Survey: IT Expenses per Physician Continue to Rise to Nearly $19,000 | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Survey: IT Expenses per Physician Continue to Rise to Nearly $19,000

July 20, 2017
by Heather Landi
| Reprints

Information technology (IT) expenses for physician practices are on a slow and steady rise for most practices, and last year, physician-owned practices spent between nearly $2,000 to $4,000 more per FTE physician on IT operating expenses than they did the prior year, according to a recent Medical Group Management Association (MGMA) survey.

The 2017 MGMA DataDive Cost and Revenue Survey today revealed that IT expenses per physician each year has increased $2,000 to $4,000 over the last year, leaving total IT expenses per physician between $14,000 to $19,000, dependent upon specialty. The MGMA survey is based on comparative data of more than 2,900 organizations and 40 specialties and practice types.

The survey results indicate that the increase is less for hospital-owned practices. These expenses include the cost of purchased IT services such as the maintenance of electronic health records (EHRs) and patient portals, as well as any contracted expenses for the repair of practice hardware and software needs.

The study also showed key factors in profitability and productivity reside in the utilization of non-physician providers and key support staff, as well as payer mix and drug costs.

Between 2015 and 2016, practice operating expenses increased at nearly the same rate as revenue. The practices that came out with increased revenues owe it namely to increased non-physician providers and support staff. Practices with more support staff per FTE physician not only report having higher levels of revenue, but also have increased productivity. Across all specialties, the difference is one to three more support staff per FTE physician in physician-owned practices than in hospital-owned.

The survey also found that payer mix has an impact on costs for medical groups. Primary care practices with a lower percent of government payer mix report having higher operating costs and even higher revenue after operating cost per FTE physician in both physician-owned and hospital-owned practices. Within the physician-owned primary care groups, those with a mix of 30 percent or less, yield $159,307 more in revenue per physician than those with a mix of 50 percent or more. In hospital-owned practices that difference is $221,497.

Additionally, the survey results indicate that drug supply costs continue to rise. From 2015 to 2016, drug supply expenses increased by more than 10 percent per FTE physician: 11 percent for nonsurgical specialty, just over 11 percent for primary care and more than 16.5 percent for multispecialty practices. The largest increases in drug supply costs over the last five years have been reported for multispecialty practices at an increase of 53 percent more per FTE physician and 87 percent more per FTE physician in primary care practices.

 

 

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Survey: Infrastructure, Interoperability Key Barriers to Global HIT Development

A new survey report from Black Book Research on global healthcare IT adoption and records systems connectivity finds nations in various phases of regional electronic health record (EHR) adoption. The survey results also reveal rapidly advancing opportunities for U.S.-based and local technology vendors.

Penn Medicine Opens Up Telehealth Hub

Philadelphia-based Penn Medicine has opened its Center for Connected Care to centralize the health system’s telemedicine activities.

Roche to Pay $1.9B for Flatiron Health

Switzerland-based pharmaceutical company Roche has agreed to pay $1.9 billion to buy New York-based Flatiron Health Inc., which has both an oncology EHR and data analytics platform.

Financial Exec Survey: Interoperability Key Obstacle to Value-Based Payment Models

Momentum continues to grow for value-based care as nearly three-quarters of healthcare executives report their organizations have achieved positive financial results from value-based payment programs, to date, according to a new study from the Healthcare Financial Management Association (HFMA).

Cerner, Children's National to Help UAE Pediatric Center with Health IT

Al Jalila Children's Specialty Hospital, the only pediatric hospital in the United Arab Emirates, has entered into an agreement with Washington, D.C.-based Children's National Health System to form a health IT strategic partnership.

Telemedicine Association Names New CEO

The American Telemedicine Association (ATA) has named Ann Mond Johnson its new CEO, replacing Jon Linkous who stepped down suddenly last August after 24 years as the organization’s CEO.