MMS Analysis Shows a Declining Practice Environment for State’s Physicians

Contact: Richard P. Gulla
781-434-7101
rgulla@mms.org 

Massachusetts moves in opposite direction from rest of U.S.

Waltham, Mass. – September 23 – A Massachusetts Medical Society analysis released today shows a continuing, but slight decline in the state’s physician practice environment, affected primarily by the rising costs of maintaining a medical practice, at the same time as the practice environment for physicians in the rest of the country is slightly improving. 

The Society’s annual Physician Practice Environment Index, a statistical compilation of nine factors that influence the practice climate for physicians, declined 0.3% for 2013, marking the 17th decrease for the index in the 22 years that the Society has been compiling such data.   

Since 2006 the Massachusetts index has remained relatively unchanged, with virtually no improvement in the practice environment.  In contrast, the U.S. index has increased every year in that seven-year period. The Massachusetts index stands at 8% below the U.S. index for 2013 – the largest gap between the two since 1992.

“The practice environment is a key element that impacts physicians and health care delivery,” said Richard Pieters, M.D., president of the Massachusetts Medical Society, “and unfortunately we’re moving in the opposite direction from the rest of the country.  Our environment remains near our lowest levels, primarily because the cost of running a medical practice has risen steadily for nearly two decades. The fact is that Massachusetts is an expensive place to practice medicine.”

Dr. Pieters said that even though the rate of increase has slowed in the last five years, from 6.5% to just over 1% annually, the cost of a medical practice is critically important, as these cost factors influence such areas as the recruitment and retention of physicians.

Dr. Pieters added that the average physician’s cost to practice medicine in the state is about 20% higher than in the rest of the U.S. The cost of maintaining a practice includes wages of   nurses and other staff employed by the medical practice, expenses for medical supplies, and rent for office space. 

Adding to the decline in the practice environment index is the ratio of housing prices to physician income. As the economy has recovered over the last four years, from 2009-2013, housing values in the state have risen about 10%, with physician income rising less than half of that, at 4.2%. While housing prices affect everyone, this indicator, along with the rising cost of operating a practice, provide a basis for evaluating the personal and professional costs of practicing medicine in Massachusetts.  

Among other findings in the Society’s analysis affecting the Massachusetts index were slight increases in applicants to the state’s medical schools (up 0.3%), in the percentage of Massachusetts physicians over 55 years of age (up 0.7%), in visits to emergency departments (up 0.5%), and in physician income (up 0.6%). Average rates for physicians’ professional liability insurance have remained stable over the last three years. The impact of the changes in these variables, however, was not strong enough to overcome the impact of the high costs of housing and maintaining a practice. 

Comparison to U. S. Index  

The Medical Society’s compilation of a practice environment index for the U.S. provides a reference point to judge changes in Massachusetts.  For 2013, the U.S. index increased 0.2% and has advanced nearly 5% since 2006. Yet it too, like the state index, remains some 20% below its 1992 level.     

The 9 Factors in the Index  

The MMS Physician Practice Environment Index measures the impact of nine indicators that influence the practice environment for physicians in Massachusetts: (1) the number of applications to Massachusetts medical schools; (2) the percentage of physicians over 55; (3)  the number of employment ads in the New England Journal of Medicine;  (4) median physician income; (5) ratio of housing prices to median physician income; (6) professional liability costs; (7) physician cost of maintaining a practice, (8) mean hours per week spent in patient care; (9) annual number of visits per emergency department. 

The complete MMS Practice Environment Index report is available at http://www.massmed.org/mmsindex2014


The Massachusetts Medical Society, with more than 24,000 physicians and student members, is dedicated to educating and advocating for the patients and physicians of Massachusetts. The Society, under the auspices of NEJM Group, publishes the New England Journal of Medicine, a leading global medical journal and web site, and NEJM Journal Watch alerts and publications covering 13 specialties. The Society is also a leader in continuing medical education for health care professionals throughout Massachusetts, conducting a variety of medical education programs for physicians and health care professionals. Founded in 1781, MMS is the oldest continuously operating medical society in the country.
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