Hospital-Owned Groups Showed Increase in Medical Revenue in 2009

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Multispecialty groups owned by hospitals and integrated delivery systems showed a 2.4 percent increase in total medical revenue after operating cost from 2008-2009, while the same measurement for independent groups fell by less than 1 percent, according to a release by MGMA.

The MGMA Cost Survey for Multispecialty Practices also showed hospital-owned groups' total medical revenue per FTE physician fell by 1 percent, compared with less than 1 percent for independent multispecialty groups.

The differences in operating costs between the two groups may be the result of different accounting practices, said Theresa Lewis, director of medical affairs and practice management at Catholic Health Initiatives. "Hospitals may not use the same level of accounting detail for their practices that an independent practice would use," she said.

Hospital-owned groups' stability of operating costs as a percentage of total medical revenue followed a 10 percent increase in that measurement the year before, the survey indicates. MGMA said this benchmark stood between 62-67 percent from 2000-2007 after falling from 72 percent in 1999.

The survey also found independent groups employed 5.3 support staff per FTE physician, compared with 3.3 for hospital-owned groups. The independent groups spent almost 33 percent of all costs on support staff, while the hospital-owned groups spent about 30 percent.

Ms. Lewis said the difference probably as to do with health systems' use of centralized processes whose costs may not be allocated to their practices. Therefore, she said, practice staffing at hospital-owned practices may be understated in the survey.

Read the MGMA release on medical groups.

Read more coverage on hospital-based medical groups:

- Hospital-Owned Groups Showed Slight Decrease in Work Units in Past 5 Years

- 3 Medical Specialties Most Pursued for Employment by Hospitals


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