Blog | Thursday, September 22, 2011

QD: News Every Day--Belt-tightening continues for medical practices

Medical practices cut general operating expenditures 2.2% in 2010, while general operating costs rose by 52% since 2001, exceeding revenue gains during that time.

According to the Medical Group Management Association's (MGMA) Cost Survey for Multispecialty Practices: 2011 Report Based on 2010 Data, total medical revenue in multispecialty practices not owned by hospitals or integrated delivery systems increased nearly 46% since 2001 and 8.5% since 2009, likely as a result of trimming operating expenses, MGMA stated in a press release. Spending on furniture and equipment expenses decreased 23% since 2010, and drug supply costs decreased 8.5 %. Expenditures rose since last year for total support staff (4.8%) and medical and surgical supplies (7.4%).

Chart courtesy of MGMAResults show that medical practices are not spending as much money as they were last year, which isn't necessarily a good thing, commented MGMA president and CEO William F. Jessee, MD. Practices are steeling themselves against proposed Medicare payment cuts by reducing operating expenses, and renegotiating rates with vendors, supply companies and insurance carriers. "There is only so much more practices can do to cut expenditures without inhibiting their ability to run a successful, innovative practice," he said.

The survey includes data from more than 44,000 providers and 2,000 groups.