Physician compensation is on the rise as provider organizations try to attract more doctors in a tight labor environment.
The industry is still responding to post-COVID-19 pandemic market dynamics, according to companies that responded to Modern Healthcare’s 2023 Physician Compensation Survey, which analyzes data from nine staffing and consulting firms. As patients return for deferred procedures, burned-out doctors are taking a step back from work and students are rethinking career options, creating supply-demand mismatches.
To recruit more physicians, providers are turning to higher base salaries, in addition to sweetening the deals with signing bonuses or educational opportunities. Productivity remains the largest factor in calculating total compensation, but employers are also incorporating quality metrics.
Here are five takeaways from this year's Physician Compensation Survey.
1. Employers are upping the ante for incentives.
Hefty signing bonuses and other incentives—such as student loan repayment programs, relocation packages, more flexible work schedules and additional medical education opportunities—play a key role for employers looking to attract and retain talent.
Leah Grant, interim president of AMN Healthcare Physician Solutions, said she has seen employers offer signing bonuses up to $300,000 for medical director positions.
“In all my years of recruiting, this year I’ve probably seen the most significant numbers,” Grant said.
Healthcare staffing firm Pacific Companies reported in this year’s survey that it has seen $100,000 to $200,000 signing bonuses in rural areas. Such bonuses are often awarded over multiple years.
Some employers offer housing stipends to help physicians relocate in tight real estate markets, said David Rubio, executive vice president at Pacific Companies, while others give lump sum amounts to physicians joining their team, with autonomy as to how the money is used.
2. Paychecks reflect quality metrics—sometimes.
As with previous years, quality measurements such as patient experience scores or timeliness in receiving care are being incorporated into physician compensation, as provider organizations continue to adapt to heightened public expectations.
Still, such metrics only account for 8% to 10% of total compensation for employed staff-level physicians across specialties, estimated Dave Hesselink, managing principal at consulting firm SullivanCotter.
Quality measures can be influenced by several factors outside a physician’s control, in contrast to the straightforward calculations for productivity measures. Timeliness of care, for example, largely depends on resource availability or the number of practicing physicians in an area.
Some employers are offering higher base salaries to give physicians the support needed to focus on quality, AMN's Grant said.