Physician compensation in 2023

For the survey, Modern Healthcare analyzed data from nine staffing and consulting firms.

Overall, the median physician compensation across all specialties was $433,606. Physicians in orthopedic, invasive cardiology, and plastic surgery earned the highest compensation on average with a range between $425,000 and $700,000 a year. In comparison, pediatric and family medicine physicians had the lowest average yearly earnings with a range of $230,000 to $300,000. 

Although median physician compensation only increased slightly from 2022 ($433,066), it is an almost $30,000 increase from the median physician compensation in 2019 ($404,000).

According to Modern Healthcare, productivity is still the largest factor that impacts total compensation, but some organizations are also starting to incorporate quality metrics, such as patient experience scores and timeliness in receiving care, into their calculations.

Dave Hesselink, managing principal at consulting firm Sullivan Cotter, estimates that quality metrics currently account for 8% to 10% of total compensation for staff-level physicians across specialties. Unlike productivity, quality measures can be influenced by factors outside of a physician's control, such as resource availability or the number of practicing physicians in an area.

Leah Grant, interim president of AMN Healthcare Physician Solutions, noted that some employers are offering physicians higher base salaries to help them focus more on quality.

Additional incentives

In addition to increased compensation, employers are also offering other incentives to attract and retain physicians. Some of these incentives include large signing bonuses, student loan repayment programs, relocation packages, more flexible work schedules, and opportunities for further medical education.

According to healthcare staffing firm Pacific Companies, rural areas have offered signing bonuses between $100,000 and $200,000. Similarly, Grant said some employers have offered signing bonuses of up to $300,000 for medical directors.

"In all my years of recruiting, this year I've probably seen the most significant numbers," Grant said.

Although consultants and recruiters said urgent care centers and retail clinics have largely turned to advanced practice providers to fill their staff, demand for primary care physicians are still high in certain areas.

Total compensation for primary care physicians has also increased in the past year. Mark Ryberg, physician workforce practice leader at Sullivan Cotter, noted that CMS is shifting reimbursements to favor outpatient care, which highlights the value of primary care, as well as its impact on the overall cost of care.

Many provider organizations are also looking to hire more specialists, especially as the country's aging population drives up demand for specialty care. This increase in demand has led to an increase in compensation for many specialists, including anesthesiologists, radiologists, and obstetricians and gynecologists.

"A pervasive theme in the market right now is this incredible tension between supply and demand, and we're really starting to see—especially in some of the low-supply and/or aging populations in certain specialties—the impact that is starting to have in terms of an upward pressure on compensation as physicians start to debate whether they want to continue at this pace," Ryberg said.

However, some organizations are still facing difficulties filling some specialist roles, even with increased compensation. Behavioral health specialists; dermatologists; and ear, nose, and throat specialists have all been difficult for organizations to recruit.

According to Grant, recruiting challenges will likely depend on the market, as well as how much employers are willing to offer for certain positions. (Hudson, Modern Healthcare, 9/5; Modern Healthcare Physician Compensation Survey results, 9/1)

There is no such thing as a perfect provider compensation model. But adhering to these universal best practices increases the chance of successfully developing a new provider compensation model that works for both clinicians and the organization.  Read on to learn five best practices in physician and APP compensation redesign.