Independent practices acquired by hospitals are seeing operating costs spike as they try to keep up with the federal electronic health-record requirements, according to a report released Thursday by the Medical Group Management Association.
Multispecialty physician practices spent an average of $20,693 per full-time-equivalent doctor in 2014, a 12% increase from the year before and a 34% increase from 2010.
The report's opinion is that it's money well spent if any of it is updating technology.
“The way patients ask for and receive care is changing,” Dr. Halee Fischer-Wright, CEO of MGMA, said in a statement. “The increased use of technology can improve the quality of patient care by improving records management, optimizing workflow and meeting HIPAA compliancy requirements.”
More than 3,100 physician groups were surveyed for the report, which includes information on other administrative issues such as staffing ratios. It found that between 2010 and 2014, physician practices increased use of non-physician providers, such as physician assistants and nurse practitioners, to meet demand and compete to hire from a limited supply of doctors.
Administrative burdens and costs related to running an independent practice has a growing number of physicians opting to become employees of hospitals, said Kristin Ficery, managing director of provider consulting with Accenture.
A firm released a report in July that projected doctors would continue leaving private practice to work for hospitals and that only a third of physicians would remain independent by the end of 2016.
“Certainly some independent physicians saw what was coming from a reimbursement perspective, did the math and realized that the costs that were bearing down on their practice—particularly those that were under 10 physicians.” Ficery said.
The push away from independent practice comes at a time as health providers look to acquire more clinics and physician groups.
An Accenture report released this month found the share of acquisitions made by health providers of practices and clinics was projected to reach 84% by 2018, while the purchase of hospitals was expected to decrease from 21% in 2014 to only 6% by 2018.
Despite such trends, a July report by the American Medical Association found most physicians continue to provide care to patients in small practices, with 61% of doctors reportedly working in practices of 10 or fewer physicians, with little change in practice size between 2012 and 2014.