Finances, EHR remain top challenges for medical practices in 2009

As recession continues, collecting from patients becomes a bigger challenge

ENGLEWOOD, Colo., August 11, 2009 – For the second year in a row, medical practice professionals sounded off to the Medical Group Management Association (MGMA) about handling a variety of challenges while safeguarding their practices' financial solvency.

According to the MGMA 2009 "Medical practice today: What members have to say" research, the top three challenges of running a group practice remain the same as in 2008.

• Dealing with operating costs that are rising more rapidly than revenues
• Maintaining physician compensation levels in an environment of declining reimbursement
• Selecting and implementing a new electronic health record

But below those three, the rankings changed somewhat from last year. This year, respondents listed collecting from self-pay patients and those with high-deductible health plans and health savings accounts as the fourth-highest challenge. In 2008, the fourth- ranked challenge was recruiting physicians, which ranked sixth this year. Managing finances in the face of uncertain Medicare reimbursement rates rounded out the top five for the second year in a row.

"Medical practice managers have one of the most difficult jobs in healthcare," said William F. Jessee, M.D., FACMPE, MGMA  president and CEO. "Running a successful business that provides medical care is an incredibly difficult task in these economically challenging times. But the professionalism that MGMA members bring to their work enables them to persevere."

(See the full list of issues MGMA asked respondents to rate and listen to lead MGMA researcher James Margolis' podcast.)

MGMA also asked study participants how the recession is affecting their medical groups and how they are responding. Ranked by average score, the participants indicated the most probable effects of the recession on their practices are:

• An increase in uninsured patients;
• Improved billing and collections and/or denial management process;
• Decreased revenues;
• Postponed capital expenditures;
• Operating budget cuts; and
• Staff hiring freezes.

Many respondents said they were experiencing the effects of the recession on their practices:

• 36.6 percent said they have postponed capital expenditures;
• 34.7 percent are seeing a rise in uninsured patients;
• 34.5 percent have implemented a staff hiring freeze;
• 33.9 percent have cut operating budgets;
• 33.3 percent have improved billing and collections processes; and
• 33.1 percent have witnessed a decrease in revenue.

"At their core, medical practices are small to medium-sized businesses, and the recession has affected them in many of the same ways as other businesses," continued Jessee. On the positive side nearly 82 percent of respondents said there was a zero probability that their group would file for bankruptcy protection. Nearly 80 percent said there was a zero probability their practice would close because of the poor economy.

From February 2-26, MGMA invited members via e-mail to participate in a Web-based questionnaire about their practices and the career challenges they face today. MGMA received responses from 2,077 people, a response rate of 13.4 percent. The research is featured in the July 2009 MGMA Connexion magazine.

About MGMA

MGMA is the premier membership association for professional administrators and leaders of medical group practices. Since 1926, MGMA has delivered networking, professional education and resources, and political advocacy for medical practice management. Today, MGMA's 22,500 members lead 13,700 organizations nationwide in which some 275,000 physicians provide more than 40 percent of the health care services delivered in the United States.

MGMA's mission is to continually improve the performance of medical group practice professionals and the organizations they represent. MGMA promotes the group practice model as the optimal framework for health care delivery, assisting group practices in providing efficient, safe, patient-focused and affordable care. MGMA is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C.