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Medical Practice Costs Creep Higher

Jacqueline Fellows, for HealthLeaders Media, December 13, 2012

A year-to-year comparison of cost increases at both physician- and hospital-owned medical practices shows senior executives and administrators are increasingly being called on to build efficiencies.

MGMA-ACMPE (formerly the Management Group Medical Association) released on Wednesday its annual report on cost data gathered from member and non-member practices. Published since the mid-1950's, the Cost Survey for Multispecialty Practices: 2012 Report Based on 2011 Details, is a 300+ page benchmark report used by practices to measure how their spending and cost increases compare to their peers.

Overall, says Todd Evenson, director of data solutions for MGMA-ACMPE, there's been a "64% increase in total operating costs for multi-specialty practices" since 2001. In comparison, 2011 shows a modest 1.27% increase from 2010 for physician-owned practices.

In real dollars, that amounts to $528,182 in operating costs per full-time employee physician. Hospital/Integrated Delivery System (IDS)-owned organizations saw a 6.45% increase in operating costs, or $387,586. Evenson cautions against comparing the operating costs of the two models because they operate so differently.

Instead, Evenson says it's more significant to look at the single-digit increases in growth of each, saying the 2011 figures show "medical groups are laboring to bend the cost-growth curve."

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