By Dana Jacoby

You can’t cut what you can’t see…

Rising labour costs. Soaring supply prices. Tighter margins. Physician groups are under pressure to stay financially sustainable—without compromising patient care. And while revenue often gets the spotlight, it’s cost control that quietly determines whether a practice flourishes or just gets by.

That’s where cost benchmarking comes in. Done right, it’s not just a budgeting tool; it’s a strategic lens that shows where you stand, where you’re exposed, and where to act.

Here’s how the best-performing groups are using it.

1. See where you really stand

Benchmarking lets you compare your practice’s cost structure—staffing, supplies, overhead—against peer groups with similar size, specialty, or geographic region. Are your per-visit costs 10% higher than average? Is your supply spend unusually high for your case mix?

These comparisons reveal how your numbers stack up in the real world, not just against last year’s budget.

2. Flag inefficiencies early

Cost drift is hard to spot from inside the system. Benchmarking brings patterns into focus. Maybe your admin-to-provider ratio is creeping above the industry norm. Maybe your practice is still overordering certain supplies, or underutilizing tech that could reduce manual tasks.

The gaps don’t always mean someone’s doing something wrong, but they do tell you where to dig deeper.

3. Align leadership around reality

Nothing focuses a leadership meeting like clear, external comparisons. When cost benchmarks show that your group is spending 15% more per RVU than similar practices, the conversation shifts. It becomes less about opinion, and more about action.

Benchmarking helps unify operations, finance, and clinical leaders around a shared set of facts.

4. Inform strategic decisions (not just cost-cutting)

Benchmarking doesn’t just involve slashing expenses, but being more strategic about spending. Maybe your labor costs are higher because you’ve invested in better care coordination. Great—but now you can measure whether it’s paying off.

Used wisely, benchmarks can inform everything from staffing models to outsourcing decisions to tech investments. They help you see what’s working and what’s just expensive.

5. Respond to market shifts confidently

With inflation, staffing shortages, and supply chain disruption still affecting the sector, costs aren’t going back to “normal” anytime soon. Benchmarking helps you respond faster—tracking how your peers adapt, and showing where you can follow suit or gain an edge.

It turns market pressure into usable insight.

Visibility before velocity

You can’t improve what you haven’t measured—and in today’s financial climate, assumptions aren’t good enough. Cost benchmarking gives physician groups the clarity needed to protect margins, make sharper decisions, and invest in something that will truly pay off.

At Vector Medical Group, we help practices turn benchmarking into a living, breathing strategy, not just a spreadsheet. Want to find out where your performance really stands? Let’s take a look.