Kauffman Hall released its Physician Flash Report for Q4:25, which analyzes performance data from more than 200,000 employed physicians and advanced practice providers (APPs) across more than 100 specialties nationwide.
While the report highlights a surge in patient demand and physician productivity, these gains are being offset by intensifying financial pressures. Stagnating compensation growth, dwindling reimbursement rates and increased operating costs have left margins thin, forcing health systems to rely more heavily on APPs to remain profitable.
Here are five key takeaways:
Physician productivity is rising faster than compensation: Physician productivity, as measured by work relative value units (wRVUs) per full time employee (FTE) increased 9% since 2023, while physician compensation rose 6%
Patient demand is strong, but reimbursement per wRVU is falling: Net patient revenue rose 2%, yet revenue per wRVU declined 1%, reflecting lower reimbursement rates despite higher volumes
APPs now make up a large share of the workforce: APPs account for 40.7% of total provider FTEs, an increase of 1.6% from Q4:24 and up 3.1% in Q4:23
Operating costs continue to climb, especially labor: Total expenses per provider FTE rose 6% since 2023, with labor representing 84.4% of total costs, highlighting ongoing workforce cost pressures
Physician enterprises remain financially dependent on subsidies: Median subsidy per physician FTE reached $315,358, showing that most employed physician practices still operate at a financial loss without health system support
To read the full report, click here.
