The Medical Group Management Association's annual cost survey has been a mainstay of its member benefits for 50 years, offering detailed revenue and expense data on practices nationwide.
It's also a behemoth. Comprising 240 pages of tables with titles such as "Staffing, RBRVS RVUs, Patients, and Square Footage per FTE Physician for Selected Single-Specialty Practices," it's the type of document only devout number crunchers could love. Career administrators, consultants and analysts are its primary devotees.
"It's not user-friendly," acknowledges David Futz, a data system analyst in the survey department of the Englewood, Colo.-based MGMA.
But with many medical groups losing money, there's a growing need to make such data accessible to top decisionmakers-namely physicians and board members-as well as to identify best practices. The association also wants to encourage benchmarking against top-performing groups rather than MGMA norms.
With those goals in mind, the MGMA used data from the cost survey to identify better-performing groups and figure out what makes them tick.
The result is a 48-page report, Performances and Practices of Successful Medical Groups. It profiles groups that are in eight specialty areas and exhibit superiority in profitability and operating costs; production, capacity and staffing; and accounts receivable and collections (See box, p. 65).
Through interviews with practice managers and industry experts, the report also discusses the ingredients that drive success. According to the report, there's no magic formula but rather a blend of good practices.
For example, medical groups traditionally have placed more emphasis on generating revenues than controlling costs, according to the report. But better-performing groups do both.
The report identifies seven common tools:
* Detailed cost accounting. Cost accounting systems enable practices to determine the cost of and revenues generated by each procedure, allowing effective resource allocation.
* Transaction costing. Knowing the true cost of delivering a unit of care improves a group's negotiating position with third-party payers and avoids money-losing contracts.
* Zero-based budgeting. Better performers start each budget from scratch rather than applying a uniform inflation factor to last year's numbers.
* Physician incentives. Better performers compensate physicians for controlling costs. They commonly measure the types and number of support staff a physician uses as well as adherence to practice protocols. Top performers also use lower-cost supplies.
* Effective managed-care contracting. Better performers have sophisticated methods of negotiating and monitoring managed-care agreements, including contract review committees that develop checklists of parameters for each contract.
* Effective coding. On the whole, medical groups "undercode" an estimated 50% to 60% of the time, meaning they lose revenues they're entitled to, according to the report. To enhance accuracy, better performers emphasize coding training, develop explicit coding processes and undergo outside assessments of their coding.
* Improved service delivery. Better performers invest in computerized scheduling systems, maintain sufficient support staff and often allocate three or more exam rooms per primary-care physician. E-mail consultations and telephone triage are common.
So far, 2,500 copies of the report have been distributed to MGMA members that have premium benefit packages. Copies cost $225 for other MGMA members, $275 for MGMA affiliates and $350 for others. MGMA reports can be ordered by calling 888-608-5602.
MGMA Survey Operations Director David Gans says some of the "most interesting" feedback has been from hospital-based systems, which are struggling to turn around money-losing physician practices. One system called to request 33 copies, he says.
In future reports, the MGMA plans to quantify the relationship between operating practices and financial results as well as the role of physician-managers in practice performance.