Physician Practices Losses Increase

Integrated Delivery Systems (IDS) have been reporting losses for their physician practices for years. The 1998 numbers showed a dip in the number of reporting losses and it looked like there may be a change in the trend. However, the Ernst & Young LLP 1999 Physician Practice Benchmarking Survey shows that 96% of survey respondents reported losses in their physician practices. Losses averaged $111,000 per physician.

Compensation and productivity are both stalled according to the survey. Primary care specialists showed little to no growth while surgical specialists’ productivity increased 6% while their pay rose about 5%. It’s getting harder for physicians to earn more with reimbursement decreased by Medicare and HMOs.

The survey shows that IDS physician practices continue to challenge executives and physicians. Operating costs are similar across the board. The better performing groups tout higher productivity and revenues. It is clear that physicians today are working much harder for smaller gains.

The 1999 Benchmarking Survey compiles data from more than 20,000 physicians, physician administrators, and allied health providers in 129 integrated delivery systems and group practices. To purchase the complete survey, email Richard Cederholm at Ernst & Young’s Survey Center or call him at 213.977.3426.

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