Physician Productivity Bonuses: How They’re Structured and Trends From Our Database
- Nisha Mehta, MD
- 2 days ago
- 7 min read
Bonuses can constitute a large part of a physician’s overall annual income in many physician compensation structures. Thus, it’s important to understand how bonuses are structured and how they are paid out when negotiating a new employment agreement. As part of our physician salary and compensation database that we offer as a free resource to our members of our online physician communities, we ask for details about physician bonuses. Along with asking specifically about sign on bonus amounts and relocation bonuses, we ask about productivity bonuses and how they are structured. Several different models were described, ranging from simple RVU-based or collections based structures to more complex models based on a combination of factors, such as RVUs and quality metrics. Below, we cover common bonus structures in physician employment agreements, as well as trends we saw when assessing our database.
Disclaimers/Disclosures: Information below is derived from our physician salary and compensation databases, but is subject to self-reporting errors and availability of relevant data points from our online communities. This information is provided for educational purposes only, and is aimed at advocating for individual physicians. It is not intended to be used for collective bargaining; please see additional disclosures and disclaimers on the physician salary data pages. Please also do your own research before making any decisions based on the information provided. We are not formal financial, legal, or tax professionals and do not provide individualized advice. You should consult these as appropriate. We highly recommend having your physician employment agreement reviewed by a physician contract review attorney to ensure you have the most up to date and relevant information for your specific situation.
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Typical physician compensation models
Different employers may have different standards for the type of compensation model offered to doctors. Common structures for overall physician compensation include:
Straight salary
Salary plus performance bonus/incentive
Production- or productivity-based compensation (can be based on RVUs or collections)
RVU based contracts are often considered for salary plus performance and production/productivity based compensation models. Much of the bonus compensation data we reviewed from our physician salary and compensation negotiation database were based on RVU models, as we highlight below.
Common physician productivity bonus compensation structures
Along with different structures for the overall structure of a physician’s compensation, there are different structures for productivity bonuses as well. Reviewing the aggregate data in our salary and compensation database highlighted just how many exist. Many doctors noted that they have a complex bonus structure. Some physicians even mentioned they weren’t entirely sure how their bonuses were calculated and that they lack transparency from their employer.
Overall, some of the most common models reported include:
RVU-based bonuses: This was the most commonly reported type of bonus structure, often used by hospital systems, with the bonuses tied to the physician’s wRVUs. For physicians on a productivity-based model, their entire compensation is based on this structure, which is also commonly tied into a value per RVU for the year. For doctors with a salary plus performance bonus, they typically have a set benchmark (minimum RVUs) they must meet for the year, and then earn their productivity bonus based on the wRVUs they generate above this minimum.
Collections-based bonuses: Bonuses can also be tied to net collections arising from billed services. This is more common for smaller groups and private practices. Typically in this model, the group will account for overhead and pay a percentage of collections.
Quality and value-based bonuses: Here, bonuses are determined based on a set of quality metrics. This is one of the areas where structures can get complex and convoluted, incorporating several different factors. Metrics physicians mentioned were used included: HEDIS measures; patient satisfaction scores (including Press-Ganey scores); patient panel size; and HCC coding percentage. Metrics can also be tied into academic performances, depending on the practice environment. Metrics used to determine bonuses may be specifically for the physician, for their entire department, or a combination of both.
Team-based and shared pool bonuses: While not as common, some of our doctors mentioned their productivity bonus was pooled, based on the collective performance for all the group’s practitioners.
Hybrid models: Some physicians mentioned their bonuses were determined based on two or more different components, such as a productivity-based bonus and a quality-based bonus,a RVU productivity and an academic productivity, or a productivity plus a bonus if their department met benchmarks. Hybrid model bonuses are becoming more common, especially at hospital systems.
Less common but other noted bonuses came from:
Picking up extra shifts/call and/or holiday bonuses
Patients seen per day
Individual performance reviews
Bonuses paid for overall hours worked
To assess trends in our database, we looked at these common structures individually.
Common RVU-based bonus structures
Physicians on an RVU-based productivity bonus structure typically reported receiving a set dollar rate per wRVU generated past their benchmark/minimum threshold for their base salary. This was sometimes expressed as a minimum RVU/month, though bonuses might only be paid out quarterly or annually.
