By: Diana Allen

Hospitals and physician groups are facing lower reimbursement models, with high risk populations and even higher overhead. Physician practices are facing resource drains with implementing Stage 2 of Meaningful Use and ICD-10. Hospitals operating on lean operational budgets are partnering with other companies to manage core functions to bring effective business processes. In these challenging economic times, hospitals and physician groups are finding partnerships with outside companies to improve their bottom line by outsourcing individual services or the entire revenue stream.

Hospital acquisitions of multispecialty physician practices are on the increase, as more doctors opt out of private practice. Often physician practice management is outside the expertise of the hospital administration or the staffing costs are prohibitive. Salary expenses for patient billing staff in multispecialty practices averages 2.7 percent of total practice net medical revenue plus benefits, according to the MGMA Cost Survey for Multispecialty Practices: 2013 Report Based on 2012 Data. However, a recent MGMA analysis of better-performing medical practices shows that 3.9 percent of respondents contracted out to billing services compared with 10 percent of other surveyed practices. The MGMA Cost Survey reports provide the annual operating costs for purchasing billing services as a percentage of total medical revenue and per full-time-equivalent (FTE) physician. Outsourcing billing services improved the bottom line of the better performing practices, which allowed them to reallocate resources to other core tasks.