Medical practices cut general operating expenditures 2.2% in 2010, according to the Medical Group Management Association’s (MGMA) Cost Survey for Multispecialty Practices: 2011 Report Based on 2010 Data. However, since 2001, general operating costs have increased by 52.64 percent to $252,629, exceeding revenue gains during that timeframe.
Total medical revenue in multispecialty practices not owned by hospitals or integrated delivery systems (IDSs) increased 45.87 percent since 2001 and 8.5 percent since 2009, likely as a result of monitoring operating expenses closer than ever. Spending on furniture and equipment expenses decreased 23.37 percent since 2010, and drug supply costs decreased 8.52 percent. Medical practices reported rising expenditures for total support staff (increased 4.78 percent since 2010) and medical and surgical supplies (increased 7.43 percent since 2010).
“The tenor of these findings speaks to an environment of conservatism,” said William F. Jessee, MD, FACMPE, MGMA president and CEO. “In an effort to reinforce themselves against a draconian proposed cut to Medicare payments, as well as other factors, they have worked to reduce operating expenses, and renegotiate rates with vendors, supply companies and insurance carriers. This means medical practices are not spending as much money as they were last year, which isn’t necessarily a good thing. There is only so much more practices can do to cut expenditures without inhibiting their ability to run a successful, innovative practice.”
MGMA’s Cost Survey includes data from more than 44,000 providers and 1,994 groups. The report includes practice data by full-time-equivalent (FTE) physician, provider, total or work RVUs, patients and square footage, as well as complete data on staffing ratios and costs. The survey also includes an IDS section that highlights staffing, cost and productivity data points for IDS-owned multispecialty practices.