Labor Remains Top Challenge for Hospitals and Health System Execs

Provider reimbursement decreasing despite record-high productivity

CHICAGO – November 2nd, 2023 – Hospitals’ financial performance declined slightly in September compared to the previous month, according to the latest National Hospital Flash Report from Kaufman Hall. Volume decreased across the board, but data indicate improvement in the overall financial picture compared to 2022.

The latest Physician Flash Report reveals the need for organizations to be more strategic about how they utilize and retain providers and support staff. The data show that physicians are operating at record-high levels of productivity compared to recent years but receiving less pay per unit of work.

The two reports draw on data from Syntellis Performance Solutions based on more than 1,300 hospitals and more than 200,000 providers. This quarter, the methodology of the Physician Flash Report has been updated to allow for better comparison against benchmarks. The change is from annualized quarterly figures to rolling 12-month figures, and differences in metrics over time expressed as the median change rather than change in median.

“While overall expenses seem to be softening as volume decreases, labor costs continue to be a challenge for hospitals and health systems. Hospitals and health systems need to identify long-term solutions that can address persistent workforce issues.”
– Erik Swanson, senior vice president of Data and Analytics, Kaufman Hall

“The ratio of support staff to providers has decreased as teams struggle to keep up with increasing productivity. Organizations need to examine their staffing mix and be strategic about how they deploy support staff to augment their most productive providers. In this competitive labor market, organizations should also focus on ways to retain support staff by establishing career paths and opportunities for advancement.”
– Matthew Bates, managing director and Physician Enterprise service line lead, Kaufman Hall

To speak with an expert, contact Tyler Williams,, 434-329-0940.

About Kaufman Hall

Kaufman Hall provides management consulting solutions to help society’s foundational institutions realize sustained success amid changing market conditions. Since 1985, Kaufman Hall has been a trusted advisor to boards and executive management teams, helping them incorporate proven methods, rigorous analytics, and industry-leading solutions into their strategic planning and financial management processes, with a focus on achieving their most challenging goals.

Kaufman Hall services use a rigorous, disciplined, and structured approach that is based on the principles of corporate finance. The breadth and integration of KaufmanHall advisory services are unparalleled, encompassing strategy; financial and capital planning; performance improvement; treasury and capital markets management; mergers, acquisitions, partnerships, and joint ventures; and real estate.

Kaufman Hall companies include Claro Healthcare and Gist Healthcare.