KevinMD January 22, 2025
Providers must stop subsidizing payors’ profit margins. Consider UnitedHealthcare, which boasts a 6 percent margin on revenue (equivalent to $22 billion), while hospitals manage a slim 3 percent margin, and physician practices often struggle to stay financially viable. This imbalance underscores the urgent need for hospitals, health systems, and physicians to negotiate rates that not only cover their costs but also generate margins sufficient to offer competitive salaries and reinvest in technology and facilities.
The financial strain is evident—health systems lose more than $200,000 per employed physician annually. As a result, renegotiating payor contracts must become a top priority for 2025. Encouragingly, payors have shown a willingness to establish physician rates at the 70th percentile. Those who have secured such...
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