Magazine article Medical Economics

Doctors Chip Away at Practice Costs

Magazine article Medical Economics

Doctors Chip Away at Practice Costs

Article excerpt

Despite a meager 1.6 percent rise in median gross revenue last year, physicians boosted their median net practice income by nearly 6 percent, to $148,890. How? By cutting practice costs.

According to the latest Medical Economics Continuing Survey, doctors in office-based private practice pared their median professional expenses to $87,980 in 1994, a 6.2 percent drop from the median figure for 1992 (the year we've used for most comparisons in this article). While non-surgeons managed a modest 2.2 percent reduction in median practice costs over the past two years, surgical specialists cut their overhead by nearly 15 percent over the same period.

Primary-care doctors didn't fare as well, however. Office expenses rose noticeably for FPs (5.7 percent) and GPs (9.4 percent) from 1992 to 1994, and inched upward for internists and OBG specialists. Only pediatricians, among primary-care physicians, reduced practice costs significantly--by 6.3 percent--over those two years.

As in previous years, office payroll and office space accounted for the lion's share of doctors' expenses. Last year, however, physicians managed to shave the cost of those categories both in dollars and as a percentage of gross. Most other expense categories were down, too. The median for malpractice premiums, however, rose slightly, to $9,700.

A breakdown of office overhead by practice size shows that soloists and small-group doctors typically spend much more than those in groups of 10 or more. …

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