Reviewing practice expenses can improve profitability

Many physician group practices--particularly practices that have been acquired by hospitals and integrated delivery systems--are experiencing expense increases and productivity decreases. Physician group practices can take steps to reverse these unfavorable trends by carefully reviewing and benchmarking practice costs related to physician compensation plans, support staff salaries and benefits, occupancy costs, clinical supply costs, and malpractice insurance. Group practices also can improve cost management and resource utilization by creating an operating budget based on historical expenditures and anticipated revenues and by comparing it with peer benchmarks.