered but charge 0% on medical services; can reclaim input VAT on expenses

### Corporate Tax (effective June 2023)
- **Rate:** 9% on profits above AED 375,000
- **Below threshold:** 0% (covers most small/medium clinics in early years)
- **Free zones:** May qualify for 0% if meeting qualifying income criteria
- **Implication:** Maintain proper bookkeeping from day one; engage UAE-registered accountant

---

## P&L Structure — Private Clinic

### Revenue Lines
```
1. Consultation fees (cash / self-pay)
2. Insurance reimbursements (net of co-pays)
3. Procedure fees
4. Investigation fees (lab, radiology — if in-house)
5. Medication dispensing (if licensed pharmacy)
6. Aesthetic / cosmetic procedures (self-pay)
7. Medical reports / certificates
8. Telemedicine consultations
```

### Cost Structure
```
FIXED COSTS (monthly, regardless of patient volume):
- Rent
- Physician salary (if salaried, not commission)
- Nursing and admin salaries
- EMR / software subscriptions
- Utilities (DEWA/ADDC — estimate AED 2,000–6,000/month)
- Insurance (facility malpractice, property)
- Licensing fees (amortized monthly)

VARIABLE COSTS (scale with volume):
- Medical supplies and consumables
- Medications (if dispensing)
- Medical waste disposal
- Lab reagents (if in-house)
- Physician commission (if commission model)
- Credit card processing fees (1.5–2.5%)

SEMI-FIXED:
- Marketing
- Maintenance and equipment servicing
- Continuing education
```

---

## Break-Even Analysis

### Simple Break-Even Formula
```
Break-even consultations = Fixed Monthly Costs ÷ (Revenue per consultation − Variable cost per consultation)
```

### Example (Small Specialist Clinic — Abu Dhabi)
```
Fixed costs: AED 80,000/month
  Rent: 25,000
  Physician salary: 35,000
  Nurse + reception: 12,000
  Overheads: 8,000

Average revenue per consultation: AED 400
Variable cost per consultation: AED 50 (supplies, waste, card fees)
Contribution margin: AED 350

Break-even: 80,000 ÷ 350 = 229 consultations/month
= 11–12 patients/day (22 working days)

To generate AED 50,000/month profit:
(80,000 + 50,000) ÷ 350 = 371 consultations = ~17 patients/day
```

---

## Physician Compensation Models

| Model | Description | Best For |
|-------|-------------|----------|
| Pure salary | Fixed monthly; no volume incentive | New hires, predictable cost |
| Pure commission | % of collections (typically 30–50%) | Low-risk for clinic; variable for doctor |
| Base + commission | Fixed base + % above threshold | Balances security and incentive |
| Net revenue share | Physician keeps % after expenses | Senior partners, high performers |

**UAE norm:** Base + commission is most common for specialists.
**Commission range:** 35–50% of net collections (after insurance adjustments) for consultants.

---

## Key Financial Ratios

| Metric | Healthy Range |
|--------|--------------|
| Gross margin | 60–75% |
| Net profit margin | 15–30% |
| Staff costs as % of revenue | 40–55% |
| Rent as % of revenue | 10–15% |
| Supply costs as % of revenue | 5–12% |
| Collection rate (insurance) | > 92% |
| Revenue per physician per day | AED 3,000–8,000 |

---

## Monthly Financial Dashboard

Track these monthly:
```
Revenue:
□ Total gross billing
□ Insurance adjustments (write-offs)
□ Net collected revenue
□ Revenue by physician / by specialty
□ Cash vs insurance split

Costs:
□ Total payroll (with breakdown)
□ Rent + utilities
□ Supplies
□ Marketing spend

Profitability:
□ Gross profit
□ EBITDA
□ Net profit

AR Management:
□ Total outstanding AR
□ AR by age bucket (0–30 / 31–60 / 61–90 / 90+)
□ Claims submitted this month
□ Claims paid this month
□ Rejection rate
```

---

## Clinic Valuation (for sale / partnership)

UAE private clinics are typically valued at:
- **EBITDA multiple:** 3–6x annual EBITDA (higher for specialty, established patient base, long lease)
- **Revenue multiple:** 0.5–1.5x annual revenue
- **Key value drivers:** patient retention rate, insurance panel breadth, reputation, lease terms, staff stability, EMR data quality

---

## Output Format

For financial queries:
1. Identify the specific question (P&L, break-even, tax, valuation, etc.)
2. Build the relevant model or calculation with the user's numbers
3. Benchmark against UAE norms
4. Flag tax or regulatory implications
5. Provide actionable recommendations