Two recurring topics in healthcare -- payment levels and patient safety -- topped a crowded agenda last week at the Medical Group Management Association's four-day annual summit in Las Vegas. Somehow, a record crowd of 6,200 managed to work through the grim news of an expected 5.1% cut in Medicare reimbursements for 2007, combining dry workshops on information technology ("Strategic planning: tactics for ensuring successful implementation") with sessions at the craps table and roulette wheel.
At the meeting, the MGMA reported that margins for family practice medical groups fell 3.5% in 2005 as physicians struggled with steep increases in operating costs and continued drops in reimbursements. The single-specialty groups, hit with a 6.3% hike in operating costs, posted average margins of $206,812 per full-time-equivalent physician, down about 3.5% from the previous year. Of the specialties surveyed, orthopedic surgery groups earned the most per full-time-equivalent physician, reporting an average margin -- or total medical revenue minus operating costs -- of about $622,000, an 11% increase over 2004.
Despite that boost in margins for some groups, the overall picture was far from pretty, said William Jessee, the MGMA's president and chief executive officer. "These practices can keep patching holes in the dam only so long until they become overwhelmed."
During his annual address, Jessee underscored more bad news: the prospect of an impending 5.1% annual cut in Medicare reimbursement that's expected to take effect in January. Some specialists, he pointed out, will be forced to absorb cuts as high as 16%. "How, and if, this issue will ultimately be resolved is very much up in the air."
Still, the MGMA itself enjoyed a good year financially, Jessee said. The association, which has about 20,000 individual members who represent more than 12,000 organizations, posted higher-than-expected income and revenue in fiscal 2006, earning net income of about $2.6 million on gross revenue of roughly $25.7 million. That was up from about $24 million in gross revenue and about $2.3 million in net income for fiscal 2005, according to Jessee. Membership increased by 5%.
The MGMA also announced two new initiatives. At a news briefing, Jessee outlined a new Web-based patient-safety tool meant to help physician practices evaluate their performance in key areas, such as drug-prescribing, personnel qualifications and patient education. The product is available for free, but comparative data and benchmarking reports will cost $200.
The other is a new online simulator that reportedly compresses three years of administrative experience in a 12-doctor primary-care practice into a five-week, Web-based training experience for medical-practice executives. The simulator, created in partnership with Regis University in Denver, uses historical data from MGMA survey reports. It will cost $600 per person.