In Kentucky, roughly 41 percent of hospitals and health systems are losing $100,000 or more annually for each physician in their physician groups, according to a report from Dean Dorton Allen Ford, an accounting and consulting firm based in Lexington, Ky.
For the report, the firm surveyed 26 CEOs and CFOs representing 79 hospitals, all of which were located in or near Kentucky. While 41 percent said they are losing at least $100,000 per physician per year within hospital-owned physician practices, another 29 percent said their organizations are losing between $50,000 and $99,000 per physician.
The findings within Kentucky hospitals fall in line with those from MGMA-ACMPE. Last year, MGMA found that physicians in hospital- or health system-owned multispecialty practices saw a larger jump in operating costs last year than providers in physician-owned groups.
Other findings from the report included:
• About 93 percent of hospitals reported operating losses within their physician groups if their group had been operating for eight years or more.
• Every hospital reported losing money on a physician practice if it had 30 or more physicians, indicating that more physicians equals more niche specialties, which drive up costs.
• Hospitals with physician groups that operate as separate legal entities reported the highest losses.
The Dean Dorton Allen Ford report concluded that although many hospitals benefit from "the tradeoff of additional revenue streams to the hospital for losses on employed physicians," having employed physicians disconnected from the hospital's culture and bottom-line accountability carries "significant risks."
For the report, the firm surveyed 26 CEOs and CFOs representing 79 hospitals, all of which were located in or near Kentucky. While 41 percent said they are losing at least $100,000 per physician per year within hospital-owned physician practices, another 29 percent said their organizations are losing between $50,000 and $99,000 per physician.
The findings within Kentucky hospitals fall in line with those from MGMA-ACMPE. Last year, MGMA found that physicians in hospital- or health system-owned multispecialty practices saw a larger jump in operating costs last year than providers in physician-owned groups.
Other findings from the report included:
• About 93 percent of hospitals reported operating losses within their physician groups if their group had been operating for eight years or more.
• Every hospital reported losing money on a physician practice if it had 30 or more physicians, indicating that more physicians equals more niche specialties, which drive up costs.
• Hospitals with physician groups that operate as separate legal entities reported the highest losses.
The Dean Dorton Allen Ford report concluded that although many hospitals benefit from "the tradeoff of additional revenue streams to the hospital for losses on employed physicians," having employed physicians disconnected from the hospital's culture and bottom-line accountability carries "significant risks."
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