Make more money by making your doctors more productive, MGMA expert says

As operating costs outpace revenue, medical groups that want to protect their margins should make physician productivity their first strategic priority, a longtime Medical Group Management Association (MGMA) data expert said.

Improving efficiency ranks a close second, followed by tightening business operations so practices collect what they have already earned. Together, those strategies help explain why some medical groups thrive while others in similar markets lose money.

“So, restating these in simple terms: Increase productivity, you get more bang for the buck. We’ve heard that. You need to be more efficient, same bang for fewer bucks. You can improve your business operations, and that gets you more bucks for the bang,” said David N. Gans, M.S.H.A., FACMPE, an MGMA retired senior fellow.

Gans presented “Best Practices to Improve Productivity and Profits” on Sept. 27 at the MGMA 2026 Annual Conference in San Antonio, which he noted is the organization’s 100th annual conference. He joined MGMA as a student intern in 1980 and worked there for 45 years.

Drawing on MGMA DataDive benchmarking data, Gans compared physician-owned multispecialty groups with those owned by hospitals and health systems. He focused on strategy, the “what and the why” that executives decide, rather than the tactics managers use to carry it out.

Why are margins shrinking?

Gans opened with figures MGMA practice polls from starting in June 2026. A full 84% of medical groups reported higher operating costs than in 2025. The following week, a poll found only 47% reported higher revenue, while 36% reported a decrease. Gans cited supply chain problems, tariffs and transportation costs as possible drivers.

Fifteen years of MGMA data show revenue and expenses moving largely in parallel until the COVID-19 pandemic, followed by “substantial disruption,” Gans said. In the most recent year, expenses rose faster than revenue in both physician-owned and hospital-owned groups.

What makes physicians more productive?

MGMA measures physician output in work relative value units (wRVUs), a component of Medicare’s physician payment system that is calculated the same way regardless of who owns a practice.

In physician-owned practices, primary care physicians in the top quartile produced more than 7,585 wRVUs, while those in the bottom quartile produced fewer than 4,165, according to MGMA’s 2026 DataDive Provider Compensation and Productivity data. Physicians with more wRVUs also bring in more collections.

Gans cited three drivers of productivity. The first is compensation tied to production.

“But if you incentivize, you get what you incentivize. So if you’re incentivizing production, what do you get? More production, and the data substantiate this,” Gans said.

“If you look at your own organization, how are you incentivizing the production of your doctors? Do you have a compensation system that rewards those doctors who are working the hardest?” he said. “Because if they're working harder, what happens to the bottom line in the practice? Collections go up, bottom line goes up.”

The second is support from advanced practice providers (APPs), such as nurse practitioners and physician assistants [LINK: related Medical Economics APP coverage]. Physicians with APP support produce more wRVUs. When APPs work to the full extent of their licenses, seeing less complex patients or handling pre- and postoperative visits in surgical practices, physicians can make better use of their time, he said.

“The most critical element for any physician is time,” Gans said.

The third is experience. For doctors in physician- or health-system owned practices, productivity tends to be strongest at midcareer, though primary care physicians’ cognitive skills continue to develop over time. Gans said practices need a recruitment strategy as physicians begin to age out.

How do the most profitable groups differ?

Median total medical revenue per full-time equivalent (FTE) physician was $1.46 million in physician-owned multispecialty groups and $1.02 in hospital-owned groups, according to MGMA’s 2025 DataDive Financials and Operations data. Operating costs consumed 63.4% of revenue in physician-owned groups and 74.9% in hospital-owned groups. The physician-owned figures come from a sample of 23 to 25 groups, while hospital figures come from a pool of 96 to 133 organizations.

Median hospital-owned groups lost $168,527 per FTE physician after provider compensation, excluding financial support, while physician-owned groups essentially broke even. Gans said health systems are paid differently, absorb some expenses at the system level and use a different accounting approach, so those losses don’t necessarily mean the practices are failing or that hospital-employed physicians work less or are less productive.

The most profitable quarter of hospital-owned groups, however, is “not that different from a private practice in performance,” he said. Those groups generated median revenue of $1,690,230 per FTE physician, more than double the $773,567 in the bottom quartile. They paid physicians more, at $469,441 vs. $359,253, and still earned net income of $291,294 per physician. Their operating costs equaled 48.3% of revenue, compared with 126.2% in the bottom quartile.

Top-quartile groups also posted nearly double the wRVU production of the bottom quartile. They had the most APPs, close to 0.8 per physician, and more support staff. They spent more on staff and space, but revenue grew faster than those costs, Gans said.

“So, it’s not necessarily having more. It’s the right people doing the right things, which generally says that's going to increase our productivity, increase revenue,” he said. There is a lesson for primary care: “Do you have sufficient examination rooms per doctor? So, with the increased support staff, the doctor and advanced practice providers can be the most efficient, moving patient to patient, without having to wait for rooms to be cleaned, prepared, and the next patient roomed.”

Are you collecting what you earned?

Once the work is done, profit depends on getting paid. MGMA tracks the adjusted fee-for-service (FFS) collection rate, the share of collectible charges a practice actually collects after contractual adjustments. The median was 98.72% for physician-owned groups and 97.81% for hospital-owned groups. That gap of just under 1 percentage point works out to roughly $10,000 in lost collections for every $1 million billed, Gans said.

Accounts receivable (A/R) also become harder to collect as they age. Hospital-owned groups carry older A/R, which Gans tied in part to centralized billing that tends to focus on higher-value hospital claims.

Physician-owned groups also have more commercial and Medicaid business, which typically pays more slowly than Medicare, yet they still collect more. “They’re doing it better,” he said.

One of Gans’ slides summed it up: A/R “is not just billing. It is contracting, coding, follow-up, patient collections and denial prevention.” Gans recommended strong collection policies, up-front payment, prior authorization and good payer contracting [LINK: Medical Economics revenue cycle/billing topic page].

Where should practice leaders start?

Artificial intelligence (AI) offers substantial efficiency gains, starting in the business office and extending to scribing and coding support for physicians, though “we’re just getting started,” Gans said.

Still, Gans said long-term survival comes from “being productive and efficient with business operations that reliably convert work to cash,” and productivity should come first.

“If you have enhanced productivity and have more production, it covers a lot of other things like higher costs, or even some inefficiencies in collections. But more profit, more productivity should be an executive’s primary strategic focus,” he said.

What did attendees share?

During the audience questions and answers, attendees focused on getting the most out of APPs and exam rooms.

One attendee said surgical APPs don’t bill for pre- and postoperative visits because those fall under global surgical payments. Gans said that is still a good use of APPs because it frees surgeons for surgery. The same attendee’s practice calculated each exam room’s hourly revenue potential and redesigned patient flow around it. Gans suggested running similar numbers by clinician to find top producers who could mentor colleagues.

Another practice has its APP follow up on physicians’ treatment plans and bill “incident to” the physician, which Gans noted is paid at the physician’s rate.

Several attendees said patients accept APPs more readily when expectations are set early. Methods may be relatively low-tech, such as posting signs in exam rooms explaining the team approach, or offering an earlier appointment with an APP instead of a later one with a physician. Others noted that supervision rules vary by state and urged leaders to weigh quality alongside productivity.

“It again comes back to not only having more a certain type of specialty, but having those individuals doing the right things with the right supervision, because that's critical,” he said.