Annual IT costs as high as $19,000 per doctor for some practices

In 2016, physician-owned practices spent between $2,000 and $4,000 more on IT expenses per full-time-equivalent (FTE) physician, according to Medical Group Management Association’s (MGMA) annual DataDive Cost and Revenue Survey.

Depending on specialty, total IT expenses throughout the year added up to between $14,000 and $19,000 per physicians. Expenses included purchased IT services like electronic health record maintenance and patient portals, as well as contracted expenses, like repairs to hardware and software. The increase was smaller for hospital-owned practices.

The survey, which included data from more than 2,900 organizations, also found the rise in operating expenses for practices nearly matched the growth in revenue between 2015 and 2016. Those which managed to increase revenues, MGMA said, were ones which hired more non-physician providers (NPPs) and support staff. The report stated practices with a higher NIPP to physician ratio (0.41 or more NPPs per FTE physician) earned more in revenue after operating cost than practices with a ratio of 0.20 NPPs per physician or lower.

“Our annual Cost Survey continues to show the importance of NPPs and support staff in physician practices and hospitals, as well as other factors that impact practices’ bottom line" MGMA President and CEO Halee Fischer-Wright, MD, said in a statement. “Contrary to what some may believe, with increased staffing come much larger gains in revenue after operating cost, as well as productivity.”

The survey’s other findings included:

  • Drug supply costs continued to rise, increased by more than 10 percent per FTE physician, with a larger 16.5 percent jump for multispecialty practices.
  • Having a lower percentage of government programs in the payer mix meant higher revenue for both physician and hospital-owned primary care groups. For physician-owned practices with a mix of 30 percent or less, they yielded $159,307 more in revenue per physician compared to practices with a mix of 50 percent or more. For hospital-owned primary care groups, the difference was $221,497.