Better performing medical practices spend almost 9% more on their operations than their peers according to a new report released by the Medical Group Management Association (MGMA). These same practices enjoyed higher revenues and physician compensation compared to the average.
Based on 2019 data (pre-COVID), the “2020 Performance and Practices of Successful Medical Groups” report provides an in depth look at how medical practices are performing in four key categories:
The report is based on survey responses and other data provided by MGMA members.
Operational investments pay off
According to the report, better performing practices spent, on average, $884,979 per full-time-equivalent (FTE) physician while their peers only spent $814,342. Yet despite having higher operational costs, these same practices generated almost 18% more revenue and had physician compensation that was 19% more than the average.
Source: MGMA’s 2020 DataDive Better Performers – Performance and Practices of Successful Medical Groups
These findings demonstrate that investing smartly in people, technology, and improved processes pays off (literally!).
“What better performers have shown us time and time again is that they are willing to devote resources to serving their communities,” stated Andy Swanson, Vice President of Industry Insights at MGMA in an interview with Healthcare IT Today. “They are putting more cost into their organization and ultimately seeing a profitable return on that investment.”
Positive impact for patients
Being a better performer clearly pays off for the practice and according to Swanson, there is a positive impact on patient care as well.
By investing in their operations, practices can provide more access for patients. Those with an acute need are now able to get care the same day and 73% of all patients can receive care within 3 days. It was not that long ago when the average was closer to 2 weeks before most patients could get access to care.
Graves Gilbert Clinic, a 200 provider group located in Bowling Green KY, was one of only 54 Best Performers identified by MGMA as part of the report (<1% of all participants). To receive this designation, they outperformed their peers in all four categories: operations, profitability, productivity, and value. Graves Gilbert Clinic’s CFO, Steven Sinclair, echoed Swanson’s comments about the impact on patients.
“We feel that our patients have a great relationship with our doctors,” shared Sinclair. “When the doctor is in the office, all they have to think about is patient care.”
This is possible because Graves Gilbert Clinic has made significant investments in reducing the administrative burden on their doctors. They have hired staff, adopted technologies, and partnered with 3rd parties to streamline as much of their operations as possible. This allows patient-facing staff to focus more on the people they are seeing vs worrying about the mountain of paperwork waiting for them at the end of the day.
“They don’t have to worry about the business aspects,” continued Sinclair. “We try to insulate them from that as much as possible. This carries over to patients because their doctors are not distracted.”
Revenue cycle improvements across the board
One of the surprising results in the MGMA report is how consistent practices are with their accounts receivable (AR). There is less than 1% difference between Better Performers and their peers for AR 31-120 days outstanding. In fact, Better Performers slightly underperformed vs their peers in this AR timespan.
There used to be much more variation between Better Performers and the average according to Swanson: “You would have groups who were not Better Performers having lots of outstanding accounts receivable dollars 60, 90 and even 120+ days out. There has been so much effort put into revenue cycle management over the past 3 to 5 years and we are seeing the results now. By being efficient here, practices are able to steer more time back to patients.”
“One of my beliefs is that when patients comes to Graves Gilbert Clinic they are not only counting on receiving great care, they have also entrusted us with caring for their medical billing, coding and how their account is handled,” said Sinclair. “If we do that well, then there are very few situations where they have to get personally involved. We don’t want to cause our patients any undue stress. So our goal is to have a minimum number of accounts that have issues.”
In a way, Sinclair and his non-clinical team at Graves Gilbert Clinic are mimicking the great care their doctors are providing to patients by providing such great service.
Higher revenues, more take-home compensation, and a great patient experience – MGMA’s Best Performers are a shining example of how making investing in the business side of the practice can yield outsized dividends.
Download your free copy of the MGMA Report here.
Watch the full interviews with Andy Swanson and Steven Sinclair below.