News: MGMA reports rising operating costs in healthcare over the last 2 years

With inflation pressures, staffing shortages, and supply chain disruption, hospitals and healthcare centers are seeing their operating costs rise, a report from the Medical Group Management Association (MGMA) says. Costs rose at both physician-owned and hospital-owned centers, with the only area not experiencing a rise being hospital-owned primary care facilities. The other areas categorized, surgical facilities and nonsurgical facilities, had persistent rising expenses from 2019 to 2021, Becker’s Hospital Review reported.

About 90% of medical practices reported that costs have risen faster than revenues in 2022. The study found that hospital-owned practices saw some of the most significant jumps in operating costs, with a 17.52% incline in nonsurgical costs and a 6.92% incline in surgical costs.

“Rising expenses and the persistent challenges to restore productivity and revenue in healthcare organizations have led to several health systems reporting significant losses and others with many operating margins under 1%,” the report said. It cited staffing as the greatest financial challenge facing healthcare, according to practice leaders asked at the beginning of 2022. About 44% of medical practices reported medical assistants were the most difficult role to recruit for, followed by nurses at 27% and administrative billing staff at 18%. Consulting fees, rising insurance premiums, and other supply costs were also reported as significant contributing factors.

Editor’s note: To read Becker’s Hospital Review’s coverage of this story, click here. To read the full MGMA report, click here.