Executive Session: Interpreting the data behind practice losses with Timothy Smith

David N. Gans, MHSA, senior fellow, MGMA, recently spoke with Timothy Smith, CPA, ABV, principal, TS Healthcare Consulting, to dig deeper into key metrics in MGMA DataDive to explore the issue of losses in hospital-owned and physician-owned practices and how to interpret cost and revenue data to determine what’s real and what’s not.

As Gans notes, hospital-owned practice data looks much different, and the key to understanding the differences is in financial data, which have not changed drastically in the past three years. Looking at total medical revenue per physician in MGMA DataDive Provider Compensation, the total for physician owned-groups – slightly more than $1.2 million – is about double that of hospital-owned groups (about $600,000) for multispecialty groups with primary and specialty care. Similarly, operating costs in physician-owned groups – about $800,000 – are about double those of hospital-owned groups ($400,000). At the end of the day, physician practices break-even, yet hospital practices regularly report a loss.