Physician practices see increased operating losses, survey shows

In a survey conducted by American Medical Group Association Consulting (AMGA) found an average of $31,957 in operating losses accrued by  integrated health systems during 2016-2017. This is in stark contrast to private practices which reported a $16,378 operating margin per physician. Practice sizes also had an impact on operating losses with small, and mid-sized group reporting increased losses, while larger groups saw loss decline.

The president of AMGA Consulting, Fred Horton, said in a statement “The results of this survey suggest that groups must be diligent in managing their operational imperatives of their organizations,”. Horton notes that without “real focus” on operating cost and processes, the ability to grow revenue cannot outpace inflation.

This survey backs up what many hospitals are already experiencing. That both nonprofit and for-profit, are seeing revenue decline as new reimbursement models emphasize shorter stays and more care delivered in outpatient settings.

Along with losses in revenue, smaller physician groups also worry about the burden of MACRA reporting. both small and rural providers have said a lack of capital and resources to comply with reporting requirements. To address these concerns CMS raided the low volume threshold for MIPS participation from $30,000 in Medicare Part B charges or 100 Medicare patients to $90,000 or 200 patients. this move it s expected to exclude about 134,000 clinicians from MIPS, adding to 800,000 already exempted from the program.