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Group practices work to mitigate increases in operating costs

Physician Practice Advisor, October 12, 2004

Medical group practices are attempting to use cost containment measures to offset increases in their operating costs, as reported in the Medical Group Management Association (MGMA) Cost Survey: 2004 Report Based on 2003 Data. The report indicates that while overall costs continue to rise, especially in primary care, practices have cut back in key operating areas, including support staff.

Pediatric practices reported a reduction in total operating cost of 2.39%, which helped offset a decline in total medical revenue of 4.29%. Family medicine practices reported similar outcomes. These groups also likely focused on staffing as a key area to help steady costs, reporting slight decreases in total full-time equivalent support staff and flat cost levels.

"What the MGMA survey does not show is whether the groups are doing without important resources, or whether they actually increased efficiency," said Daniel P. Stech, MBA, CMPE, director, MGMA Survey Operations, in an October 4 press release. Total medical revenue after operating cost for family medicine group practices was only 2.21% greater than in 2002.

Go to www.mgma.com for more information.

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