Reimagining the Physician Enterprise: A Data-Driven Path to Access, Margin Improvement and Growth

Key Takeaways:

• New Premier data shows an increase in patient volumes and provider compensation levels for medical groups over the past 18 months, yet new patient growth has declined.
• Access delays, capacity and throughput issues, and operating expense increases are impacting medical group operating margins and enterprise growth.
• Healthcare organizations must pursue a data-driven, multi-faceted approach to unlock return on investment across their physician enterprises.

Healthcare providers across the care continuum face a challenging reality. Persistent headwinds are reshaping the market and placing pressure on health systems, medical groups and ambulatory networks to deliver care more efficiently, sustainably and with greater patient focus.

Amid this landscape, optimizing physician enterprise performance has become imperative – to protect operating margins, drive growth and support long-term competitive advantage.

Premier Data Paints the National Picture: Access, Capacity and Retention

New Premier data shows, on average, a 6 percent increase in medical group patient volumes over the past 18 months – yet new patient growth has declined 6 percent, indicating potential access bottlenecks. Provider compensation levels have increased 8 percent, largely driven by inflation, misaligned models disconnected from reimbursement and organizational economics. This and other operating expense increases have resulted in a 13 percent decline in operating margin per provider.

Capacity and throughput issues are also widespread across ambulatory settings, while clinician shortages and turnover contribute to both direct costs and strategic risk. For example, Premier data shows physician turnover across top specialties can cost a system, on average, over $1.2 million per physician. Access delays are equally detrimental: new patient appointment wait times often exceed 30–40 days, with data indicating a 53 percent increase in lead times since 2020 across all specialties.

Collectively, these factors create significant barriers for many medical groups, which are failing to capture new markets that can fuel enterprise growth.

Case-in-Point: One Medical Group’s Network Performance

As a real-world illustration of overarching market challenges, one physician enterprise with $3.3 billion in annual revenue increased its provider capacity by 7 percent over 24 months, yet patient encounters remained relatively flat. At the same time, operating margin per provider dropped by nearly 13 percent.

Source: Physician Group Data (March 2023-April 2024) generated with Premier's PIVOT platform

The disconnect between available provider time and measurable patient activity points to inefficiencies in scheduling, access and utilization. Additionally, the percentage of new patients seen across specialties fell below best-practice benchmarks—fueling longer wait times exceeding 30 days for all specialties, with primary care and medical specialty physicians averaging 40 days or more.

Source: Physician Group Data (March 2023-April 2024) generated with Premier's PIVOT platform

The data and trends reveal a fundamental truth: success requires not just more capacity, but network strategies that create a community of providers aligned with organizational goals on access, retention and optimal care delivery.

Market Forces Contribute to Strategic and Operational Challenges that Strain Access to Care

Across the healthcare landscape, financial and operational challenges are mounting:

• Costs are rising while reimbursement contraction persists – margins continue to erode, forcing healthcare organizations to rethink their operating models. Physician enterprises are under pressure, with policy shifts, uncertainty and financial strain highlighting the need to optimize provider performance and alignment.
• Patient expectations are higher than ever – long wait times and complex scheduling threaten loyalty as consumers increasingly demand convenience, transparency and quality from their healthcare providers. This, in turn, is intensifying competition among providers to win the business of patients who are shopping around for the best experience and greatest value.
• Market disruptors are reshaping competition – private equity and nontraditional players are shifting dynamics and forcing health systems and medical groups to adapt.

What Success Looks Like: Leveraging Data, Technology and Advisory Expertise

Patients today expect healthcare to mirror the convenience of other industries. Long wait times, limited scheduling options, clinician turnover and inefficient processes can drive them elsewhere to seek care.

To address these challenges, medical groups and ambulatory networks need comprehensive, scalable solutions that create alignment and address strategic, operational and financial issues. Enter advanced technology, which offers a powerful means for organizations to see and act on opportunities in real time.

Premier’s Physician Enterprise Solution offerings provide a comprehensive approach to accelerate medical group performance, system patient acquisition and patient retention. Premier’s offerings are powered by its Performance Insights Value Optimization Tool (PIVOT), which aggregates data from over 72,000 physicians and Advanced Practice Providers (APPs) and nearly 12,000 practices nationwide. Organizations can use this data to help identify and quantify actionable opportunities while documenting and tracking progress toward closing the gap before they erode access and margins.

Hear from Doug Ricker, Entity Financial Officer at Texas Health Physicians Group, who leveraged PIVOT to improve provider productivity, leading to $1 million in gross margin improvement for the group in 2024:

And while technology is critical, advisory expertise helps translate insights into measurable results. Premier’s Physician Enterprise Advisory Services partners with providers to co-design and implement strategies tailored to their unique needs. From performance management to patient retention and provider compensation models, these experts help ensure that investments deliver maximum value.

Listen to Ricker discuss the partnership approach with the Premier team:

Putting It All Together

Healthcare organizations must pursue a multi-faceted approach to unlock return on investment across their physician enterprises. A successful strategy demands:

• Smart Growth, Access and Retention – designing initiatives that strengthen competitive positioning while delivering superior patient experiences.
• Performance Management – optimizing revenue, expense drivers and clinician performance against industry benchmarks.
• Provider Alignment and Incentives – aligning compensation models with strategic goals to accelerate performance and improve outcomes.
• Contemporary Care Models – redesigning operations and care delivery as care continues to shift toward ambulatory and home settings.
• Network Health and Integrity – building networks aligned with mission and strategy to ensure consistent, high-quality care delivery.

Creating a robust physician enterprise operating model is not a sprint – it’s a journey. But the rewards are significant: revenue growth, margin protection and positioning providers for long-term success.

Organizations that embrace this transformation will do more than survive. They will thrive as the provider of choice in their communities.

Connect with Premier’s Physician Enterprise Advisory team to learn how you can optimize and scale your medical group with a data-powered, results-driven approach.