As healthcare organizations face mounting financial and operational strain, efficiency has shifted from a long-term goal to an immediate imperative.
During an episode of the Becker’s Private Equity & Business Podcast, Srinivas Velamoor, CEO of NextGen Healthcare, joined Scott Becker to discuss how ambulatory practices are navigating workforce shortages, reimbursement pressure and rising technology complexity, and what separates high-performing organizations from the rest.
Anxiety is defining the ambulatory landscape
Mr. Velamoor, who has been with NextGen Healthcare for nearly four years and previously served as chief growth officer and president and COO, described the current sentiment among medical group leaders in one word: anxiety.
Across independent practices, PE-backed platforms and larger enterprises, leaders are grappling with a common set of challenges:
- Pervasive staffing shortages compounded by wage inflation, with many markets seeing wage growth well above 4% and in some cases 10% to 15%.
- Reimbursement pressure and rising denials across both commercial and government contracts.
- Increasing technology costs and complexity, particularly as AI and automation tools rapidly enter the market.
- Ongoing regulatory demands and consolidation pressures from health systems and private equity.
- Patient engagement gaps, as healthcare becomes increasingly retail-oriented and consumer expectations rise.
Collectively, these forces are pushing organizations to rethink how they operate — not incrementally, but systematically.
A portfolio approach to performance
High-performing practices, according to Mr. Velamoor, are not relying on a single silver bullet. Instead, they are taking what he described as a “portfolio approach to efficiency,” pulling six to seven distinct operational levers in a coordinated way.
Among the most impactful:
1. Revenue cycle optimization.
Top performers reduce charge entry lag to fewer than five days and keep denial rates below 5%, unlocking a potential 5% to 10% uplift in patient revenue.
2. Scheduling optimization.
Reducing no-show rates to under 5% can have significant financial implications. Each missed primary care appointment translates into roughly $15,000 in lost annual revenue per physician.
Strong follow-up management — keeping missed follow-up appointments below 10% — further strengthens throughput and revenue capture.
3. Physician efficiency.
With burnout top of mind, ambient documentation and AI-assisted tools are cutting documentation time by 45 minutes to two hours per physician per day.
That regained time can translate into two to three additional patient visits per day — or simply better work-life balance.
4. Referral management.
Between 10% and 30% of annual net patient revenue can be lost due to referral leakage or breakdowns in coordination.
Tightening this process is a direct lever for revenue protection.
5. Contract optimization.
Beyond storing payer contracts, advanced practices are using analytics and AI to ensure they are fully realizing negotiated reimbursement terms.
6. Site and workforce optimization.
Aligning staffing resources with demand can drive an 8% to 14% reduction in payroll costs and reduce scheduling time by 50%
While not every organization can activate all levers simultaneously, even incremental improvements across several areas can meaningfully improve margins — particularly for PE-backed groups under EBITDA pressure.
Reimagining revenue cycle with AI
As reimbursement uncertainty intensifies — including evolving Medicare and commercial payment models — organizations are increasingly turning to AI and automation to strengthen financial resilience.
Mr. Velamoor highlighted innovation across the revenue cycle workflow, from charge capture to claim submission and denial management. Emerging AI models can act as the “brain” of the practice management system, generating cleaner claims upfront and reducing denial risk.
In cases where denials occur, automation tools can manage disposition at scale, engaging payer systems and handling thousands of queries per minute.
These technologies are helping practices move from reactive denial management to proactive optimization — a shift that is increasingly critical in a volatile reimbursement environment.
Scaling for private equity-backed growth
NextGen works with more than 40 private equity firms across its client base, giving the organization a front-row seat to the operational priorities of PE-backed medical groups.
Three themes consistently emerge:
- Scalable platforms that can support rapid acquisition and geographic expansion.
- Standardization and shared services, minimizing variability and building MSO-style capabilities to drive EBITDA optimization.
- Modernized contract structures, shifting from legacy license-based models to subscription frameworks that enable faster adoption of innovation.
In Mr. Velamoor’s view, unlocking flexibility — both operationally and contractually — is often the key to accelerating long-term ROI.
Supporting independence in a shifting environment
As he steps into the CEO role, Mr. Velamoor emphasized that this is a pivotal moment for healthcare. Policy shifts and market pressures are forcing rapid adaptation, particularly among independent and community-based providers.
He underscored the importance of supporting independent medical groups and federally qualified health centers, which serve as safety nets for millions of Americans.
For ambulatory organizations, the path forward is not about chasing every new technology trend. It is about deliberately pulling the right operational levers, modernizing workflows and building scalable systems that drive measurable gains in efficiency, revenue and resilience.
In today’s environment, operational excellence is no longer optional — it is foundational.
For ambulatory leaders ready to move from anxiety to action, clarity is the first step. Identifying the right levers, and understanding where the greatest financial opportunity exists, can create meaningful margin improvement without adding unnecessary complexity.
Request a complimentary Operational Efficiency Assessment to identify the top two to three margin opportunities within your organization and build a practical roadmap for 2026 and beyond.
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