Flat reimbursement, rising wages and persistent turnover are forcing physician practices to rethink how they staff, support and sustain their workforce.
In today’s marketplace, staffing in medical groups is like walking a tightrope for practice owners and managers, said Andy Swanson, chief revenue officer, Medical Group Management Association (MGMA). “Recruiting is challenging, particularly for hard-to-find clinical roles, niche specialties, and specialized technical positions such as anesthesiology assistants or nurse specialists. Retention is an even greater concern today than ever before.”
Non-clinical staff face their own pressures, grappling with outdated technology, inefficient processes, and systems that are not patient-friendly. Balancing old ways of working with new expectations from clinicians and patients has become increasingly unsustainable.
Indeed, physician practices and medical groups are facing a staffing environment that leaders describe as increasingly unsustainable. Flat or declining reimbursement, rising operating costs, and persistent turnover in key roles are combining to create some of the toughest workforce pressures the sector has seen in years, according to leaders from the American Medical Group Association (AMGA).
At a high level, the core issue is simple math, says Mike Coppola, MBA, former chief operating officer at AMGA. “Reimbursement is flat to declining and expenses are increasing, so it’s a financial model that’s not sustainable,” he explained. Wage inflation – especially acute over the last several years – has placed even more strain on medical groups already operating with tight margins. And unlike other expense categories, wages rarely move downward.
The impact shows up most clearly in recruiting and retaining medical assistants (MAs) and front-desk staff. These positions, which sit on the lower end of the compensation scale, experience some of the highest turnover in medical groups. Competing with retail or big-box employers has become increasingly difficult when those settings offer comparable pay with less stress and fewer administrative burdens.
RNs fare slightly better on the pay scale but face similar challenges. “Those are the two areas where we see some of the biggest challenges,” Coppola said – roles that are essential to maintaining clinic flow, supporting providers, and keeping patient access open.
Matthew Wells, Ph.D., senior director of consulting at AMGA, points out that while reimbursement stagnates, provider salaries continue to rise – up 27% since 2017 for physicians in medical specialties. “They’re not going to go down anytime soon,” he noted. With operating expenses already squeezed, medical groups are being forced to pursue efficiency wherever possible.
What the numbers tell us
The Association for Advancing Physician and Provider Recruitment’s (AAPPR) 2025 Benchmarking Report revealed the median organization conducted 96 provider searches in 2024, highlighting sustained demand that often exceeds internal recruiting capacity. “When leaders don’t have the time or resources to focus on sourcing, interviewing, and onboarding, searches take longer and candidate experience suffers,” said AAPPR CEO Carey Goryl.
Difficulty varies by location and specialty, but practices commonly struggle across both clinical and non-clinical roles, including medical assistants, front-office staff, advanced practice providers, and physicians. “From an AAPPR perspective, extended recruiting timelines – including a 121 days-to-fill the typical physician search when using an in-house recruiter – reflect ongoing supply constraints, workforce age trends in certain specialties, competition, and changing expectations around workload and work-life balance all play a role,” Goryl said.
MGMA tracks medical practice costs through the association’s financial operations data, and the latest numbers tell an interesting story, said the MGMA’s Swanson. “Overall, practices are still managing to keep margins sustainable, but it’s getting harder.” Before the pandemic, many private groups boosted their support staff, including advanced practice providers (APP), to about 3.8–4.7 staff per physician, depending on specialty. The idea was simple: let doctors focus on high-level care while the rest of the team handled everything else.
Fast forward to 2024, and those staffing levels have dropped by roughly two full-time positions across the board. “Why? Rising labor costs and shrinking reimbursement rates make it nearly impossible to maintain those extra hands,” Swanson said. Now, physicians are back to doing tasks that should fall to support staff, which only adds to frustration and burnout. “Unless practices invest in technology to fill the gap, which comes with its own price tag, the burden will stay on physicians.”
Vacancy rates depend on the market, Swanson said. In some areas – mainly suburban communities and other “desirable” locations – staffing has stabilized, and supply generally meets demand. But in many parts of the country, especially rural regions, staffing remains a full-blown crisis.
“Take a two-doctor clinic in rural Tennessee as an example: if one physician retires unexpectedly due to health issues and the other is just two years from retirement, the entire practice, and the community it serves, faces an immediate emergency,” he said. “That clinic has been trying to recruit one or two replacements for three years without success. How likely is it they’ll find a qualified specialist in time, let alone prepare for the second retirement?”
Unfortunately, Swanson noted this scenario is common across wide swaths of the country. When practices can’t fill these gaps, they’re forced to cut services, leaving patients and families to either go without care or travel long distances to get it.
Tradeoffs that physician groups don’t want to make
Workforce pressure is driving difficult decisions among physician groups. The staff support category – salaries and benefits for staff and providers – represents roughly 80% of a medical group’s operating expense. “It’s a people industry,” Coppola said. With limited room to cut elsewhere, practices are left with few levers: reduce staff, restructure roles, or invest in technology that automates certain tasks.
