According to a new MGMA Stat poll, more than half (53%) of medical practice leaders surveyed met or surpassed their revenue objectives in 2017.
The Jan. 31 MGMA Stat poll asked healthcare professionals how their organizations did in terms of their FY2017 net revenue goals. Nearly one-third (30%) of 988 applicable respondents stated that they exceeded their goals, while 23% said they met their goals. The number of individuals who exceeded their goals compares to a January 2017 MGMA Stat poll, when 30% surpassed their target budgets.
Respondents most often cited practice growth and new lines of business/ancillary income as reasons their practices exceeded goals.
That said, there were a sizable number of respondents (36%) who did not meet their FY2017 net revenue goals, down 6% from the 2017 poll when 30% responded that they fell short of their desired results.
Some of the reasons respondents did not meet their FY2017 net revenue goals included lower rates of reimbursement, falling revenue, increased expenses and loss of physicians.
One respondent noted, “Volumes were up but … Medicare reimbursement went down so all other payors went down as well.”
Astonishingly, 8% said they didn’t have a budget for FY2017 and 4% were unsure if they did. The primary reason given for those without a budget was “new practice.”
Additionally, some practices’ budget projections did not meet their goals. That’s why it’s important for practices to monitor, review and change the structure of their budgets as needed.
Putting together an annual budget is imperative for practices to monitor their performance. As noted in a Medical Economics article, “Experts say practices that don’t develop and regularly review a budget are missing out on a tool that can provide warning signs of financial trouble and fraud, and help to make large purchases less disruptive to cash flow.”
To ensure accuracy, it’s also important for practices to be flexible with their budgets. Expenses and revenue will likely fluctuate throughout the year, so staying nimble can help practices in the long run.
As David N. Gans, MSHA, FACMPE, senior fellow, MGMA Industry Affairs, noted in the September 2017 issue of MGMA Connection magazine, “More experienced managers realize that practice revenue and expenses are related directly to the volume of patients and will create a flexible budget from the start … with a flexible budget, a manager can evaluate expenses better when the level of patient services is different from the budget projections.”
By keeping these suggestions front of mind, practices can work toward meeting their net revenue goals in the future.
- “How to use a budget to boost practice performance” (Medical Economics)
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