Magazine article Medical Economics

Practice Expenses Creep Back Up

Magazine article Medical Economics

Practice Expenses Creep Back Up

Article excerpt

Overall, doctors got by with modest increases last year. Even so, some saw worrisome jumps in major spending areas.

fter two years of flat or falling expenses, the cost of running a medical practice grew last year. Nationwide, based on the responses of office-based M.D.s and D.O.s to questionnaires for the latest Medical Economics Continuing Survey, the 1995 median total was $89,760, up from $87,980 in 1994.

Overall, surgical specialists fared worse than non-surgeons. Surgeons typically spent $124,280 in 1995 to run a practice-5.3 percent more than in 1994. Orthopedists had the biggest increase among all the fields we analyzed: Their median expenses rose to $205,580 from the previous year's $168,810, helping to bring down their net income by 3.4 percent. Next came neurosurgeons, whose practice costs were up 8.0 percent.

In contrast, non-surgeons' median professional spending rose a sedate 2.3 percent. FPs and OBGs actually registered decreases, of 2.1 percent and 1.6 percent respectively. While pediatricians' outlays soared 19.0 percent, physicians in the rest of the non-surgical fields we analyzed reported single-digit rises ranging from 3.1 percent for gastroenterologists to 9.0 percent for GPs. Internists were on the low side, with a 3.9 percent increase; cardiologists' overhead was a bit higher, at 4.6 percent.

But a few specific items-unfortunately, the largest ones-are up alarmingly for some primary-care doctors. For example, FPs' payroll costs climbed by about 27 percent, while their rent and mortgage payments rose by nearly 19 percent. Pediatricians spent almost 18 percent more to pay their office staffs, and OBGs laid out almost 19 percent more for office supplies.

In some other fields, however, spending on these same items stayed flat or even declined. General surgeons, for instance, paid about the same as in 1994 for office space. …

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