Access is already feeling the effects. Many groups report longer wait times as shortages limit how many patients a clinic can move through each day. Some organizations are considering consolidation – reducing the number of standalone sites or bringing small practices together under one roof to create economies of scale. While these moves may improve efficiency, they can also reduce geographic access for patients, creating another trade-off for leadership to manage.
Inside practices, the burden is increasingly shifting to those who remain. Wells notes that responsibilities that once belonged to multiple roles are now being combined out of necessity. “If they say, ‘We can’t get a medical assistant,’ they’re just expecting the RN to cover that and do their RN duties as well,” Coppola said. The result: employees stretched thin, dissatisfaction rising, and turnover accelerating as staff choose less demanding work elsewhere.
Leaders are being pushed to meet higher expectations with fewer people and at a higher cost, said Goryl. In many environments, there isn’t “new money” flowing into physician practices to offset increased labor costs, so sustainability comes down to how well practices operate.
That reality is driving tradeoffs that include delaying hires, redistributing work, redesigning roles, cross-training and leaning more heavily on operational efficiency. “The practices that are adapting best are those that treat workforce challenges as a systems issue, not just a hiring issue, by improving workflows, reducing friction, strengthening onboarding and building healthy workplace cultures that support retention,” Goryl said. “Simply asking fewer people to do more is not a long-term solution; it increases burnout and turnover, which ultimately costs more.”
Why staff are leaving
As staffing shortages continue to strain physician practices, leaders say the reasons employees are walking out the door are both practical and cultural.
“We are not hearing new or different challenges than in recent years,” Swanson said. Wage inflation in other industries continues to put pressure on healthcare, where revenues remain flat or even decline. Recent Medicare reimbursement cuts, with private payers likely to follow, make this problem unique: no other industry faces such limited ability to increase revenue while costs rise.
Staff wages have kept pace with inflation, but physician and APP salaries have not. This creates short-term staffing adjustments, but the long-term outlook is a systemic concern that medical groups cannot ignore. “We need government partners to revisit reimbursement cuts and take a holistic view of the industry’s viability. If revenues keep shrinking while costs climb, the situation will become unsustainable.”
According to AMGA experts, one of the most common frustrations is being asked to perform work outside an employee’s training or licensure – often because vacancies elsewhere in the practice leave gaps that must be filled.
For example, registered nurses frequently find themselves completing tasks that fall squarely within a medical assistant’s role. “That’s not the best use of their license and their training,” said Coppola. Faced with spending their day on duties that don’t match their skill level, many RNs choose to seek work environments where they can practice to the full extent of their training.
Front desk positions, already among the lowest paid in physician practices, are prone to even faster turnover. Staff often leave for an increase as small as 50 cents to a dollar per hour – especially when retail and big-box employers offer similar pay with less pressure. “The pay isn’t commensurate with what the ask is,” Coppola said, noting the heavy administrative load and constant patient interaction required at check-in.
Workplace culture plays a significant role as well. Staff may tire of challenging physician personalities or feel they are no longer part of a mission-driven environment. “Do they really feel like they’re providing healthcare?” asked Dr. Wells. “When they don’t, we really see turnover increase.”
As for retention, both leaders stressed that money alone won’t solve the problem. Retention bonuses may offer a temporary boost but rarely deliver lasting impact. Instead, successful practices focus on engagement – regular rounding with staff, early check-ins with new hires, and consistent recognition. “Because the cost to recruit and replace is so high, doubling down on retention is critically important,” Coppola said.
Focal points
So, what can be done? Goryl said the most successful retention strategies are practical and repeatable:
- Build a healthy workplace culture on purpose: consistent communication, visible leadership, clear expectations and recognition.
- Give frontline staff influence over the decisions that shape their day (scheduling templates, patient flow, rooming standards, handoffs).
- Protect staffing levels so roles stay humane. Chronic understaffing becomes a retention killer because it guarantees burnout.
- Offer schedule flexibility where possible, because flexibility is now a major differentiator for candidates and current staff.
- Invest in tools and processes that reduce friction (documentation workflows, better recruiting and onboarding systems). AAPPR’s 2025 Report shows many organizations rate their recruiting tech as “average” or below, which is an opportunity area.
- Address toxic behavior quickly: retaining high performers often requires helping misaligned employees exit.
“The throughline: practices retain talent when they make it easier for staff to do great work for patients, with the support and resources that prevent constant ‘catch-up mode,’” Goryl said.
MGMA members consistently tell the association that when practices have the resources to invest, they focus on technology that speeds up workflows, reduces reliance on hard-to-fill roles, and lightens the load on clinical staff. “Every tech investment is scrutinized, and the ones that succeed share two traits,” Swanson said. One, they’re easy to implement. And two, they deliver a clear return on investment, which is better than sticking with the status quo or absorbing rising labor costs.
But when budgets are tight, practices turn to culture. “I say ‘best place to work’ in quotes because the most successful groups define what that means for them, not for the practice down the street,” Swanson said. A surgical group might prize autonomy, efficiency, and high standards, so they recruit people who value those things. A pediatrics practice, on the other hand, might emphasize relationship-building, hands-on care, and a “can-do” attitude. Both approaches work because they align with the group’s core values.
“Culture doesn’t cost money, but it does take time and intentional effort. And when done well, it not only improves retention but also keeps staff engaged and focused on delivering better patient care.”
