Data Mine: Reaping what you sow — Keys to MGMA Better Performer productivity

Insight Article - December 15, 2020

Benchmarking & Forecasting

RVUs

Data Analytics & Reporting

David N. Gans MSHA, FACMPE, SENIOR FELLOW
Most practice leaders may not think that managing a busy medical group has analogies to agriculture, but practice managers working in rural environments will immediately recognize the similarities.

Driving by a farm and observing how the land is used and the appearance of the crops tells a lot, just as walking in the front door of a practice gives a first impression of the organization. It’s easy to observe if the crops are healthy, if weeds are under control and if the crops make the best use of the land. Likewise, standing in a practice entry gives immediate insight as to whether the practice is patient focused, staff are organized, providers are on time or behind schedule and, most importantly, if the organization properly stresses sanitation and social distancing standards.

Just as two adjacent farms can have very different economic performance, depending on the knowledge and skill of the farmers, practices in the same area will succeed or fail depending on the knowledge of their managers and work ethic of their providers.

To document how some practices succeed where others falter, 20 years ago MGMA recognized that some medical groups have superior performance even in environments where other practices struggle and published information on these “Better Performers” in the association’s survey reports.

MGMA DataDive Cost and Revenue and Provider Compensation report how practices meeting Better Performer criteria exhibit superior financial performance compared to their peers. In the October 2020 MGMA Connection magazine, I examined how the processes described in reports 20 years ago are still valid management techniques.1 The recent MGMA DataDive Better Performers data report, Performance and Practices of Successful Medical Groups, provides similar insights as to how these practices attain their success.2



Figure 1 examines the Better Performer data for physician-owned multispecialty groups reported in the 2020 MGMA DataDive Cost and Revenue, showing how Better Performer practices stand out compared to other practices. They invest more in their staff and facilities, spending 2% more on support staff compensation and benefits and 13% more in general operating costs. The return on these investments is reflected in having 18% greater median total medical revenue and, most importantly, 19% greater physician compensation and benefits than all multispecialty group data in the report.



Table 1 provides insight into how these Better Performers get their results. These practices have 9% more full-time-equivalent (FTE) support staff per FTE physician and 6% more square footage per FTE physician than their peers. Looking into the MGMA DataDive report shows that the Better Performers increased staffing in the areas that directly relate to improved collections and increased provider productivity, with 20% more business office support staff and 18% more clinical support (nursing) staff.3

Table 1 also reports that these practices have 24% greater work RVU (wRVU) production, which translates directly to increased practice revenue and eventually to increased physician compensation.



Table 2 provides a completely different view of Better Performers, using data from MGMA DataDive Provider Compensation to look at three physician specialties: family medicine without obstetrics and gynecology (OB/GYN), noninvasive cardiology and general surgery. Rather than reporting practice data, the table contains information on the physicians who work there. It also focuses on the doctors from the practices who were recognized as a Better Performer in productivity.

The physicians in these practices report far greater productivity than other physicians in their specialty. For family medicine without OB/GYN, the physicians in Better Performer practices have 35% greater wRVU production that translates to 28% higher compensation. Similar results are reported for noninvasive cardiology (those physicians reported 45% more wRVUs and 29% greater compensation) and general surgery (with 46% more wRVUs and 35% greater compensation), showing how actions at the practice level translate directly to improved physician performance and increased physician compensation.

Just as successful medical practice leaders use technology to minimize costs while increasing production, successful farmers take advantage of advances in science and biotechnology to increase the yield from each acre with fewer inputs, less labor and a greatly reduced environmental footprint.

Perhaps the best description of how agriculture and practice management are similar comes not from a management text, but the Bible. As 2 Corinthians 9:6 reads, “whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully.” Practices that maximize production also maximize the output of the practice, reaping what they sow.

Notes:

  1. Gans D. “Good management is timeless: What was old is still new.” MGMA Connection, October 2020. Available from: mgma.com/datamine-oct20.
  2. MGMA. Performance and Practices of Successful Medical Groups. MGMA DataDive Better Performers data report. September 2020. Available from: mgma.com/data-bp20.
  3. Ibid.
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About the Author

David N. Gans
David N. Gans MSHA, FACMPE, SENIOR FELLOW
Industry Affairs MGMA

David N. Gans, FACMPE, can be reached at dgans@mgma.com. 

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