Improving market comparisons through MGMA’s reporting of compensation and productivity by years of experience

Compensation tables reported by most market surveys are typically referenced in the aggregate, wherein all respondent submissions are combined into a singular population, enabling the extraction of benchmarks relative to the population as a whole. When median annual compensation is cited for a given specialty, in the absence of further categorization, it is generally presumed that the referenced median pertains to the overarching population of physicians within that respective specialty on a national scale.

However, the composition of ‘median’ compensation inevitably varies upon further categorization and the narrowing down the respective sample. Broader variables, such as geographical region (e.g., northeast versus southwest), institutional affiliations (e.g., academic versus non-academic), and population status (e.g., rural versus urban), among others, are considerations for grouping a population of provider respondents. Each of these variables influences the delivery of clinical services, which may or may not warrant inclusion in a sample population of compensation data for comparing production or compensation attributed to a single provider against the broadly defined “market” for the purposes of market comparisons.

One highly correlated variable to compensation and productivity by specialty is the years of clinical practice experience held by a physician. A closer review of such data can offer valuable insights that may otherwise go unnoticed when solely referencing a broad national aggregate pool of respondents. For instance, examining median compensation data across different experience levels can reveal shifts in earning potential as physicians progress in their careers. This analysis may uncover patterns such as peak earning years, plateauing compensation trajectories, or differences in compensation growth rates among specialties. Additionally, disaggregating compensation data by years of experience allows for comparisons between early-career physicians and their more seasoned counterparts, providing valuable benchmarks for career progression and salary negotiation.

Exploring the relationship between years of experience and productivity metrics, such as work RVUs (wRVUs), offers insights into the efficiency and effectiveness of physicians at different stages of their careers. By correlating wRVU productivity with years of experience, healthcare organizations can identify opportunities for performance improvement, optimize resource allocation and develop targeted interventions to support physician development and job satisfaction. Furthermore, analyzing compensation and productivity trends by years of experience enables stakeholders to tailor recruitment, retention and compensation strategies to the specific needs and expectations of physicians at different career stages. For example, healthcare organizations may offer structured mentorship programs, continuing education opportunities or incentive plans tied to career milestones to attract and retain talent across the experience spectrum.

Similarly, policymakers and payers can use this data to inform reimbursement policies, incentive programs and workforce planning initiatives aimed at promoting equitable compensation practices and ensuring a sustainable physician workforce.

The MGMA DataDive Provider Compensation and Productivity survey, in particular, serves as a valuable resource for reporting physician compensation and productivity data based on years of experience, offering such insights on a specialty-specific basis. By way of example, Figure 1 illustrates median compensation data reported for hospitalist (internal medicine) from the 2023 and 2019 MGMA DataDive data sets (for data reported in 2022 and 2018, respectively), separated by years of experience:

Respondents in 2019 reported a peak of compensation within the 13 to 17 years of practice range, with earnings averaging approximately $308,000 per year. However, unlike the downward sloping trend reported by more experienced physicians in 2019, the more recent data showcases a continuing increase in compensation with additional years of experience. Notably, according to the 2023 data set, peak compensation for hospitalists is now observed among those with 23 or more years of experience, averaging approximately $364,000 per year.

While the 2023 data indicates a steady incline in compensation, a more extensive review of comparable data across other specialties suggests that the trend observed in 2019, portraying a negative correlation between higher years of experience and compensation, better aligns with the prevailing market realities.

Figure 2 offers a comparison of median compensation reported by years of experience for the specialty of general surgery, also referencing MGMA 2019 and 2023: Median compensation reported by general surgery respondents peaks between 13 and 17 years (at approximately $476,000 per year) for 2019 and between 18 and 22 years (at approximately $513,000 per year) for 2023, followed by a decrease in compensation for more experienced providers.

Figure 3 allows us to observe a similar inverse correlation within the specialty of family medicine (without OB). Data reported in the 2023 survey, in particular, displays a significant early career increase in compensation, from the grouping of one to two years of experience (i.e., approximately $259,000 per year) to the grouping of three to seven years of experience (i.e., approximately $322,000 per year), which represents a jump of slightly higher than 24%.

Furthermore, in addition to the earlier peak relative to hospitalists and general surgeons, 2023 data indicates that family practitioners are reaching a peak earlier in their respective career progression. In both survey years, it is observed that median reported compensation experiences a marginal downward trend thereafter.

The observation that compensation tends to decrease later in the career stage is well documented, and various contributing factors exist. In particular, physicians with more experience are likely to be compensated under a productivity-oriented structure, whereby a reduction in wRVUs will necessarily result in reduced compensation. In this example, it would not be surprising to see such downward trends as experienced physicians opting to shift out of the clinic due to work-life balance preferences.

In addition, preferences towards reduction of other, non-clinical compensated services (e.g., call rotations, medical directorships, leadership positions, etc.) will also result in reductions to compensation consistent with the referenced inverse relationship to years of experience.

Concerning the opposite end of the scale (i.e., less experienced physicians), the data generally argues against a commonly referenced concept of median compensation as a guaranteed “floor.” Figure 4 offers comparison of median compensation data reported by pediatricians in the 2023 MGMA survey. The chart presents median pay by years of experience relative to the 2023 overall median for the population of pediatrician respondents as a whole. Notably, it may be inferred by such results that one qualification necessary for a pediatrician to earn median compensation is a minimum of 13 to 17 years of practice experience.

These examples are short-sighted with respect to the multitude of factors that contribute to physician compensation. For instance, it may be perfectly plausible for a physician to exceed median compensation in their first year of practice, given above-average wRVU production and a contracted compensation rate per wRVU at or greater than the median. MGMA also provides productivity data based on years of experience, which can yield more interesting insights when combined with compensation data by specialty.

Figure 5 illustrates a comparison of median compensation to median wRVUs grouped by years of experience for interventional cardiology respondents in the MGMA 2023 survey: Such data suggests that peak compensation of approximately $871,000 per year (i.e., between 13 and 17 years of experience) occurs in advance of peak wRVU production of approximately 13,103 per year (i.e., between 18 to 22 years of experience), followed by declines in both wRVUs and compensation thereafter.

Conclusion

While a review of compensation and productivity reported by years of experience may provide useful observations, such data by itself would not be sufficient for preparing an effective indication of market compensation relative to a given physician. A variety of shortcomings should be noted when overly relying on such data.

The specialties referenced herein were partially selected due to their abundance of respondents; a close review of the respondent count should be carefully considered before attributing too much emphasis to any available slice of market data, including the years of experience category. In addition, the place of service, population needs and scope of additional services provided, among other critical factors, should be included in a thorough compensation analysis. However, when appropriately paired with these and other variables, consideration of data reported by years of experience could potentially result in a more robust and accurate result.