Practice costs in diagnostic radiology.

Abstract

To report on practice costs and their variation. In 1996 and 1997, practices were surveyed, and data on costs and other operational characteristics were obtained from approximately 170 practices. Several components of practice costs (eg, physician-related costs, administrative and business costs) were calculated separately for different group types (eg, academic, private hospital-only), each on four bases: per full-time equivalent (FTE) radiologist, per relevant procedure, per relevant relative value unit (RVU), and as a percentage of revenue. Median total practice costs per FTE radiologist ranged from approximately $90,000 to $190,000, depending on group type. Per procedure, the median ranged from $9 to $21; and as a percentage of revenue, it ranged from 27% to 41%. Median technical costs were approximately $36 per technical RVU in private hospital-and-office groups. Within any category of group, for every cost category, there was substantial variation among groups. The sizable variation implies that means or medians should not be regarded as norms. Nonetheless, the data on 75th and 25th percentile costs can show a radiology group where savings and inadequate resources, respectively, are relatively likely to be found. Physician-related costs are best measured per FTE. Technical costs and administrative and business costs are best measured per RVU or for categories of groups defined by having similar percentages of nonhospital services.