Other bonus structures included:
Tiered model with different $/wRVU depending on different RVU ranges established
Flat bonus amount in dollars for different tiers of wRVUs generated; this was often determined based on national average percentiles.
The pay per wRVU varied significantly, but generally ranged between $35-$60/RVU. A local contract review attorney can help you better assess trends in your specific market and specialty, as these are highly contingent on these factors.
As noted above, RVU-based bonus structures are common with hospital systems. Hospital systems made up 80%Â of RVU-based bonus structures from our data provided that specified the bonus structure and practice environment. Where RVU-based structures were most common across all environments:
Learn more about understanding RVU based contracts.
Several physicians noted if they didn’t meet their minimum RVU threshold, not only did they not receive a bonus, but they had to pay back some of their base salary to their employer. This is a very important clause to review, as it’s important to make sure that the RVU thresholds that are set for you are realistic to hit prior to signing a contract.
Given the complexity of both bonus structures and overall employment agreements, we almost always recommend getting your contract reviewed by a contract attorney, who can help spot any potential red flags before you take a new job.
Explore:
Common collections-based bonus structures
Collections-based bonus structures are most common with private practice groups, though some physicians in corporate groups and others who worked for hospital systems also reported receiving a portion of collections from billed amounts.
Some insights from our database:
Physicians who received a bonus based on net collections typically received between 30%-50% of collections. This varies a lot by specialty and practice types due to variations in overhead.Â
Specialties with higher overhead will typically offer a lower percentage of collections.
Partners in a practice tend to take a higher percentage or even all of collections once expenses have paid.Â
Employee structures for collections vary more. Many physicians mentioned they receive a percentage of collections over a specific threshold. This threshold ranged anywhere from $350,000 - $1,000,000. Many physicians noted that their threshold was calculated off of their base salary (i.e. 30% of net collections above 3x their salary). This allows practice owners or employers to make some profit but still incentivize employees to get a share of their earnings once the overhead associated with hiring them and their daily overhead costs have been met.
Many collections-based bonuses for employees have tiered structures, where doctors received a higher percentage of net collections as collections increased (i.e. 45% over $450,000, then 50% over $600,000). Again, this allows practice owners and employers to ensure they cover their expenses and the expected profits they project when they hire you, but allow you to get a bigger percentage of the revenue you generate once those margins and targets have been met.
Common quality-based bonus structures
Quality-based bonuses are typically a percentage of a physician’s salary, though some doctors mentioned theirs was a flat amount, given as a percentage of a maximum amount for hitting all metric goals.
For metric-based bonuses, bonuses generally ranged anywhere from 5% of their annual salary up to 25%.
As noted above, metrics used for quality-based bonuses varied greatly. Many physicians noted multiple metrics that must be met before receiving a bonus.
Common hybrid bonus structures
Hybrid bonus structures are becoming more common, but there is no one common model. 50/50 split structures were commonly reported, but the contributing factors differed. Structures reported included:
50% productivity across the team, 50% academic productivity
50% productivity based on individual performance, 50% academic productivity
50% productivity based, 50% metrics based
80%/20% and 95%/5% splits were also reported, with productivity accounting for the majority and quality metrics making up a smaller percentage of the overall bonus.
Other bonus structures
Of the other bonus structures reported above, physicians were often incentivized with bonuses for picking up extra shifts or call throughout the year. Physicians were also paid a flat rate for additional patients seen per day over a set benchmark.
A few physicians also reported receiving charting bonuses. If you’re struggling with charting efficiency, we have some resources that might be able to help on our burnout and wellness support page.
Conclusion
There is no one standard model for bonus structures, just as there’s no one overall compensation model. Physician employment agreements are complex, and trends continually shift as institutions adapt to the ever changing healthcare landscape.
With the number of different models and the complexity within models, we highly recommend accessing our full physician salary and compensation negotiation database to best compare apples to apples to relevant situations.
Additional compensation and contract resources for physicians
Explore our related articles and resources on doctor compensation and salaries:Â
If you need guidance on negotiating your next contract for the best possible deal, check out:
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