Intensifying focus on productivity, quality, and incentive structures increases compensation complexity

By Bonnie Darves, a freelance health care writer

In the big picture of physician compensation this year, there’s an overall sense of stability. Earnings are up for primary care physicians (PCPs), medical specialists, and surgeons — with increases ranging from roughly 2 percent to 5 percent across the three categories — and for the most part, compensation is keeping up with both inflation and market benchmarks. For physicians coming out of training, signing and starting bonuses, often well into the five figures, are so common now that candidates can expect them.

Data reported from the Medical Group Management Association (MGMA) put median starting bonuses for PCPs at $25,000, $25,000 for nonsurgical specialists, and $30,000 for surgeons. SullivanCotter, in its most recent physician compensation survey, reported a 25 percent increase in the use of sign-on bonuses, but little change in amounts.

For physicians seeking a new practice opportunity or eyeing an annual compensation review and adjustment, market factors are in their favor, according to Jessica Minesinger, president and CEO of Surgical Compensation & Consulting. “In 2026, compensation continues to rise in many markets and specialties, and physicians have strong leverage in negotiations, especially where access constraints and specialty and staffing shortages persist,” said Ms. Minesinger, who is also a consultant for MGMA.

Matthew Well’s, Ph.D., senior director of consulting for the American Medical Group Association (AMGA), points to supply and demand as the key compensation driver today. “Demand for physicians is at an all-time high. Physicians should expect at (or above) market compensation packages as organizations focus on recruitment and retention,” he said.

Here are other key trends worth noting:

• Guaranteed compensation for residents and fellows leaving training grew substantially in 2024, by more than 13 percent, according to MGMA, as organizations face an extremely competitive market for physicians.
• There has been a shift toward hybrid compensation models that combine a guaranteed base salary with transparent productivity and value components.
• Reversing a years-long trend, MGMA found that surgeons and PCPs in practices owned by hospitals or health systems outpaced their counterparts in privately owned practices in productivity measured by relative value units (RVUs) generated.
• In 2024, average compensation for male physicians rose 5.7 percent, per Doximity’s survey results, but only 1.7 percent for female physicians, resulting in a gender pay gap of 26 percent.
• The AMGA 2025 survey reported a 4.9 percent median compensation hike across three top medical specialties — cardiology, gastroenterology, and hematology/medical oncology — for median earnings of $516,448. The average earnings growth across all medical specialties was 4 percent.
• Nonsurgical medical specialists in AMGA’s north region earned median compensation of $579,828 last year, outpacing counterparts in the south, east, and west regions by $30,000 or more.

If you look beneath the surface at how compensation packages are configured and what employers expect in return for those expenditures, however, the picture is less rosy.

Physicians are, in short, working hard for their paychecks — seeing more patients and assuming increasing administrative burdens and doing more procedures, yet feeling hampered by system issues and insufficient support. Surgeons, in particular, are significantly increasing the number of procedures they do annually, according to several surveys’ findings. But for reasons that aren’t yet clear, surveys are reporting relatively stagnant surgeon RVU productivity.

From the standpoint of employers, however, physicians aren’t as productive as they’d like them to be — to ensure that organizations meet their financial objectives in the challenging marketplace in which they operate. Here’s why: Patient demand for services is growing across the board, and increasingly savvy patients are becoming more demanding regarding access, wait times, and care efficiency. At the same time, staffing shortages are worsening and health care organizations’ revenue streams are rocky. As such, organizations are turning to potential efficiencies and increased physician productivity to stabilize the landscape.

What this boils down to is competing objectives. Physicians would like to get paid top dollar for their efforts. Employers would like them to become more productive to warrant compensation rates because those costs are impinging on funds needed for operations.

On some levels, it’s a basic economic quandary, according to Mr. Wells. If physicians are being paid at the 50th percentile based on survey findings, but some in the group are producing at the 30th percentile, based on wRVUs, things get out of whack, Mr. Wells noted.

“When compensation ratios are out of balance, that puts the organization at financial risk. Whereas, if all providers got to median productivity, [practices] would be in a much better [financial] position,” said Mr. Wells. Recruiting becomes problematic when some physicians are more productive than their colleagues, he added. In his view, physicians should consider the organization’s financial performance a shared responsibility.

As such, Mr. Wells advises job-seeking physicians to obtain a solid sense of a group’s productivity numbers in recent years in any opportunity under consideration. He also encourages physicians to ask potential employers to explain their philosophical approach to compensation.

“When you’re looking at what the future holds for your compensation, asking about the group’s physician productivity history really is an important question.”

