What You Should Know:
– A significant shift is underway in the U.S. healthcare workforce, with non-physician advanced practice providers (APPs) now constituting two out of every five healthcare providers (40.6%).
– This continued growth, highlighted in the latest quarterly Physician Flash Report from Kaufman Hall, a Vizient company, coincides with mounting financial pressures on physician practices and evolving operational dynamics in hospitals.
– Kaufman Hall’s National Hospital Flash Report draws on data from more than 1,300 hospitals from Strata Decision Technology, LLC. The Physician Flash Report draws on data based on more than 200,000 providers, also from Strata.
Advanced Practice Providers: An Expanding and Vital Role
Experts indicate that burgeoning demand in surgical and primary care is fueling the rise of these professionals, such as physician assistants and nurse practitioners. APPs typically enter the workforce more rapidly and with less extensive education and training requirements compared to physicians. Projections suggest that if this growth trajectory persists, the U.S. could see an equal split between non-physician clinicians and physicians in the provider practice workforce.
The increasing presence of APPs is reshaping the delivery of care. “Advanced practice providers like physician assistants and nurse practitioners play a vital and increasingly visible role in healthcare,” stated Matthew Bates, Managing Director and Physician Enterprise Service Line Leader with Kaufman Hall.
He emphasized the collaborative benefits: “When deployed correctly, advanced practice providers let physicians practice at the top of their license. They give doctors more time to focus on diagnosis and treatment, which can make physician practices more efficient and address other challenges, including physician burnout.” This integration is seen as key to enhancing efficiency and tackling issues like physician fatigue.
Physician Practices Face Escalating Financial Subsidies
However, the same report sounds a note of caution regarding the financial sustainability of physician practices. The investment, or subsidy, required from a practice to support a physician reached an average of $312,528 in the first quarter of 2025. This figure represents a substantial 6% increase from the previous year.
The concern is that the downstream revenue generated by physicians from their practice may not be sufficient to cover this significant and growing investment, placing further financial strain on these organizations.
Hospitals See March Volume Dip Amidst Rising Long-Term Expenses
Shifting to the hospital sector, U.S. hospitals and health systems experienced a decrease in daily patient volume in March 2025. According to Kaufman Hall’s National Hospital Flash Report, this decline is largely attributed to a reduction in seasonal flu and other respiratory illnesses compared to earlier months.
This trend in reduced volume contributed to lower overall costs for delivering hospital care in March compared to the preceding months of the quarter. Despite this short-term easing, hospital expenses have climbed when compared to the previous year, primarily driven by increases in supply and drug costs.
Key month-over-month volume indicators for March reflected this downturn:
- Discharges per calendar day fell by 5%.
- Equivalent patient days per calendar day decreased by 4%.
- Operating room minutes per calendar day also dropped by 4%.
- The average length of stay remained flat (0%).
“Advanced practice providers like physician assistants and nurse practitioners play a vital and increasingly visible role in healthcare,” said Matthew Bates, Managing Director and Physician Enterprise Service Line Leader with Kaufman Hall. “When deployed correctly, advanced practice providers let physicians practice at the top of their license. They give doctors more time to focus on diagnosis and treatment, which can make physician practices more efficient and address other challenges, including physician burnout.”
