MGMA: Cardiology costs outpacing revenue

Cardiologists blame increasing expenses on investments in technology and higher staff salaries, although they hope these investments will pay off down the road.

By Mike Norbut, AMNews staff. June 16, 2003.

Cardiology costs are rising faster than revenues, according to one study, a disturbing trend physicians attributed primarily to investments in technology and answering salary demands of more experienced staff.

And this was calculated before Medicare and Medicaid pay cuts and hikes in liability insurance premiums became a reality over the last two years.

The median total operating cost per full-time cardiologist jumped 15.8% between 2000 and 2001, from $364,856 to $422,659, according to the Medical Group Management Assn.'s 2002 Cost Survey for Cardiovascular/Thoracic Surgery and Cardiology Practices.

Meanwhile, medical revenue per physician only rose about 6.2%, from $847,643 in 2000 to $899,919 in 2001, according to the report.

Some practices see the trend continuing as well. For example, the 25-physician North Ohio Heart Center in Lorain, Ohio, saw its per-physician overhead costs increase from about $580,000 in 2001 to $641,000 last year, said cardiologist John Schaeffer, MD, president of the group and a Tri-Chair of the American College of Cardiology's Advocacy Committee.

"You can't have numbers happen like this all the time," Dr. Schaeffer said. "Your bottom line has to at least break even. Now, most of us are trying to figure out how to work harder, longer, and more efficiently, but there's always an end to that," he said.

Other specialties studied by MGMA showed revenues outpacing costs. For example, primary care physicians saw revenues increase 4.9%, while costs only went up 1.3%.