— Matthew Wells, PhD, AMGA Consulting

Compensation plan complexity makes evaluation difficult

If this all sounds terribly complicated, that’s because it is. As the practice of medicine and the business of delivering health care services have become more complex, so has physician compensation. And today, as organizations increasingly try to factor quality measures into the compensation mix, those models get more difficult to structure for practices and harder to understand for physicians.

For example, AMGA’s 2025 physician compensation survey found that 10 distinct metrics are now used in employers’ and groups’ compensation plans to gauge physicians’ quality performance and set incentive pay. While 85 percent of organizations surveyed measure clinical quality and patient outcomes, and 76 percent use patient satisfaction measures, the two leading metrics, approximately half of respondents report using patient access and care coordination metrics in compensation plans.

On the financial end, 28 percent have implemented metrics for meeting groups’ financial goals, and 17 percent have care-utilization metrics. Other incentive metrics include clinic support staff engagement, cost management, and physician performance in accepting additional service calls or hospital duties.

Overall, according to MGMA data, PCPs received an 8.8 percent increase in the percentage of their compensation from quality incentives, and for nonsurgical specialists, the figure was 6.7 percent.

Compensation factors physicians should focus on

Ms. Minesinger observes that while quality and incentive metrics now figure in compensation and employment contracts, physicians should focus on understanding the productivity expectations first and foremost and get help deciphering how all the contract aspects fit together.

“From my standpoint, the formulas around compensation have become incredibly complex. But the emphasis is still on productivity, despite all the talk about transitioning to value-based compensation,” said Ms. Minesinger. “It has become so opaque for physicians to evaluate their own compensation and new offers. It’s a big problem — and a very big challenge.” She reports that she has seen surgeon employment contracts so complex that it would “take a forensic accountant to get to the bottom of the numbers.”

Ms. Minesinger is a proponent of the emerging hybrid models that include transparent salary, productivity, and value components that physicians can readily evaluate in the context of total compensation. “When well designed, the hybrid models provide greater clarity, reduce ‘surprise’ variability, and provide greater financial security for physicians,” she said.

All sources who contributed to this article urge physicians looking for a new opportunity or approaching a contract review to equip themselves with compensation benchmark data from survey organizations such as MGMA and AMGA. “This data is simply invaluable,” Ms. Minesinger said, in enabling physicians to evaluate offers and potentially negotiate even routine compensation increases. “Most physicians simply want to know if their compensation is fair, but having the data provides the clarity,” she said.

For example, MGMA produces a single-specialty DataDive compensation report that provides detailed benchmark data on total cash compensation, RVUs, compensation to RVUs, and a full slate of regional data, covering the 10th percentile to the 90th percentile. For those who purchase the $910 report, the expenditure will likely more than pay for itself when it comes to negotiations, according to Mike Gracz, MGMA’s sales manager.

Compensation across the specialty spectrum: a snapshot

What do physician compensation and productivity look like now, regardless of the myriad number-crunching activities behind the scenes? Here’s a brief look at trends in the three key “buckets” — primary care, medical specialties, and surgical specialties — based on the AMGA and MGMA physician compensation surveys.

Primary care

• The AMGA 2025 survey reported a median compensation increase of 5.7 percent from 2024 to 2025, the largest increase since the COVID-19 pandemic.

Productivity, as measured by wRVUs, did not keep pace, leveling off at 1.9 percent, yet compensation per RVU increased by 3.0 percent.

Median compensation for PCPs was $330,216 for family medicine, $347,750 for internal medicine, and $295,248 for pediatrics.

• MGMA’s latest DataDive Provider Compensation report found a 3.17 percent one-year increase in total compensation, continuing the steady uptick for primary care physicians (PCPs) — 14.90 percent from 2020 to 2024. Family medicine compensation increased 4.64 percent, compared to 2.80 percent for general internal medicine physicians and 2.4 percent in pediatrics last year.

Productivity declined by 10.19 percent for PCPs in privately owned practices but increased by 5.83 percent in hospital or health-system practices — despite that total patient encounters increased by approximately 8.0 percent in both groups.

Guaranteed compensation for newly hired, post-residency physicians increased 6.55 percent over the year.

Medical specialties

• The AMGA survey reported a 4.0 percent median compensation increase last year across the nonsurgical medical specialties, lagging behind primary care.

Productivity increased 3.2 percent, and compensation per RVU was essentially stagnant, increasing only 1.4 percent.

• MGMA data showed a total compensation increase of just 1.81 percent for nonsurgical specialties last year, following a 2.54 percent increase the previous year.

The reported productivity increase of approximately 3.0 percent takes on another dimension when comparing results by practice setting: Specialists in private groups saw their productivity decline by 7.73 percent; those in hospital or health-system practices tallied a productivity increase of 9.13 percent.

Guaranteed compensation for newly hired, post-residency nonsurgical specialists increased 13.58 percent.

