MGMA survey: Physician compensation and revenue affected by practice ownership

New Orleans, La. Oct. 25, 2010— Practice losses in hospital-/IDS-owned groups often arise from accounting systems that reallocate income and cost. As a result, hospital-owned groups tend to have lower revenue figures than their not-hospital-owned counterparts, according to the Medical Group Management Association’s (MGMA's) new Cost Survey for Integrated Delivery System Practices: 2010 Report Based on 2009 Data. According to the report, the median total medical revenue for a multispecialty hospital-owned practice was $448,597 per full-time-equivalent (FTE) physician, $350,011 lower than in not-hospital-owned groups ($798,608).

The report revealed that specialty-care physicians working in multispecialty hospital-/IDS-owned practices earned 19.85 percent less in total compensation than those in multispecialty not-hospital-/IDS-owned practices. Specialists in hospital-/IDS-owned practices earned a median total compensation of $294,984, and those in not-hospital-/IDS-owned practices earned $353,549.

Primary care physicians working in multispecialty hospital-/IDS-owned practices reported median total compensation of $192,116, over $12,000 more than primary care physicians working in multispecialty not-hospital-/IDS-owned practices (who earned $179,688 in median total compensation).

"The need for primary care coverage and referrals in a hospital-/IDS-owned system may contribute to the overall difference in compensation," said Jeffrey B. Milburn, MBA, CMPE, MGMA Health Care Consulting Group. "Data like this will serve as a helpful tool for IDS practice managers striving to benchmark their financial performance."

MGMA’s Cost Survey for Integrated Delivery System Practices: 2010 Report Based on 2009 Data contains complete data on 1,002 IDS practices. The report provides details on operating costs, revenue, staffing and physician compensation, marking the first time that this information has been in a single report. It also includes information about system contributions to individual organizations and general operating cost, overhead applied to the practice, and system characteristics.

Note: MGMA surveys depend on voluntary participation and may not be representative of the industry. Readers are urged to review the entire survey report when making conclusions regarding trends or other observations.

Editorial copies of the report are available to members of the media who qualify. Please contact media relations representatives Liz Boten at lboten@mgma.com to request an editorial copy. Click here to purchase a copy of the report.

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 21,500 members lead 13,700 organizations nationwide in which some 275,000 physicians provide more than 40 percent of the healthcare 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 healthcare 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.

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