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Survey: More NPPs Mean More Profit

News  |  By Debra Shute  
   August 01, 2017

"Contrary to what some may believe, with increased staffing come much larger gains in revenue after operating cost, as well as productivity," says MGMA CEO.

As the saying goes, businesses often have to spend money to make money—at least when it comes to investing in nonphysician practitioners (NPPs) and key support staff, according to a recent survey from the Medical Group Management Association (MGMA).

Overall, practice operating expenses increased at almost the same rate as revenue between 2015 and 2016, according to the 2017 MGMA DataDive Cost and Revenue Survey. However, practices that came out with increased revenues owed it largely to increased NPPS and support staff.

According to the analysis, the practices with a higher NPP-to-physician ratio (0.41 or more NPPs per full-time equivalent [FTE] physician) earn more in revenue after operating cost than practices with fewer NPPs (0.20 or fewer NPPs per FTE physician), regardless of specialty. 

"Our annual Cost Survey continues to show the importance of NPPs and support staff in physician practices and hospitals, as well as other factors that impact practices’ bottom line" said Halee Fischer-Wright, MD, MMM, FAAP, CMPE, president and chief executive officer at MGMA.

"Contrary to what some may believe, with increased staffing come much larger gains in revenue after operating cost, as well as productivity," she added.

Related: Large Gender Gap Seen in Physician Compensation                                             

Across all specialties, the analysis revealed a difference of one to three more support staff per FTE physician in physician-owned practices compared to hospital-owned.

Hospital-owned practices have more opportunity to consolidate business office functions and centralize services for multiple practices, therefore requiring fewer overall support staff on-site than physician-owned practices, noted the researchers.

Nonetheless, certain expenses continued to rise for all groups. From 2015 to 2016, drug supply expenses increased by more than 10% per FTE physician.

Meanwhile, physician-owned practices spent anywhere between nearly $2,000 to $4,000 more per FTE physician on IT operating expenses than they did the prior year, resulting in an expense of approximately $14,000-19,000 in IT operating expenses per physician each year, depending on the specialty.

Debra Shute is the Senior Physicians Editor for HealthLeaders Media.


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