Operating Costs Jump for Physician-Owned Practices

New research from the Medical Group Management Association shows technological improvements are driving up practices' operating costs.

Operating costs for physician-owned multispecialty practices have jumped 12% since 2010 on a per-physician basis, according to a new survey.

The research comes from the Medical Group Management Association’s 2015 Cost and Revenue Survey, which also found physicians are relying more and more on non-physician providers.

Most of the increased costs have to do with the greater incorporation of technology into medical practices. Survey respondents spent an average of $20,693 per full-time physician on technology-associated operating costs in 2014, an 11.87% increase over the previous year. Over the past five years, technology spending has increased by 33.92%.

“As technology continues to evolve, medical practices must likewise evolve,” said Halee Fischer-Wright, the association’s chief executive. “The way patients ask for and receive care is changing. The increased use of technology can improve the quality of patient care by improving records management, optimizing workflow, and meeting HIPAA compliancy requirements.”

Surgical single-specialty practices have seen the largest jump in the use of non-physician providers (NPPs), with practices now employing 0.85 NPPs per full-time physician, up from 0.59 NPPs per physician in 2010. That increased is believed to be related to the ongoing physician shortage and the increase in patients thanks to the Affordable Care Act.

Michael Brohawn, the practice administrator at Orthopaedics East and Sports Medicine Center in Greenville, NC, said NPPs have helped his practice improve its efficiency by freeing up physicians to focus on the most acute needs.

“NPPs also improve patient satisfaction by creating greater access and appointment availability, and they reduce the direct and overhead costs of the practice,” Brohawn said, in an MGMA press release.

The survey includes data from 3,120 medical groups. The full report is available on the MGMA’s website.