Inflation remains one of the biggest concerns for ASC and physician practice leaders as costs from everything from supplies to real estate continue to rise at a rate faster than that of reimbursement increases.
Inflation, measured by the Consumer Price Index, rose 2.7% from December 2024 to December 2025, according to the Bureau of Labor Statistics. When it comes to physician practice expenses, labor costs were one thing that has seen a steady increase in the last year. The median level of investment required to support a physician full-time equivalent in a practice rose to $343,128 in the fourth quarter of 2025, according to data from Strata Decision Technology. This represents a 3.4% increase in cost compared with Q3 and an 11.5% increase from Q4 of 2024.
Physician expenses also rose in Q4, with total expense per physician FTE hit about $1.2 million for the quarter, up 6.3% from Q2 and up 8.9% from Q4 of 2024.
But costs are not increasing at the same rates nationwide. Per-physician FTE expenses increased most sharply in the Midwest and Northeast, rising from 12.1% and 13.7% from Q4 2024 to Q4 2025, respectively. Practices in the South and West also experienced significant increases, with expenses up 7.4% and 9.6%, respectively, over the same period.
