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Two out of every five healthcare providers—just over 40%—in the United States are now non-physician, advanced practice providers.

Hospitals continue to lose significant money on employing physicians, and the original goals of care coordination and efficiency haven't materialized. Rising costs, declining reimbursement advantages, overutilization of low-margin services and administrative burdens are factors behind these unsustainable losses.

The critical link between patient access and loyalty means that even a modest increase in loyal patients can significantly boost revenue. Many health systems, however, capture less than half of a patient’s total healthcare spend due to poor access and scheduling inefficiencies.

In the fourth quarter of 2024, the median investment/subsidy per physician was $306,792, an increase of 5% compared to Q4 2023.

Trump picks his healthcare cabinet nominees, PBMs sue the FTC over its insulin case, and controlled substance telehealth flexibilities are extended yet again.

In the third quarter of this year, the median investment/subsidy per physician was $304,312—rising above $300,000 for the first time. Other expense metrics such as the total direct expense per provider FTE and labor as a percentage of total expenses increased.

VP Harris proposes that Medicare cover home health aides, four health systems launch a new company, and CMS releases its initial list for $2 generic drugs.

This week’s graphic dives into a growing challenge facing health systems’ physician enterprises.

Health systems are confronting a new normal of shrinking revenue and rising labor costs. In the second quarter of 2024, increased labor expenses accounted for 83.9% of total expenses. Additionally, the median investment/subsidy per provider rose 3% since Q2 2023.

Length of stay affects many elements of a hospital’s financial performance, and it is also a key driver of patient satisfaction. Effective management of length of stay requires consistent leadership, and hospitalists are the logical choice to fill that leadership role.

A judge orders a partial, preliminary injunction of the FTC’s noncompete ban, Sanford Health and Marshfield Clinic announce plans to combine, and CMS proposes a nearly 3% cut to Medicare physician pay for 2025.

Using the latest data forecast from Sg2, a Vizient company, the graphic below illustrates how the outpatient shift will continue to accelerate through 2034.