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The MGMA has released their annual Cost Survey for medical practices. Not surprising the report shows costs are rising at a greater rate than reimbursement. Physicians have seen this trend going for many years but they have adapted and mitigated some of the negative direction of costs and reimbursement. Increased patient responsibility and the current economic environment continues to pressure medical groups, while supply and staff costs have not seen comparable reductions. Margins have been squeezed to the limit and there seemingly is no relief insight. According to Peter Lucash:

This crunch – rising costs and flat and declining reimbursement – creates what I have described as the disappearance of the margin of management error.

This makes it necessary for medical groups to focus on the business of medicine. It has never been as important as it is now to create a budget (and monitor it routinely), identify practice costs and potential savings, manage staff and labor costs, and gain control of the revenue cycle.  This is not a time to be complacent; it is a time to become proactive.


Click here for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.