Regulatory Burden Forces More Staff

MGMA: Regulatory Burden = More Staff

Increasing administrative work also increases costs.  We all know that.  Recently the Medical Group Management Association (MGMA) put the numbers to that fact.  The average cost?  $52,000 per FTE physician.

Debra Beaulieu-Volk summarizes these findings in her recent article.  She reports that as regulatory and administrative burdens on medical groups increases, so also does the expense of paying employees to perform that work.

Debra writes:

Respondents of Medical Group Management Association’s (MGMA) Cost Survey: 2014 Report Based on 2013 Data, reported a 4.6 percent increase in spending on total business operations staff–including general administrative staff, information technology staff, general/patient accounting staff and managed care administrative staff—per full-time-equivalent (FTE) physician since last year.

This translated to a median cost of $52,009 per FTE physician to support total business operations staff among multispecialty practices, according to the report. This finding suggests that practices respond to today’s challenges by placing a high priority on hiring employees with expertise in managing and reporting metrics for disparate government quality programs, negotiating payer contracts, and understanding new plans offered on the insurance exchanges. But it also places undue hardship on medical offices because they are forced to allocate more resources to government regulations and processes, noted MGMA analysts in an announcement.

Other key finding from the MGMA reports also inlcude:

  • Physician-owned practices used more total support staff than hospital/IDS-owned practices, regardless of practice type.
  • Primary care and surgical single-specialty practices in the Midwest earned almost four times more than their counterparts in Southern regions. Surgical single-specialty practices earned more in each of the geographic sections than primary care and nonsurgical single-specialty practices.
  • Patient-centered medical home (PCMH) practices spent $42.56 more per patient in total general operating costs than non-PCMH practices, but earned $65.54 more per patient in total medical revenue after operating cost.

The AAFP called 2014 the perfect storm for administrative burdens and regulatory compliance and the numbers are bearing that out.

– James