Benchmarking Your Practice Against MGMA-Style Data

Benchmark data is one of the most requested and most misused inputs in medical practice management. The Medical Group Management Association (MGMA) publishes annual survey data on compensation, overhead, staffing, and productivity that is used industry-wide, and similar data sets exist from other publishers. Used well, benchmarks give a physician-owner a reference point for where their practice sits relative to peers. Used poorly, benchmarks distract from the specific questions the practice should be answering about itself.

For a small-group practice in Idaho or Utah without a $2,000 annual MGMA subscription, the question is what to benchmark against, how to use the data responsibly, and what to do when a benchmark gap shows up. This piece covers what these data sets actually measure, the ratios worth benchmarking first, why regional medians are not always the right target, alternative data sources, and how to act on a gap.

What MGMA and Similar Data Sets Actually Measure

The MGMA cost and revenue survey, along with equivalents from AAPC, ADA, and other specialty associations, collects operating data from thousands of medical practices annually. The data covers physician compensation, staff compensation, overhead ratios, productivity measures (wRVU per FTE, encounters per FTE), payer mix, and revenue cycle metrics.

These are self-reported figures from participating practices. The samples are meaningful but not statistically representative in the strict sense. Rural practices, small practices, and independent practices are often underrepresented relative to their share of the U.S. medical marketplace, which matters when a rural Idaho or Utah practice is comparing itself to the median.

The takeaway: benchmarks are directional, not definitional. A practice at the 30th percentile on overhead is not necessarily failing, and a practice at the 70th percentile is not necessarily thriving. Context, always.

The Ratios Worth Benchmarking First

For most small and mid-sized practices, five ratios are worth checking against peer data:

• Overhead as a percentage of net collections
• Non-provider staff FTE per provider FTE
• Provider compensation per wRVU
• Encounters or wRVU per provider FTE
• Payer mix relative to specialty and region

These five together answer most of the “how does the practice compare?” question. Adding a dozen more ratios does not usually add information; it adds noise.

Why Regional Median May Not Be Your Right Target

The regional median is a starting point, not a target. A practice’s right target depends on:

Specialty. An orthopedic practice’s overhead percentage will run materially lower than a primary care practice’s, and comparing them across specialties is misleading.

Market. A rural practice in eastern Idaho does not face the same wage inflation, real estate cost, or payer mix as an urban Boise or Salt Lake practice. Regional medians blur these differences.

Practice model. A practice with a physical therapy line, in-house lab, or dispensing pharmacy behaves differently from a pure office visit practice, and benchmark data built on averages washes out those differences.

The right target is often “top quartile among practices similar to this one on the three dimensions that matter most,” which is a harder question than “match the regional median” and a more useful one.

Alternative Free and Low-Cost Data Sources

Not every practice can justify an MGMA subscription. Alternatives:

• Specialty association publications (AAOS, AAP, AAFP, ADA) publish periodic aggregate figures for their specialties, sometimes free to members
• CMS and HHS publish substantial public data on utilization and compensation patterns (Physician Compare, Medicare Payment Data)
• State medical societies sometimes publish region-specific data
• A good CPA firm with medical practice clients has aggregate insights across its client base that are not published but can inform conversations

The public data sets take more work to interpret than a packaged survey but often provide better local relevance for a rural or small-market practice.

How to Act on a Benchmark Gap

When a benchmark comparison shows a gap, the useful response is not “match the benchmark.” It is to ask three questions:

Is the gap real? A ratio that differs from the benchmark by 1 to 3 percentage points is inside the noise of survey data. A ratio that differs by 5 to 10 percentage points is a real signal.

Is the gap explainable? Every practice has structural reasons its ratios differ from peers (specialty mix, market, model). Some of those reasons are strategic choices; others are unexamined habits.

Is the gap fixable in a way that improves the practice, not just the ratio? Cutting staff to match a benchmark can lower overhead and lower revenue at the same time. Chasing a ratio is not the same as improving the business.

Cooper Norman’s healthcare accounting team builds benchmark-informed practice reviews for physician-owned groups across Idaho and Utah. To place your practice against the right peers, talk with a Cooper Norman advisor.