MGMA: Docs Trim Practice Expenses, But Operating Costs Soar

John Commins, September 22, 2011

Medical practices cut operating expenses 2.2% in 2010, a survey from the Medical Group Management Association shows.

The report -- Cost Survey for Multispecialty Practices: 2011 Report Based on 2010 Data -- also found that since 2001 general operating costs have increased nearly 53% to $252,629, exceeding revenue gains in the decade. 

Total medical revenue in multispecialty practices not owned by hospitals or integrated delivery systems grew nearly 46% since 2001 and 8.5% since 2009, likely as a result of monitoring expenses closer than ever.

Spending on furniture and equipment fell more than 23% since 2010, and drug supply costs fell 8.5%. Medical practices reported rising expenditures for total support staff increased 4.8%, and medical/surgical supplies increased 7.4% for the period. 

"The tenor of these findings speaks to an environment of conservatism," William F. Jessee, MD, MGMA president/CEO, said in a media release.

"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," Jessee said. "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 physician groups.  

John Commins

John Commins is a senior editor at HealthLeaders Media.

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