Swanson recommends physician practice leaders focus on the environment inside the practice. This is entirely controllable and within each location’s purview. “Agreeing on cultural norms for handling operational hurdles, challenging patients, and stress is essential, and every group approaches these issues differently,” he said. With aligned expectations, all staff, clinical and non-clinical, can feel a part of the team and critical to their sense of contribution to the important work of the practice. This will serve groups well as they take on new cost pressures, rising reliance on technology as a partner in their work, and staff outages as they experience those as well.
Building a stronger workforce pipeline
Over the next decade, the U.S. is projected to face a shortage of 86,000 physicians. “As more baby boomers require care, demand will rise for doctors, nurses, physician assistants, and other clinical roles,” Swanson said. Clinical “extenders” will be especially important in areas with significant provider shortages, helping triage and deliver care where physicians are scarce.
Operational roles will also remain essential, Swanson continued, though the expectations are shifting. Success now requires stronger skills in process optimization, technology integration, culture building, and team leadership, alongside the foundational practice-management expertise needed to run specialized medical groups on increasingly thin margins.
As workforce shortages continue to challenge physician practices, AMGA leaders say medical groups must rethink how they recruit, develop, and support their staff if they want long-term stability. While there is no single solution, several strategies are emerging as best practices across high-performing organizations.
One of the clearest opportunities lies in diversifying talent pipelines. Dr. Wells emphasized that practices can no longer rely solely on traditional recruitment sources for medical assistants (MAs) and other frontline roles. “Groups need to diversify where they’re looking for talent,” he said. Internships, externships, and partnerships with local schools can help build a more reliable flow of candidates. Several AMGA members are also investing in in-house education programs to upskill staff and create clearer development pathways.
Engagement remains another essential component. Instead of treating MA teams as separate or subordinate, Wells said practices need to foster a sense of shared mission and teamwork. When staff feel supported by providers and leadership, they are more likely to stay and grow within the organization.
Career development is especially important for front-desk employees – one of the hardest groups to retain. Coppola noted that healthcare historically has not provided robust advancement tracks for these roles. Creating structured career paths, with defined skills and expectations, can help reduce turnover while strengthening internal leadership.
Dr. Wells and Coppola also stressed the importance of understanding the day-to-day pressures staff face. Being mindful of when and how employees are approached – whether by vendors or other departments – can reduce overwhelm and contribute to a healthier work environment.
Ultimately, strengthening the workforce pipeline requires new recruitment strategies, intentional development, and a supportive practice culture. As Coppola reminded, “Just being aware of some of the things that are happening in a practice … it can be a little overwhelming.”
Meeting patient demand a “persistent challenge”
Physician practices aren’t closing their doors to patients, but access remains strained. “We’re not hearing about groups reducing hours or closing panels to new patients, but longer wait times, especially in underserved communities and certain specialties, remain a persistent challenge,” said Swanson.
Missed appointments are a major factor. In 2024, single-specialty practices reported that 20% of patients canceled appointments, and fewer than one-third rescheduled within 30 days. Each open slot represents both a lost opportunity for patients seeking care and lost revenue for providers.
To address the issue, many practices are adopting smarter scheduling strategies, including rapid rescheduling technologies that help refill openings quickly. As healthcare becomes more consumer-driven, these tools are emerging as a practical way to improve access, reduce wait times, and keep schedules – and care delivery – on track.
AAPPR members and recruitment leaders consistently connect staffing delays to access delays, said Goryl. “When it takes months to fill roles and a meaningful share of offers are declined, the impact shows up in longer waits and communities going underserved.”
In many markets, leaders also report downstream effects such as service line reductions, deferred growth plans, or shifts in coverage models when hiring timelines extend.
“This is why AAPPR increasingly emphasizes ‘days-to-fill’ as a missing metric in workforce conversations: it translates hiring friction into real access constraints,” said Goryl.
Data points to continued strain
AAPPR’s 2025 Physician and Provider Recruitment Benchmarking findings point to continued strain rather than meaningful relief:
- Recruitment demand remains high (typical organization conducted 96 searches in 2024) and with organizations with less than 200 providers, they typically conducted 16 searches in 2024
- Days-to-fill remains elevated, especially in specialty and surgical searches (physicians median 121 days; oncology median 332 days).
- In 2024, physicians accepted 71% of offers, consistent with 2023, while advanced practice providers accepted 80%, down from 83% the previous year.
- Turnover persists: median turnover rates 7.3% physicians and 7.9% APPs, still above pre-pandemic levels.
- A separate pressure point is the “infrastructure of recruiting” itself: organizations that under-resource recruitment capacity and tools make the problem worse.
On wage pressures and decision drivers, recruiters report that compensation expectations are evolving, but candidates are also increasingly prioritizing schedule control and slower decision timelines.
“Data suggests that staffing conditions have stabilized at a high-pressure level, with persistent challenges in specialty roles and competitive markets,” Goryl said. “While there are pockets of improvement, the overall environment continues to require intentional recruiting strategies, operational efficiency and retention focus rather than a return to pre-pandemic norms.”