High labor costs hitting hospitals as physicians generate less revenue

Medical Economics November 12, 2024
Todd Shryock

Key Takeaways

• Labor costs, especially from physicians, account for 84% of medical groups’ expenses, with subsidies per physician exceeding $300,000.
• Hospital financial performance is stable, but inpatient revenue and lengths of stay are increasing, indicating more high-acuity patient care.
• Outpatient revenue has slightly declined, highlighting a shift towards more intensive inpatient care.
• Current physician employment models are unsustainable, necessitating operational adjustments to align with the healthcare environment.

Revenue is increasing but physicians and providers are working more while generating less money.

Hospital and health systems’ finances have remained stable in the last 12 months, but high labor costs continue to challenge the bottom line, according to the latest Kaufman Hall National Hospital Flash Report, with data through September,...

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