Each year the Medical Group Management Association produces a report on practice operating costs and profitability. Dr. Larry Kaskel discusses the most recent results with Dr. William Jessee, president of Medical Group Management Association. The critical finding is that practice-operating costs are increasing at a higher rate than practice revenue in all areas of medicine. Dr. Jessee reports that the greatest driver of costs is labor due to shortages of healthcare workers and resulting increases in salaries. Notwithstanding, Dr. Jessee notes that practices with more FTE support staff were more profitable than those with fewer FTE support staff, highlighting the importance of proper staffing for the job function. Dr. Jessee discusses the importance of real-time adjudication and the developing trend of more hospital-owned practices.