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MGMA's Vice President Comments on the Correlation Between Patient Numbers & Bottom Line
Posted 7.13.09

After reading the article, "When patient volume decreases, bad things happen - quickly," in the July issue of MGMA Connexion, Practice-Reps' Managing Partner, Mike Ranson, wrote to the author, David Gans, MSHA, Vice President of Innovation & Research at the Medical Group Management Association (MGMA).

The article calculates the bottom line effect to a medical practice owner's profit when patient volume decreases. The study factors in total charges, minus fixed and variable costs for a typical practice and proves that a 5% reduction in patient volume for a practice results in a 13% reduction in physician compensation and benefits. Startling as that statistic is, it gets exponentially worse the more patient volume decreases: A 10% reduction in patient volume equates to a 27% reduction in physician compensation and benefits, and a 30% reduction in patient volume equates to a 80% reduction in physician compensation and benefits!

Ranson contacted Gans, asking "Based on your calculations, is it safe to assume then that a practice owner could expect an increase of 13% in profit with a 5% growth in patient volume?" Gans responded that yes, "If patient revenues increase 5%, then ‘bottom line’ physician income will increase 13%."

This is third party validation of Practice-Reps' value. For every 5% increase in patient volume we bring to your practice through new referrals, we increase your bottom line 13%! Read about the new patient volumes we've brought to practices in the Mid-Atlantic states by checking out our Success Stories section.


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