Medical groups struggled with sharply reduced operating margins in 2004 -- for example, for internal medicine single-specialty practices an almost 6% decrease to $201,896, according to the Medical Group Management Association. The MGMA, which kicked off its annual conference Sunday in Nashville, blamed several factors, including a 5.7% increase in median total operating costs per physician and a 4.6% increase in average support-staff costs. The median operating margin for primary care-only multispecialty practices not owned by hospitals fell about 4% to $217,315. "Primary care practices are just trying to stay in business," said Deborah Milburn, administrator at eight-physician Dublin Primary Care, Colorado Springs, Colo. In general, multispecialty groups fared better, boosting their median operating margin 1.7%. The cost of professional liability coverage rose at a consistent level for all specialties, but obstetrician-gynecologists paid the most, about 6% of total medical revenue. Professional liability costs per full-time physicians have climbed between 13% and 19% since 2003, the MGMA said. -- by Michael Romano
Medical groups' margins drop amid cost pressures
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