2010 has seen an increase in physicians’ compensation across specialties, even as most medical groups have been operating at significant financial losses; in fact, the specialties have seen increases of 2.6% for Primary Care, 3.8% for surgical specialties, and 2.4% for other medical specialties.
According to an AGMA survey of 49,700 US healthcare providers, group practices in the northern region have topped the list, averaging a loss of $10,669, followed by those in the southern region, with an average loss of $1,870, and the eastern region, with an average loss of $1,597. Western regions neared last year’s breakeven point, i.e., $27.
In the current economic climate, these medical groups continue to face the challenge of delivering the highest-quality, coordinated care to the patients they serve, despite these high operating losses. According to this survey, a major reason for the negative operating margin is the increased integration of medical groups and health systems, in which each physician’s funding goes to their medical group’s corpus. Another reason contributing to operating losses is the difficulty of recovering expenses incurred to enhance patient care under a volume-based reimbursement system in the US.
Hence, it is advisable for these group practices to seek experts who can provide relevant consultancy services to identify lacunas and streamline their overall functioning by reducing administrative costs while increasing operating revenue.
Medical Billers and Coders have expertise in providing consultancy services to group practices to enhance their revenue amid flat reimbursement from both government and private payers, along with other administrative challenges.
Offering the best solutions in strategic, financial, and operational consultancy, MBC provides professional support and assistance to healthcare providers to stay abreast of changing industry norms, so they can focus on their core services, such as patient care.
Government Reference Links
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MedPAC (Medicare Payment Advisory Commission) Reports to Congress
MedPAC is an independent federal advisory commission that regularly publishes reports analyzing Medicare payment adequacy, physician payment trends, and recommendations that directly relate to the financial pressures faced by medical practices. MedPAC – Reports and Payment Policy Information
FAQs
Medical group practices are experiencing operating losses due to increased administrative expenses, higher integration costs with health systems, and challenges in recovering care-enhancement expenses under a volume-based reimbursement model, even though physician compensation continues to rise across specialties.
According to the survey, medical group practices in the northern region report the highest average losses, followed by those in the southern and eastern regions. Practices in western regions are closer to breakeven, with minimal operating loss.
As medical groups integrate with larger health systems, physician revenues are often pooled into a central corpus, which can reduce individual practice margins and increase overhead, contributing to negative operating margins.
Consultancy services help identify operational gaps, reduce unnecessary administrative costs, optimize revenue cycle workflows, and implement strategic financial planning to improve overall practice performance and profitability.
Medical Billers and Coders (MBC) provide strategic, financial, and operational consulting, focusing on revenue optimization, cost control, and compliance with evolving industry standards—enabling providers to improve cash flow while maintaining high-quality patient care.
Catering to more than 40 specialties, Medical Billers and Coders (MBC) is proficient in handling services that range from revenue cycle management to ICD-10 testing solutions. The main goal of our organization is to assist physicians looking for billers and coders, at the same time help billing specialists looking for jobs, reach the right place.
