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PHYSICIAN PRACTICES: Typical expense buckets

How to improve the financial performance of hospital-owned physician practices is the topic of this article by the CEO of a consulting firm.  His argument is that attention should be paid to increasing revenue rather than cutting costs.  He cites the following statistics on the expense buckets for a typical physician practice:

  • 70 percent (or more) – related to labor
  • 5 to 10 percent – related to building occupancy (fixed costs)

Cutting costs often means cutting jobs, which usually involves support staff, which forces physicians to do jobs that they should be delegating.  Five suggestions for improving performance of the hospital-owned physician practice are discussed.

Source: Halley, M.C. (2014, Oct.). Breaking even with hospital-owned practices. HFM. Healthcare Financial Management, 68(10), 38-40.  Click here for access to the article: http://www.hfma.org/Content.aspx?id=25370  Posted by AHA Resource Center (312) 422-2050 rc@aha.org

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