Which Salary Structure Will Bring You the Most Income?

Marcy Tolkoff, JD


August 14, 2014

In This Article

Your Salary Structure Is Critical

For employed doctors, the way your salary is structured makes a huge impact on how much you ultimately earn and how easy or challenging it is for you to achieve that goal. There are several popular salary arrangements for employed physicians -- straight salary, salary plus productivity targets, salary plus productivity targets plus bonus ladder -- and each has numerous variations. Which might be the best for you?

Traditional straight salary-based compensation still accounts for nearly half of physician employment arrangements, according to Medscape's 2014 Employed Doctors Report. "A good portion of this segment likely comprises primary care practitioners and specialists who are self-employed, either in solo or group practices," says Robin T. Levy, president and CEO of Healthcare Navigation Consulting. "It's also more likely to consist of newly graduated physicians, who are typically steeped in student loan debt and content to have a guaranteed income."

By the second or third year of practice, however, many employers will shift new physicians away from pure salary to a model where productivity comes increasingly into play. "I'm starting to see this quite a bit," says Eileen Michaels, a principal at Harris Brand Recruiting, "where employers are trying to transition from providing a fixed income level in favor of hiking the productivity component."

The desire for pure salary isn't necessarily a function of age. Unlike most physicians of yesteryear, many today are more focused on having an enhanced quality of life.

"This is often the case with primary care practitioners," says Tommy Bohannon, of physician recruiting firm Merritt Hawkins. "Instead of working as long and hard as possible, while also having to mine community centers of influence (like church and civic organizations) to build referrals and maximize the prime earning years, some may be willing to accept a lower compensation that's predictable and steady, as opposed to one that's higher and productivity-based, if it means having greater work-life balance."

There's no employer downside to dangling a bonus carrot. "There may not be much of an expectation that the young physicians will meet revenue targets," according to Bohannon. "It's great if they do, but either way, it's a low-risk proposition."


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