A healthy approach to physician compensation has been saved
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A healthy approach to physician compensation
Attracting, compensating, and retaining health care providers
Aging populations. Labor shortages. Increasing US health care costs. Against the backdrop of these industry pressures, the value of physicians—and specifically primary care—has never been higher. Our report examines the evolving complexities of physician compensation and offers actionable physician retention strategies.
Understanding the drivers of change
What’s the current state of physician compensation?
We surveyed primary care physicians who currently work for managed care organizations to analyze physician compensation and evaluate industry benchmarks utilizing 2023 data. Based on the results, several important findings emerged:
- Physicians’ annual compensation in value-based care (VBC) models varies from $190,000 to $500,000 or more.
- The traditional talent model for primary care physicians is a cash-based salary of about $250,000 (median), which increases as work evolves to become more administrative in nature.
- As of 2022, about 22% of physicians are employed by entities that have not historically employed physicians.
Want more findings and provider compensation details? Download the full report.
Talent model considerations
While financial compensation is likely the most important component to attraction and retention, it’s not a ubiquitous solution to employment satisfaction. Employers should consider three other factors in physician talent models:
- A VBC talent model can reduce stress by allowing physicians to manage smaller patient panels. Some organizations in the marketplace today utilize panels of 400–500 patients, which is a roughly 75% reduction compared to average US panel size of 2,300—and is possible in a VBC structured organization.
- Physicians surveyed consistently indicated that the more time spent on tech-based administrative work, the greater their job dissatisfaction. Physicians are drawn to organizations with technology platforms that reduce administrative time and “screen time.”
- While there are a number of creative compensation options open to all organizations, Stark Law and other regulations such as the Friendly Professional Corporation (PC) practice of medicine need to be considered prior to implementing.
Attracting, compensating, and retaining health care providers
Physicians are becoming increasingly sophisticated financially and will look to the promise of growth in stock-based compensation. We believe organizations looking to attract and retain physician talent need to consider new, equity-based compensation models and talent strategies.
While our findings suggest that incorporating equity into provider compensation is critical to satisfaction and retention, providing equity is only sometimes an option—due to the corporate practice of medicine or similar regulatory considerations.
Get in touch
If you’d like to talk more about physician compensation and how your business can elevate its physician retention strategies this year, let’s set up a conversation.
Karthik R. Krishnamoorthy |
Nigel Ferguson |
Joe Bigda-Peyton |
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