Better-Performing Groups Use Benchmarking to Improve Practices

ENGLEWOOD, Colo. -- Benchmarking, patient care,

technology and staffing initiatives are among the factors that help

medical group practices become more financially and operationally

successful, a new Medical Group Management Association (MGMA) report

suggests.

"Benchmarking is key," said Diane Weber, CMPE, administrator for the

Quincy (Ill.) Medical Group. The practice has appeared in MGMA's

"Better Performers" survey report for five years in a row. "We have a

philosophy that everything we do must 'go on trial for its life on a

daily basis.' This means we are constantly rethinking the way we operate

to respond to our changing environment," Weber says.

The better-performing multi-specialty groups described in MGMA's

Performance and Practices of Successful Medical Groups: 2002 Report

Based on 2001 Data reported median revenues 20 percent higher per full

time equivalent (FTE) physician.

"We credit our culture as a presiding factor over much of our

advancement," says Weber. "Specifically, our physician involvement. Our

physicians now anticipate the release of much of the benchmarking data.

We have made it an integral part of beginning any financial

discussion."

The medical specialty groups deemed "better performers" in

profitability and cost management earned a median $591,646 in revenue

after operating costs per FTE physician in 2001 compared with $457,954

for all medicine groups. Revenue per FTE was $247,560 in the

better-performing primary-care-only groups, compared with $197,607 in

all primary-care-only groups. Similar differences in performance were

noted for orthopedic, obstetrics and gynecology and primary-care-only

multispecialty groups. While better performers are maintaining revenue

levels, they face continued increases in general operating costs for

support staff and liability insurance.

Operating cost per medical procedure performed in the better-performing

medical specialty groups climbed slightly from $37.53 to $38.49. In

contrast, the per-procedure cost jumped from $50.18 to $59.60 for all

other medical groups.

Total operating cost as a percentage of total medical revenue climbed

in most groups, reaching 56.66 percent in the better-performing

multispecialty groups and 54.71 percent in the better-performing

primary-care-only groups.

"Despite our success in specific categories, we face, as all medical

group practices do, a bleak future of continued declining

reimbursements, increasing medical malpractice premiums and increasing

costs," said Weber. "Our continued financial viability rests on our

government's ability to make positive steps toward reform."

The report pulled data from 1,400 respondents to MGMA's 2002 Cost

Survey and a supplemental questionnaire to determine which respondents

were better performers.

The report also provides an in-depth look at medical groups that

recorded above-median performance in key measures of productivity,

profitability, accounts receivable and collections, managed care

operations, and patient satisfaction.

Essays in the report describe the operations of successful group

practices and provide close-ups of 28 better-performing practices.

Source: MGMA

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