New Survey Finds Medical Group Operating Costs Continue to Outpace Revenue 

Alexandria, VA – Data from the recent AMGA 2023 Medical Group Operations and Finance Survey reveal medical groups are facing challenges related to providing quality, cost-effective care in an ever-changing healthcare environment, including operating expenses that outpace revenue gains, labor shortages, access issues, and revenue cycle optimization.  

The AMGA 2023 Medical Group Operations and Finance Survey, which features data from over 15,000 providers, captures key performance indicators to support benchmarking and strategic planning. Among the findings, median loss per physician for system-affiliated groups is now more than $249,000, as operating expense increases outpace revenue gains. For system-affiliated groups, we continue to see the gap widen between revenue and expenses per physician. Median total revenue per physician increased from $608,639 to $719,901, while median total expenses per physician increased from $905,283 to $1,036,238. When looking at a longer-term trend, median total revenue per physician has increased 9.1% compared to pre-pandemic performance (2020 survey results), while median total expense per physician has increased 26.5% over the same period. 

“Survey results indicate that ongoing external pressures—such as cost of labor, staffing shortages, CMS [Centers for Medicare and Medicaid Services] fee schedule and regulatory changes —are impacting medical group performance,” said AMGA Consulting Chief Operating Officer Mike Coppola, MBA. “Today’s leaders are continually focused on improving operational efficiencies through more virtual visits, patient self-scheduling, care team redesign, the use of AI to automate and drive process improvements, and other strategies.” 

Labor Shortages

The labor challenges facing many medical groups are driving increased expenses, and survey results show the increase is particularly acute for system-affiliated groups. 

Access

At the same time, the focus on maintaining or improving  access remains a priority for many groups.  Staffing constraints for physicians, advanced practice clinicians (APCs), and clinic staff are forcing groups to look at process changes, care model changes, and automation to drive efficiencies. 

Telehealth services remain a key access point for many medical groups, with the utilization increasing, according to the 2023 survey. The amount and frequency of telehealth visits saw dramatic increases during the COVID-19 pandemic, then a decrease when the pandemic subsided.  The 2023 survey results reflect a leveling off of  telehealth visits , particularly in primary care specialties.

Revenue Cycle

Survey results also revealed the need for tools to manage revenue cycle performance, including external benchmarks for comparison to others and internal trends for comparison to self. 

“Based on these benchmarks, opportunities exist for groups to improve performance in revenue cycle process, specifically in controllable denials,” said Coppola.

Controllable denials still represent 17.1% of the total, and avoidable denials can be costly in a market with tight margins. Groups are evaluating the full spectrum of options to address operational issues, from assessing current group mix and composition to increased rigor around efficiencies and access.

“The survey revealed the multiple operational challenges medical groups are facing today,” said Coppola. “It also indicated some key areas where they can benchmark and evaluate how they can continue to deliver quality, cost-effective care to their communities.” 

About the Survey

The 2023 edition of AMGA’s Medical Group Operations and Finance Survey features data from more than 5,700 individual clinics and over 15,000 providers. 

This year’s report includes a profile of the survey respondents along with key performance indicators and a focus on benchmark data for both private practice and integrated health system organizations. Metrics are reported per physician FTE, per provider FTE, and per 10,000 work relative value units (wRVUs). 

This survey contains data on an expansive list of benchmarks, such as:

•    Operational overhead staffing by functional area and role

•    Revenue cycle metrics

•    Patient access/scheduling metrics

•    Telehealth services data

•    Financial performance from high-level summary metrics to line-item detail

For press copies, please contact Taylor Martin.

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About AMGA Consulting

AMGA Consulting assists healthcare organizations in navigating the changing industry environment. AMGA Consulting builds clients’ organizational capabilities through effective governance, operational improvement, strategic alignment, talent management, provider compensation design, fair market value analysis, and total rewards solutions.

About AMGA

AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans. For more information, visit amga.org.