Bottom line blues (MGMA annual meeting)

By Karen Caffarini

Months before the Medical Group Management Assn. annual conference, the MGMA asked its 2,800 members about their biggest challenges in running a group practice.

No. 1 on the list: maintaining physician reimbursement in an era of declining revenues. No. 2: dealing with operating costs rising faster than revenues. Thirty-two other areas — most linked to the top two — were called “considerable” or “extreme” challenges.

Total operating costs for practices have risen 43.1% since 2001, said William F. Jessee, MD, president and CEO of MGMA, while the Consumer Price Index has risen 24.2% and the Medicare conversion factor has flatlined at 0%. The factor converts the geographically adjusted number of relative value units for each service in the Medicare physician payment schedule into a dollar payment amount.

Physician income barely kept pace with inflation this year, especially in specialty practices, according to MGMA’s annual physician compensation and production survey. Dr. Jesse said this is prompting many doctors to sell their practices to hospitals. Those remaining are less likely to invest in the practice.

“The only way a practice can keep up is to increase volume,” Dr. Jessee said. “But if you’re running as fast as you can, you can’t run any faster.”

The MGMA conference had many sessions on tips and tricks to cut costs or add business. But the gloomy consensus was that physicians on their own could only do so much and the answers need to come from payers — private, commercial and, especially, Medicare.

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