Physicians keep working more hours, but reimbursement does not keep up with productivity

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Doctors “are working more than ever before,” but revenues are not keeping up with gains in efficiency and productivity, according to the second quarter Physician Flash Report by Kaufman Hall.

The health care analytic firm published its latest evaluation of work relative value units (wRVUs) per full-time employee: 6,449 for physicians and 5,030 for advanced practice providers (APPs). The figures were up 12% and 11%, respectively, since the second quarter of 2023, according to the company’s report and accompanying news release.

“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, Kaufman Hall managing director and physician enterprise service line leader with Kaufman Hall. “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.”

Bates and the report did not mention specifically the One Big Beautiful Bill Act, the national financial plan approved by Congress and President Donald J. Trump. But for months, physician groups and health care organizations have warned of potential declines in insurance coverage due to cuts in Medicaid spending and the end of subsidies that help some patients pay for insurance through the Affordable Care Act Marketplaces.

There were changes in the 2021 Medicare Physician Fee Schedule that increased the way wRVUs are calculated for evaluation and management services. But those are no longer a factor when tallying the growth of provider units of work for physicians and APPs.

In the second quarter, net patient revenue per provider increased overall. But revenue per wRVU decreased slightly for surgical and hospital-based specialties, reflecting a shift toward more outpatient care, the report said.

Support staff levels, relative to the generation of wRVUs, have fallen since 2023 and that trend continues in the second quarter this year.

“This reflects the ongoing hiring and retention challenges in the health care workforce,” the news release said. A lack of adequate medical support staffing could be a barrier to growth, according to Kaufman Hall.

As for hospitals, data was mixed, with revenues and outpatient revenues increasing on a volume adjust basis. Operating room minutes were up, but so were bad debt and charity care. Bad debt rose at a greater rate than in previous months, which may reflect a shift in the number of people enrolled in public insurance programs like Medicaid, according to Kaufman Hall.

“Higher performing hospitals are nimbler on both the revenue and expense sides,” Kaufman Hall Managing Director and Analytics Group Leader Erik Swanson said in the news release. “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.”