MGMA: Cost management, patient satisfaction affect medical practice success

Organizations deemed “better-performing medical practices” by the Medical Group Management Association’s “Performance and Practices of Successful Medical Groups: 2010 Report Based on 2009 Data,” excelled in four performance management categories.

These categories are profitability and cost management; productivity, capacity and staffing; accounts receivable and collections; and patient satisfaction. Within these categories, which are used to select the more than 500 “better performers” in the MGMA’s annual Cost Survey Report, successful practices demonstrated management behaviors that may be the key to their financial success.

Successful medical practices use formal patient satisfaction surveys, according to the MGMA. More than 30 percent of them benchmark results to other practices and more than 60 percent educate physicians about behavior.

For example, About Women OB/GYN in Woodbridge, Va., implemented an online patient portal with several capabilities, including the ability to answer common questions, monitor patient vitals such as weight gain, and track medications. The portal also expedites prescription refills and renewals and allows patients to validate information prior to visits, saving the staff valuable time.

“An eight-hour day can be a stressful eight hours or it can be an enjoyable eight hours," said About Women OB/GYN Practice Administrator Yolanda Raffert, MHA, CPC. "So the stress level and the lifestyle enjoyment … have obviously improved with the portal itself.”

According to the report, with the exception of multi-specialty practices, better-performing practices spent more on information technology operating expenses than their counterparts. They also reported less bad debt to fee-for-service activity per full-time-equivalent physician.

The majority of better-performing practices report lower total operating costs as a percentage of total medical revenue and consistently noted more procedures per FTE physician. For example, better-performing cardiology practices conducted 39.8 percent more procedures and orthopedic practices reported 67.9 percent more procedures per FTE physician than practices not considered better-performing.

Those practices at the top of their class also have a lower percentage of their total A/R in the 120-plus-day category than their counterparts, indicating that strong cash flow is crucial to the success of any practice.

The report details how more than 10 percentage points separate the best performers from their peers in numerous other categories.

The MGMA report, a benchmarking standard among medical groups for more than a decade, was produced using data from 544 better performing-practices that responded to the MGMA 2010 Cost Survey, as well as a supplemental questionnaire that assessed practices and procedures.