Labor makes up 84.6% of total expense in the median employed physician group, according to Kaufman Hall's Q1 2026 Physician Flash Report. Provider pay and benefits take 71.0% of total expense, support staff take 13.6%, and non-labor costs take the remaining 15.4%.
The report draws on Strata Decision Technology data for more than 200,000 employed physicians and advanced practice providers (APPs) across more than 100 specialties. The groups range from small practices to large academic groups. The figures below are medians, so the lines in each table do not add up exactly.
How the expense dollar splits
Kaufman Hall tracks three shares of total expense. Provider labor is salary and benefits for physicians and APPs. Support staff labor covers front office, back office, and centralized support. Non-labor expense is everything else, such as supplies, rent, and software.
| Share of total expense (median) | Q1 2024 | Q1 2025 | Q1 2026 |
|---|---|---|---|
| All labor | 83.7% | 84.0% | 84.6% |
| Provider labor | 69.3% | 70.3% | 71.0% |
| Support staff labor | 14.4% | 13.6% | 13.6% |
| Non-labor | 16.3% | 16.0% | 15.4% |
Source: Kaufman Hall, Physician Flash Report, Q1 2026 Metrics, using Strata Decision Technology data.
The labor share rose 0.9 points in two years. Provider labor accounts for all of that rise and more, since it gained 1.7 points while support staff labor fell 0.8 points. Support staffing per unit of provider output also fell, from 3.13 support FTEs per 10,000 provider work RVUs in Q1 2024 to 2.97 in Q1 2026.
Cost per provider is growing faster than revenue
Median total direct expense per provider FTE reached $673,074 in Q1 2026, Kaufman Hall reports. That is up from $655,050 in Q1 2025 and $637,917 in Q1 2024. By simple division, expense grew 2.8% in the past year and 5.5% in two years.
Median net patient revenue per provider FTE reached $414,108 in the same quarter. It was $406,654 in Q1 2025 and $400,794 in Q1 2024, which works out to growth of 1.8% in one year and 3.3% in two.
| Median per provider FTE | Q1 2024 | Q1 2025 | Q1 2026 |
|---|---|---|---|
| Net patient revenue | $400,794 | $406,654 | $414,108 |
| Total direct expense | $637,917 | $655,050 | $673,074 |
| Investment or subsidy | $236,304 | $233,677 | $237,041 |
Source: Kaufman Hall, Physician Flash Report, Q1 2026 Metrics. Subsidy is net patient service revenue minus total expense, per the report's definition.
The median subsidy per provider FTE was $237,041 in Q1 2026, up 1.4% from a year earlier. The median subsidy per physician FTE was $315,688. The sample is employed groups, so the subsidy is the amount a health system or parent organization puts in. An independent practice has no parent to cover that gap.
The labor share by quarter
Kaufman Hall publishes six quarters of data. The median labor share climbed in every quarter after Q1 2025, and median expense per provider FTE climbed with it.
| Quarter | Labor share of expense | Provider wRVUs per FTE |
|---|---|---|
| Q1 2025 | 84.0% | 5,011 |
| Q2 2025 | 84.1% | 5,058 |
| Q3 2025 | 84.3% | 5,090 |
| Q4 2025 | 84.4% | 5,119 |
| Q1 2026 | 84.6% | 5,146 |
Source: Kaufman Hall, Physician Flash Report, Q1 2026 Metrics. Medians for each quarter.
Labor share gained 0.6 points over four quarters, and provider wRVUs per FTE gained 135 over the same period. Median total expense per provider FTE was $661,866 in Q3 2025 and $667,204 in Q4 2025 before reaching $673,074.
Productivity and pay per wRVU
Median provider wRVUs per FTE rose to 5,146 in Q1 2026, from 5,011 a year earlier and 4,888 in Q1 2024. That is growth of 2.7% in one year and 5.3% in two. Median physician wRVUs per FTE rose to 6,626, up from 6,349 and 6,173, or 4.4% and 7.3%.
Pay moved more slowly than output over the past year. Median physician compensation per FTE was $383,917 in Q1 2026, up 2.3% from $375,329. Median provider compensation per FTE was $317,510, also up 2.3% from $310,408. Both are 6.0% to 6.2% above their Q1 2024 levels, which were $361,628 for physicians and $299,452 for providers.
Median provider compensation per wRVU was $63 in Q1 2026, against median net patient revenue per wRVU of $77. Divided directly, pay equals 81.5% of revenue per wRVU. Revenue per wRVU rose 0.9% in a year, and pay per wRVU rose 0.8%.
APP share and support staffing
APPs made up a median 40.2% of provider FTEs in Q1 2026. The share was 39.4% in Q1 2025 and 36.5% in Q1 2024. Kaufman Hall notes that the APP share excludes hospital-based APPs.
Support staff expense was 13.6% of total expense in both Q1 2025 and Q1 2026. Support staff per 10,000 provider wRVUs was 2.98 in Q1 2025 and 2.97 in Q1 2026, a change of 0.01 FTE.
Support staff cost less than one-fifth as much as provider labor. At 13.6% against 71.0%, the ratio is 1 to 5.2. For a practice with $2,000,000 in annual expense, each point of expense share is $20,000.
How to use these medians in your own practice
Pull the same three shares from your general ledger for the last four quarters. Divide provider salary and benefits, support staff salary and benefits, and everything else by total expense. Compare each against 71.0%, 13.6%, and 15.4%.
Then divide total expense by provider FTEs and compare it with $673,074. Divide net collections by provider FTEs and compare that with $414,108. A practice that sits above the median on expense and below it on revenue has the pattern the report shows for the typical group over two years.
Kaufman Hall's data covers employed groups, which are larger than most independent practices. Treat the medians as a reference point, and check them against MGMA or AMA figures for your specialty and size before setting targets.
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