Practice Revenues Decline
Medical practice revenues fell in 2008, possibly because of declining patient volumes and payments from people in financial hardship, according to the Medical Group Management Association. Medical practices responded by trimming overhead costs more than 1%, but that wasn't enough to offset shrinking revenues, the MGMA found in its yearly practice-cost survey. Multispecialty group practices saw a 1.9% decline in total medical revenue in 2008, with substantial drops in both the number of procedures and the number of patients. Bad debt in multispecialty group practices from fee-for-service charges increased 13% from 2006 to 2008. Practices trimmed their expenses mostly by cutting support-staff costs. However, total worker count remained unchanged over the study period, suggesting that medical practices may have eliminated raises and bonuses or even cut pay to avoid laying off employees, the MGMA said.