Non-Physician Providers Can Boost Your Bottom Line

In hospital-owned primary care practices, that difference is $131,770 more in revenue after operating costs per physician.

Using more non-physician providers increases revenue and productivity, according to 2018 MGMA DataDive Cost and Revenue data.

In hospital-owned primary care practices, that difference is $131,770 more in revenue after operating costs per physician.

"Non-physician providers continue to be a source of increased revenue for systems," Kenneth Hertz, a principal at MGMA, tells HealthLeaders Media. "They provide invaluable patient education as well as a broad range of patient care services, very frequently focused in the office setting, enabling them to see a consistent volume of patients."

The MGMA findings are based on comparative survey data from more than 3,000 organizations across the country, including physician-owned and hospital-owned practices of a variety of sizes.

The data showed that primary care practices with a higher non-physician provider (NPP) to physician ratio (0.41 NPPs per physician or more) report greater expenses, but also report earning more in revenue after operating costs than practices with fewer NPPs (0.20 or fewer NPPs per physician).

This was true regardless of specialty.

For instance, the data showed that total medical revenue is 60.20% higher in hospital-owned practices with 0.41 or more NPPs per FTE physician than in primary care practices with 0.20 or few NPPs per FTE physician.

Hertz says the non-physician providers can help offset physician shortages and increase access to care, but they must be fully integrated into the strategic plan and to the overall mission.

"Key to the success of non-physician providers is the buy-in and support of the physicians in the system. The team can only be successful if all components are fully aligned," he says.

Hertz also notes that health system executives are often skeptical of the use of non-physician providers as revenue boosters.

"The deployment of non-physician providers within a system is often viewed as questionable in terms of revenue generation by system executives," he says. "The key to their effectiveness is through complete integration into the care team and clinical processes, in the physician office, emergency department, surgical suite, and on the hospital floor."

Additional data shows that most practices generally reported an increase in expenses since 2013. Also, over the past five years, median operating costs for primary care practices have risen by 13%, from $391,798 per physician to $441,559 per physician.  

General operating costs make up 32 cents of every dollar collected in physician-owned practices. Of that, IT represents 2 cents, drug supply 6 cents, and building occupancy another 6 cents.