Hospital-Owned Practices Pull Ahead, But Staffing Shortages Ding All
Hospital-owned practices report year-over-year increases in medical revenue as physician-owned practices face cuts, but staffing shortages are catching up to all.
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By - Hospital-owned practices are faring better than their physician-owned counterparts despite significant revenue challenges last year, according to new data from the Medical Group Management Association (MGMA).
The group recently published the “2023 MGMA DataDive Cost and Revenue” report reflecting data from more than 4,000 organizations across specialties and practice types. The data shows year-over-year increases in medical revenue for hospital-owned practices in 2022, putting the organizations firmly ahead of their pre-pandemic levels.
Meanwhile, physician-owned practices experienced across-the-board decreases in total medical revenue last year.
Physician-owned, non-surgical specialty practices were hit especially hard in 2022, with a 14.88 percent decrease in medical revenue per full-time equivalent (FTE) physician from 2021 to 2022, compared to a 17.8 percent increase from 2020 to 2022 and a 13.18 percent increase from 2018 to 2022. Their hospital-owned peers saw a 1.79 percent increase from 2021 to 2022, with even larger increases over three (25.68 percent) and five (34.55 percent) years.
Additionally, physician-owned surgical specialty practices saw decreases in the medical revenue per FTE physician trend across one year (-14.53 percent), three years (-13.09 percent), and five years (-12.14 percent). Similarly, hospital-owned practices had positive trends across all trend periods.
However, staffing shortages are catching up to practices regardless of ownership.
The report found a four-year trend of decreased support staffing levels, from 5.08 total support staff per FTE physician in 2019 to 3.0 in 2022 for physician-owned practices. Physician-owned primary care practices saw the largest decrease of more than three FTE support staff roles in the same period.
Decreased support staff was also split almost evenly between business office, front office, and clinical support staff positions, according to the report.
As a result of decreased staffing levels, practice leaders reported lost productivity, worsening staff morale, more time spent on staff recruitment, and increased expenses from temporary or contract workers hired to fill gaps. Patient experience also took a hit because of patient access impacts and decreased care coordination, practice leaders said.
Additionally, MGMA pointed out several revenue cycle impacts from staffing shortages, including increased days in accounts receivable (A/R) and claim denials. Practices may also miss revenue opportunities without the bandwidth to chase dollars from coding errors, underpayments, and certain denials.
"The lingering post-pandemic staffing shortages continue to challenge medical groups across the country as they miss out on revenue without adequate support staff," Ron Holder MHA, FACMPE, FACHE, CAE, chief operating officer at MGMA, in a statement.
"On top of that, many practices are missing the prompt payments they once enjoyed which further impacts the bottom line and forces medical groups, hospitals and health systems to look for creative solutions in navigating these challenges.”