Surgical specialties

• Median compensation for surgeons increased 3.7 percent last year, per AMGA survey findings, while compensation per RVU, a key factor in surgeon pay, increased 2.9 percent.

Productivity, on the other hand, was all but stagnant, at 1.1 percent, based on AMGA survey data, despite surgeons reporting increasing surgical volumes.

• The MGMA survey reported a 5.57 percent increase in surgeons’ total compensation last year, but only a 12.56 percent total increase from 2020 to 2024, likely due to reduced volumes during the pandemic.

On the productivity front, MGMA reported that surgeon productivity increased 1.69 percent in hospital or health-system groups but declined 15.44 percent in privately owned groups.

Guaranteed compensation for newly hired, post-training surgical specialists increased 11.84 percent over the year.

Productivity in compensation models warrants scrutiny

Although the productivity performance reported in national surveys shows a mixed picture, across all specialty sectors, physicians will likely face increased pressure from employers of all types to increase their individual productivity. That will translate into higher RVU expectations due to employers’ patient-access challenges.

An aging US population, coupled with the aging physician workforce — nearly half of physicians are over age 55 and 23 percent are 65 or older, according to Association of American Medical Colleges data — means that the already acute physician shortage will worsen. That in turn will prompt employers to put pressure on physicians to see more patients at a time when the delivery system is already stressed. When increased productivity expectations are factored into compensation, some physicians could find their pay reduced if they don’t meet organizational benchmarks.

That risk means that physicians must understand the financial relationship between their productivity and their paychecks and should pay close attention to their individual performance — by requesting that data periodically throughout the year. The fact that Medicare is reducing work RVUs by 2.5 percent for most non-time-based services this year will make it even more challenging for physicians to figure out whether their productivity efforts will be adequately compensated. Many physician compensation models are tied to work or total RVUs, which means that the Centers for Medicare & Medicaid (CMS) is effectively cutting doctors’ pay but not reducing their workload.

Tony Kouba, a partner at ECG Management Consultants who specializes in physician compensation models and related regulatory issues, observed that primary care physician productivity is especially in the limelight now because of growing patient volumes nationally. “Primary care is always a focal point because that’s obviously the access point,” Mr. Kouba said, for most care. As such, PCPs will see increased pressure on their productivity performance, daily patient encounter volumes, and the number of patients PCPs care for annually.

“Primary care compensation is still predominantly RVU production-based, but we’re starting to see organizations tracking patient-panel size as well.”

— Tony Kouba, ECG Management Consultants

Mr. Wells agrees that patient volumes, overall and in daily encounters, will become an increasingly important factor in PCP compensation. “The big push right now is that groups are focusing on patient access — getting PCPs to see an appropriate level of patients a day,” he said, to reduce bottlenecks. For example, physicians might be asked to see 17 patients a day instead of 16, he explained. “From a productivity perspective, that [additional patient] might move the needle from the 50th percentile to the 60th,” Mr. Wells said.

How to ensure fair pay in a complex marketplace

What can physicians do to protect their compensation and themselves in this somewhat turbulent environment? Ms. Minesinger urges physicians to ensure that the compensation structure governing their paychecks is both fair and transparent and to make employers aware of any productivity-affecting factors outside physicians’ control. These hindrances might be system inefficiencies, support and administrative staff shortages, prior authorization issues, or even workplace disruptions.

“The issue with productivity-based compensation and incentives is that there are so many factors that can impact a physician’s ability to be productive that are outside their control,” Ms. Minesinger said.

In an ideal world, Ms. Minesinger adds, employers would have active, open compensation committees whose members include physicians. And those committees would openly share both productivity and overall financial data several times annually, as well as physicians’ progress toward incentive pay based on quality benchmarks. This will help ensure that physicians aren’t blindsided when it’s time for their annual compensation review.

“For organizations, being open with the data that’s driving their compensation is critical for trusted transparency, because compensation is culture, and ambiguity around compensation is a major factor in physician burnout.”

— Jessica Minesinger, CEO, Surgical Compensation & Consulting

On a side note, Ms. Minesinger urges physicians to ensure they’re properly compensated for leadership, supervision, and administrative responsibilities they assume for the good of the organization. “Physicians who are paid separately for these duties earn 6 percent to 13 percent more than those who aren’t,” she said, citing 2025 MGMA data.

While physicians should ensure they’re paid appropriately and fairly, Fred Horton, president of AMGA Consulting, urges physicians to try to also take into consideration the overall financial pressures that organizations face. If organizations are paying 10 percent more for physician salaries than they were 10 to 15 years ago, that’s 10 percent they don’t have to fund their operation costs. “It becomes an issue of sustainability,” Mr. Horton said.