A Medical Centre in Numbers: From Patient Visits to Return on Capital

An illustrative calculation for a six-room medical centre showing how patient throughput drives the result and how quickly a fixed clinical payroll turns profit into loss.

Healthcare projects are usually presented as demand stories, and they are decided by throughput against a fixed clinical payroll. This worked example takes a small medical centre from patient visits per day to earnings, then shows what happens when the visit count falls by a quarter. Every figure is an illustrative assumption used to demonstrate the arithmetic rather than to state a market rate.

The situation

An overseas investor is funding a six-room medical centre on land they already own in a Saudi city, operated by a licensed local clinical partner. They want to understand the capital required, the throughput needed to justify it, and how sensitive the outcome is to patient numbers.

Assumptions (illustrative)

• A building of 900 square metres over two floors, with six consulting and treatment rooms plus support space.
• Shell and core assumed at SAR 2,600 per square metre; medical fit-out at SAR 2,200 per square metre; specialist services, shielding and medical gas provision at SAR 420,000.
• Medical equipment assumed at SAR 1,600,000; design and supervision at 8 per cent of construction; contingency at 8 per cent of construction.
• Licensing, validation and pre-opening costs assumed at SAR 250,000.
• Six rooms operating 300 days a year at 8 patient visits per room per day, with average net revenue per visit of SAR 260.
• Ancillary revenue from imaging and minor procedures assumed at 15 per cent of consultation revenue.

Step 1: Assemble the capital cost

Shell and core is 900 multiplied by SAR 2,600, which is SAR 2,340,000. Medical fit-out is 900 multiplied by SAR 2,200, which is SAR 1,980,000. Specialist services add SAR 420,000, giving construction of SAR 4,740,000. Design and supervision at 8 per cent adds SAR 379,200 and contingency at 8 per cent adds SAR 379,200. Equipment adds SAR 1,600,000 and pre-opening adds SAR 250,000. Total capital excluding land is SAR 7,348,400.

The fit-out and equipment together are SAR 3,580,000, roughly half the total. In healthcare the shell is the cheap part, which is why comparing a clinic with an office on a cost per square metre basis is meaningless.

Step 2: Calculate consultation revenue from throughput

Six rooms multiplied by 8 visits multiplied by 300 operating days gives 14,400 visits. At SAR 260 of average net revenue per visit, consultation revenue is SAR 3,744,000.

Eight visits per room per day is a busy clinic, requiring both patient demand and a booking system that fills gaps. Empty slots are the equivalent of vacant rooms in a rental building, except that the payroll continues.

Step 3: Add ancillary revenue

Ancillary revenue at 15 per cent of consultation revenue is SAR 561,600. Total revenue is SAR 3,744,000 plus SAR 561,600, which is SAR 4,305,600.

Ancillary services justify part of the equipment spend. They also depend on the same patient flow, so they amplify the effect of throughput rather than diversifying away from it.

Step 4: Apply the operating costs

Assume clinical salaries of SAR 1,850,000, administrative salaries of SAR 420,000, consumables at 12 per cent of revenue which is SAR 516,672, utilities of SAR 210,000, insurance and licences of SAR 130,000, marketing of SAR 150,000, maintenance and equipment servicing of SAR 180,000 and systems and claims processing of SAR 95,000. Total operating cost is SAR 3,551,672.

Clinical salaries alone are 43 per cent of revenue at this throughput, and they cannot be reduced without reducing capacity. That is the defining feature of the model.

Step 5: Reach earnings and the return

Earnings before interest, tax, depreciation and amortisation are SAR 4,305,600 less SAR 3,551,672, which is SAR 753,928. Against capital excluding land of SAR 7,348,400, that is 10.3 per cent.

A reasonable result that depends entirely on filling 14,400 appointment slots a year. The building contributes nothing to that; the clinical reputation and the referral flow do.

Step 6: Test the model at lower throughput

At 6 visits per room per day, visits fall to 10,800 and consultation revenue to SAR 2,808,000, with ancillary revenue of SAR 421,200 and total revenue of SAR 3,229,200. Consumables fall to SAR 387,504 while the other costs stay at SAR 3,035,000, giving total costs of SAR 3,422,504 and a loss of SAR 193,304.

A 25 per cent fall in patient visits turns a 10.3 per cent return into a loss. Nothing in the building changed; only the appointment book did.

What changes the answer

• Average net revenue per visit at SAR 230 rather than SAR 260: total revenue falls by about SAR 497,000 and earnings by roughly SAR 437,000 after lower consumables.
• Clinical salaries 10 per cent higher: SAR 185,000 comes straight out of earnings, since the payroll is fixed against capacity.
• Operating 330 days rather than 300, with the same daily throughput: revenue rises by about SAR 430,600 and earnings by roughly SAR 379,000.
• Equipment financed rather than purchased outright: capital falls but a fixed monthly cost joins the payroll block, which worsens the position at low throughput.

What the numbers tell you

• Healthcare is a throughput business with a fixed clinical payroll, so model the appointment book before the building.
• Fit-out and equipment are about half the capital, which makes cost per square metre comparisons with other uses useless.
• A quarter less throughput can turn a healthy return into a loss, so test that case before committing.
• Ancillary revenue depends on the same patient flow and amplifies rather than diversifies the risk.
• The clinical partner and the referral flow drive the result; the property investor is funding capacity, not demand.

Limits of this example

Every figure above is an illustrative assumption used to show the method, not a quote, valuation or market rate. Costs, rates, fees and regulations change and must be confirmed with the relevant authority, lender or supplier before you commit.

Domira designs, builds and manages projects across Saudi Arabia for owners who are based abroad: land appraisal, feasibility, design, construction, handover and asset management under one accountable contract. Send us the plot or the brief and Domira will put the numbers in front of you before you commit.