Independent physician practices spend more than twice as much on health IT than their hospital-owned counterparts

stethoscope on money
Physician-owned practices spend far more on health IT compared to those with hospital support.

Health IT costs are steadily increasing for physician practices across the country, but privately owned practices are absorbing a much larger portion of those costs.

Physician-owned practices spent between $2,000 and $4,000 more per full-time physician last year than they did in 2015, according to a survey published last month by Medical Group Management Association (MGMA). Those costs ranged from $14,000 to $19,000 per physician.

But hospital-owned physician practices are spending far less, according to Medscape Medical News, which took a deeper dive into MGMA’s survey data. Median health IT costs for physician-owned primary care single-specialty groups was about $19,000 per physician, compared to just under $8,000 among hospital-owned groups.

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Surgical groups had a similar disparity, with median health IT costs surpassing $14,000 per physician among physician-owned practices while their hospital-owned counterparts spent less than $6,000.

The inconsistency boils down to scale, Meghan Wong, assistant director of data solutions for MGMA, told Medscape. Hospitals purchasing health IT tools can negotiate much lower price points for small or medium-size practices with far fewer physicians. Furthermore, hospitals and health systems have the internal resources to manage health IT, driving down maintenance and support costs.

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That may also explain the significant gap in EHR adoption rates between hospital-owned physician practices and free-standing organizations. According to a survey published by HIMSS Analytics this week, 92.7% of hospital owned practices have adopted EHRs, up from 68.2% five years ago. EHR adoption rates among free-standing practices barely cracked 70%, a decline of nearly eight percentage points over the last year.

However, HIMSS Analytics argued the figures reflect “nearly universal adoption” given the number of physicians retiring and the influx of practices being purchased by hospitals and health systems.