How physicians are compensated—New study reveals payment methods

New data on physician compensation methods show that many physicians in non-solo practice settings are paid through a blend of methods, and salary was reported as the most common type of compensation.

The AMA’s new Policy Research Perspectives report summarizes the findings from a 2012 survey of physicians. The survey asked physicians to specify which of four methods determined their take-home pay: salary, compensation based on personal productivity, compensation based on practice financial performance or bonuses based on other factors.

According to the survey, about 53 percent of non-solo physicians received all or the largest share of their compensation from salary. At the same time, about one-third of reporting physicians received all or most of their compensation based on personal productivity, suggesting it may be difficult to align practice-level incentives that encourage judicious use of resources with physician-level incentives that do not.

The survey results highlighted differences in payment methods for practice owners and physician employees. Practice owners cited pay based on personal productivity more than other payment methods, but salary was not uncommon—almost one-third of owners received all or most of their compensation from salary. Nearly 73 percent of physician employees cited salary as their primary payment method.

Payment methods also varied across specialties, especially for owners. Productivity-based pay was of top importance for psychiatrist owners, with 64 percent in that specialty receiving all or most of their compensation from productivity-based pay. Conversely, less than 2 percent of radiologist owners said personal productivity was their primary compensation method. For employed physicians, all specialties reported a high reliance on salary.

“What is clear is that payment filters down to the physician in different ways that depend on the characteristics of a physician’s practice,” the report states. “Changed incentives at the practice level may be felt differently at the physician level, depending on what compensation methods are in place.”

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