Dive Brief:
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Medical practices that use non-physician providers (NPPs) receive more revenue and enjoy better productivity, according to the new Medical Group Management Association DataDive Cost and Revenue report.
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Primary care practices with more NPPs have higher expenses, but MGMA also found those practices earn more revenue after operating costs than practices with fewer NPPs.
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Physician-owned practices with 0.41 or more NPPs said they earn $100,788 more revenue after operating expenses per physician than practices with 0.20 or fewer NPPs. Hospital-owned primary care practices saw an even bigger difference ($131,770).
Dive Insight:
Finding ways to fill care gaps and improve practice efficiencies are getting even more critical for physicians. Practices surveyed said they’ve seen higher expenses since 2013, which is a similar result to the July 2018 MGMA Stat poll that showed 69% saw overhead increases over the past year.
The latest survey found that median operating costs for primary care practices rose 13% from $391,798 per physician to $441,559 over the past five years. The report of more than 3,000 organizations found 32% of expenses go to general operating costs in physician-owned practices. Those expenses include 2% for IT, 6% for drug supply and 6% for building occupancy.
One way to offset costs and improve efficiency and patient access is hiring NPPs. Halee Fischer-Wright, president and CEO of MGMA, said medical practices are increasingly turning to NPPs, especially in light of potential physician shortages. Fischer-Wright said the survey results show practices can increase revenue by using NPPs, which also allows physicians to focus on the most acute cases.
Ken Hertz, principal consultant at MGMA, called the move to NPPs a “win-win for both patients and practices — patients’ health outcomes improve while practice revenue increases.”
The findings will please advocates who support using nurses and physician assistants to help ease physician shortages. A recent Association of American Medical Colleges report predicted a shortfall of more than 120,000 doctors by 2030. That number grew from a similar study last year, which suggested a 105,000 shortage.
Primary care’s gap will be between 14,800 and 49,000, depending on the supply of advanced practice nurses and physician assistants, according to the report.
Practices using NPPs means more responsibility for nurses and physician assistants. However, it will also likely mean more compensation for those professionals.
Nurses and PAs have already seen a pay bump in recent years. Another recent MGMA study found nurse practitioners have seen a nearly 30% compensation increase and primary care assistants received a 25% increase over the past decade.
Both of those positions saw the largest median increases in the survey. Overall compensation for nurse practitioners, physician assistants and other non-physician providers grew 8% in the past five years and now averages $65,000 a year.