Interactive Tool

    Physician Compensation Model Explorer

    Filter six compensation structures by practice size and by what your group is optimizing for. No dollar figures, no invented benchmarks, just the mechanics, the fit, and the failure modes.

    Straight salary

    How it works

    Each physician receives a fixed salary set at hire or by annual review, independent of individual productivity.

    Who it suits

    Early-career physicians, ramp-up periods after a new hire, and settings where volume is largely outside the physician's control, such as hospital-employed or academic arrangements.

    Failure modes

    High producers subsidize low producers with no offsetting benefit, which drives resentment and eventual departure of the practice's strongest performers. Salary alone gives no incentive to grow a panel or take on additional call.

    Watch for in the agreement

    The review cadence and criteria for salary adjustment, whether there is any productivity floor or ceiling tied to renewal, and what happens to the salary figure if group volume declines.

    Base plus wRVU productivity

    How it works

    A guaranteed base covers a floor, with additional compensation paid per work relative value unit produced above a threshold, typically reconciled quarterly or annually.

    Who it suits

    Groups that want to reward volume and complexity without full exposure to collection risk, and physicians who want partial predictability alongside upside.

    Failure modes

    wRVU thresholds set without reference to the group's actual specialty mix create physicians who are perpetually behind or perpetually far ahead of target. Coding drift toward higher-wRVU codes can also appear if the incentive is not paired with coding oversight.

    Watch for in the agreement

    How the wRVU conversion rate is set and whether it is reviewed annually, what happens to the threshold if payer mix or schedule changes, and whether coding is audited independently of the physician being incentivized.

    Pure productivity (eat what you kill)

    How it works

    Compensation is directly tied to collections or receipts generated by the individual physician, net of a defined share of shared overhead.

    Who it suits

    Established physicians with a mature panel and strong personal referral base, particularly in specialties where individual variation in schedule and case mix is large.

    Failure modes

    New physicians without an established panel struggle to reach viable income during ramp-up. Physicians may resist coverage, call, or administrative duties that do not generate personal collections, and may resist referring internally when it reduces their own volume.

    Watch for in the agreement

    How shared overhead is allocated across partners, whether there is a ramp period with a guaranteed floor for new physicians, and how non-billable duties such as call and committee work are compensated or credited.

    Equal share

    How it works

    Net income after expenses is divided equally among partners regardless of individual production, call load, or tenure differences.

    Who it suits

    Small, tightly aligned partnerships with similar workloads, similar schedules, and a high degree of mutual trust built over time.

    Failure modes

    Works only as long as workload stays roughly equal. A partner who reduces hours, takes extended leave, or produces meaningfully less than peers creates conflict that the compensation model has no mechanism to resolve.

    Watch for in the agreement

    Whether the agreement defines a minimum expected schedule or call commitment, and what triggers a renegotiation if workload becomes unequal.

    Value-based or quality-weighted

    How it works

    A portion of compensation, layered on top of a base or productivity component, is tied to quality metrics, patient experience scores, or shared savings performance.

    Who it suits

    Groups already participating in value-based contracts or alternative payment models where quality metrics affect group-level reimbursement, and where leadership wants compensation to reflect that exposure.

    Failure modes

    Metrics chosen without physician input are frequently seen as arbitrary and disconnected from clinical judgment. Small quality pools relative to total compensation are often ignored entirely rather than driving behavior.

    Watch for in the agreement

    Which specific metrics are used, how they are measured and by whom, what share of total compensation is actually at risk, and how metrics will be updated as payer contracts change.

    Hybrid model

    How it works

    Combines elements of the above, commonly a base, a productivity component, and a smaller quality or citizenship component, weighted according to group priorities.

    Who it suits

    Groups with diverse physician tenure, specialty mix, or practice styles where a single-lever model would not fit everyone, and groups transitioning between models over time.

    Failure modes

    Complexity itself becomes the failure mode. Physicians who cannot explain how their own paycheck is calculated tend to distrust the model regardless of its underlying fairness.

    Watch for in the agreement

    Whether the formula is documented in plain language the physicians can independently verify, and whether the weighting between components is reviewed on a fixed schedule rather than left to informal renegotiation.

    How This Works

    This explorer describes six compensation structures we see repeatedly in advisory engagements with independent and hospital-affiliated groups. It does not include specific compensation dollar figures or wRVU conversion rates, because reliable, current benchmarks for those figures require a named survey source, and we do not publish numbers we cannot attribute.

    Use the filters to narrow to structures that fit your practice size and stated priority, then read the failure modes and agreement terms before assuming a model transfers cleanly from another group's experience to yours.

    Questions About Compensation Models

    Which physician compensation model is best?

    There is no single best model. The right structure depends on group size, specialty, payer mix, and whether the priority is predictability, productivity, recruitment, or partnership alignment. Most established groups end up on a hybrid model for exactly this reason.

    Why does specialty size matter to the compensation model?

    Small partnerships can sustain equal-share or pure productivity models because workload differences are visible and personally negotiated. Larger groups need formulas that do not depend on informal trust among every partner, which pushes them toward base-plus-productivity or hybrid structures.

    What is a wRVU conversion rate?

    It is the dollar amount paid per work relative value unit produced above a defined threshold. This tool does not publish specific conversion rate figures because they vary by market, specialty, and negotiation, and any figure presented as a benchmark without a named source would be unreliable.

    How do value-based components fit into compensation?

    They typically sit alongside a base or productivity component and tie a portion of pay to quality metrics, patient experience, or shared savings performance already present in the group's payer contracts, rather than replacing the underlying structure entirely.

    What should physicians look for in a compensation agreement before signing?

    Look for exactly how the formula is calculated, how often it is reviewed, what happens during ramp-up or leave, how shared overhead is allocated, and whether the calculation can be independently verified from the practice's own reporting.

    Design a Compensation Model That Fits Your Partnership

    We help groups redesign compensation formulas so every partner can verify their own paycheck against the agreement's plain language.

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