Physical reads generally happen when the blocks are not found in the buffer and u have to do Disk I/O to load it into the buffer.
If you think the db_block_buffers is high enough.
You can do many things to improve hit ratio:
1)Use multiple buffer pool startegy.
2) For small lookup tables, cache them.
3)Usage indexes properly (even though Oracle does not think the index blocks are in buffers and goes to disk but you can tune it with init.ora parameter which shall force Oracle to first look in buffers and then do disk i/o.
Even then the number of disk i/o is less.
4)Check disk sorting, use direct sorts , which is default in 8.1.6.