When doctors get a job offer, the first thing most will do is check the compensation, without considering other factors that are sometimes more important. Whether you are in a salaried, productivity-based, or hybrid model, your income was most probably established using productivity benchmarks and fair market value assessments. They are not the same, but they work together. And it is very important that you understand both.
Large hospitals and medical groups use benchmarks to determine how much to offer a doctor in a specific specialty, region, and position. Organizations such as the Medical Group Management Association (MGMA), the American Medical Group Association (AMGA), and SullivanCotter collect information on compensation and productivity and then analyze it to create these benchmarks. Employers then use these benchmarks to set up the offer they will eventually extend to you.
But there is something you must understand: A compensation benchmark is not the same as fair market value. An employer, for example, can offer you compensation in the 50th percentile for your specialty and region, but this offer may not reflect the fair market value of your specific position. There may be additional circumstances, like specific procedures you will perform, your qualifications, or special responsibilities you will have in the market where you will work. Fair market value considers all these circumstances.
For example, imagine that you are a pathologist. The 50th percentile for your specialty in that region may be $300,000. But if you will also be in charge of supervising labs in two different hospitals, in two different towns miles away from each other, and you are the only pathologist in that region who can fulfill this position, then the fair market value for your role may be much higher than $300,000.
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So, when you get an offer, some of the first questions you should ask are: What benchmark are you using to determine my compensation (MGMA, AMGA, or SullivanCotter)? Which percentile does the offer represent (50th to 75th)? Does the benchmark reflect other doctors with similar responsibilities and practice settings?
Unfortunately, compensation benchmarks managed by these large companies are not easily accessible to individual physicians, like you or me. This information is usually shared with large organizations through subscriptions or institutional agreements. There are public reports and other sources online. But sometimes, they can be inaccurate or incomplete because the information may be self-reported without independent verification.
This is a power imbalance. Your employer has information about what doctors like you are making, but you negotiate with very little financial information.
Another issue is sustainability. Let’s say you get a great offer with a competitive salary. Great. But how long can you keep that salary? A salary that represents the 75th percentile today may not represent the same percentile three or five years down the road. Compensation benchmarks change. The cost of living increases. Practices grow. And the financial circumstances of employers change. If your salary remains unchanged while compensation in your specialty increases, you may gradually fall behind. This is why you should also ask whether your compensation will be reviewed periodically, and what circumstances may lead to adjustments.
Another factor to consider is your capacity to increase your income in the future. More than ten years ago, I accepted a pay cut when I joined my current practice, which may not sound very financially smart. But I made that decision after I evaluated how much I could potentially earn in the future. I knew the compensation model would give me the capacity to make a significant jump in my income, if I worked hard. And it worked. Just a year and a half later, I was making 40 percent more.
Of course, this may not be feasible for everyone. If you have substantial debt or an immediate cash flow problem, you may not have that flexibility. But you can also establish a minimum offer you can reasonably accept, considering your specific situation.
One last factor to consider is the value of each work RVU you generate. Let’s say your employer pays you $50 per work RVU. Using simple math, if you generate 7,000 work RVUs in one year, you will get $350,000, assuming no additional adjustments or bonuses.
What happens if, after the first couple of years, your contract allows your employer to pay you $45 per wRVU? The same 7,000 work RVUs would produce $315,000. A $35,000 difference for doing the same amount of work. You will need to produce about 11 percent more RVUs to keep your previous income.
Over the years, Medicare’s conversion factor has steadily decreased, which does not always mean your employer will automatically lower your RVU conversion factor. But it means your employer may face financial pressure if reimbursement from insurance companies does not keep pace with expenses. And depending on your contract and compensation model, these financial pressures may eventually affect your compensation. This is another reason why you should learn not only how your work RVU conversion factor was established, but what circumstances can make it change. The number of RVUs you generate is only one part of the equation. How much you get paid for those RVUs is the other part.
All these factors make it important that you understand benchmarks. A compensation benchmark compares the income of doctors in your same specialty, practice settings, and geographic region. A productivity benchmark compares the production of doctors in your same specialty, practice settings, and geographic region.
So, ask about both compensation and productivity benchmarks, how much you will be paid per work RVU, whether the offer they are extending to you is guaranteed, and what could make it change.
Bruno Casanova is a minimally invasive gynecologic surgeon, department chair, physician leader, and writer in New York City. He is the founder of MD&D (Medicine, Dollars & Decisions), a free educational platform that helps residents, fellows, and early-career physicians navigate their careers, personal finances, and life in medicine.
Drawing on his experience as a practicing surgeon and medical leader, Dr. Casanova recognizes that medical education prepares physicians to care for patients but often offers limited guidance on major career and financial decisions. Through MD&D, he helps bridge that gap by explaining career choices, job offers, employment contracts, physician compensation, relative value units (RVUs), productivity incentives, investing, and personal finances in clear, everyday language.
His writing also explores the human side of medicine, including professional identity, leadership, and the challenge of balancing professional and personal life. Rather than telling physicians what decisions to make, he offers education and perspectives that help them understand their options and make informed choices.
He shares free educational articles and a newsletter, along with podcasts, videos, and The Truth About RVUs Playbook. He is also on Instagram and Doximity.
