Physicians and advanced practice providers are logging more work than ever, but rising productivity isn’t translating into higher reimbursement, according to Kaufman Hall’s “Physician Flash Report,” published Aug. 11.
Productivity levels, measured in work relative value units per full-time employee, reached 6,449 for physicians and 5,030 for advanced practice providers in the second quarter of 2025. That marks a 12% increase for physicians and an 11% increase for APPs year over year.
“Increases in productivity metrics, coupled with higher compensation and expenses, reflect a reality that physicians and advanced practice providers are working more than ever before,” Matthew Bates, managing director and physician enterprise service line leader at Kaufman Hall, said in a news release. “Revenue has increased because physicians and providers are working more, but the data also show that reimbursement is not keeping pace. In the coming months if more patients lose insurance coverage, this trend will likely get worse.”
Kaufman Hall analysts said changes to the Medicare physician fee schedule that took effect in 2021 — which initially increased wRVU totals for evaluation and management services — no longer account for the recent growth in productivity. The increases now reflect rising workloads rather than changes in how work is measured.
The report also highlighted a troubling staffing trend.
Medical support staff levels continue to fall relative to wRVU generation, a pattern Kaufman Hall has tracked since 2023. The firm cautioned that ongoing workforce challenges could become a barrier to future growth if left unaddressed.
Meanwhile, hospital financial performance improved in June, according to Kaufman Hall’s latest “National Hospital Flash Report.” Outpatient revenue and operating room minutes increased, contributing to stronger performance compared to the previous month.
“Higher performing hospitals are nimbler on both the revenue and expense sides,” said Erik Swanson, managing director and data and analytics group leader at Kaufman Hall. “They may be expanding their outpatient footprint, diversifying services, or managing expenses like purchased services by centralizing some functions. They are also more likely to have value-based care or bundled care arrangements in place.”
Still, not all signs were positive: hospital bad debt and charity care increased in June, with bad debt rising faster than in previous months. Analysts pointed to changes in public insurance enrollment, such as Medicaid redeterminations, as a likely driver.
