I remember staring at my first attending paycheck with a mixture of excitement and confusion. After years of resident salaries, the numbers were larger – but so were the deductions, and what exactly was an RVU? This guide breaks down everything I wish I’d known about physician compensation when starting my career.

Physician Compensation Models: Beyond the Base Salary

Understanding different compensation models is crucial for career decisions. Here’s what I’ve learned from my own experience and colleagues:

Pure Salary Model

Many physicians are offered a straight salary of annually. While this provides stability, you may be leaving money on the table. Pure salary models work well for:

• New graduates wanting predictability
• Physicians prioritizing work-life balance
• Hospital-employed positions
• Specialties with less variable workloads

Productivity-Based Models

A colleague in private practice works under this model, earning $150 per RVU above a 4,500 RVU baseline. Last year, she earned $285,000 by exceeding her target. These models suit:

• Experienced physicians confident in their efficiency
• Specialties with high procedure volumes
• Physicians willing to work longer hours for higher earnings

Hybrid Models

My friend, Frank, has a contract that combines a base salary of $200,000 with productivity bonuses, quality metrics, and patient satisfaction scores. Last quarter, he earned an additional $12,000 for exceeding RVU targets and maintaining high patient satisfaction.

Breaking Down Your Paycheck: The Devil in the Details

Common Deductions

Paycheck breakdown (Annual salary $204,000):

• Gross Monthly Pay: $17,000
• Federal Tax: $3,740
• State Tax: $850
• Social Security: $1054
• Medicare: $246
• Health Insurance: $70
• Dental/Vision: $90
• Retirement Contribution: $1,700
• Disability Insurance: $450
• Net Pay: $8,100

Benefits Package Components

Look beyond the salary numbers. Benefits package may include:

• Health Insurance ($24,000 annual value)
• CME Allowance ($3,500 annually)
• Malpractice Insurance ($30,000 annual value)
• Retirement Match (up to 5% of salary)
• License/Board Certification Fees Coverage
• Cell Phone Stipend ($100 monthly)

Understanding RVUs: The Currency of Medical Productivity

RVU Basics

Relative Value Units measure the complexity and resource requirements of services. A pediatric practice uses these benchmarks:

• New patient visit (99203): 2.12 RVUs
• Established patient visit (99213): 1.30 RVUs
• After-hours add-on (99050): 0.24 RVUs

Productivity Bonus Structure

Sample practice:

• Base expectation: 4,500 RVUs annually
• Bonus threshold: $50 per RVU above base
• Quality metric bonus: Up to $20,000 annually
• Patient satisfaction bonus: Up to $10,000 annually

Partnership Tracks: The Long Game

Understanding partnership opportunities is crucial. A colleague’s partnership track includes:

• Two-year associate period
• Buy-in cost: $150,000 (can be financed)
• Expected partnership income increase: 40-60%
• Additional responsibilities: Administrative duties, call coverage
• Profit-sharing opportunities

Key Questions to Ask About Compensation

Before Signing

1. Base Salary Details
   • What’s the guaranteed base?
   • How long is it guaranteed?
   • What triggers changes?
2. Productivity Metrics
   • What’s the RVU target?
   • How are RVUs calculated?
   • What’s excluded from RVU calculations?
3. Partnership Potential
   • What’s the timeline?
   • What’s the buy-in structure?
   • What’s the typical partner compensation?
4. Benefits Coverage
   • What’s included vs. self-funded?
   • When do benefits start?
   • What are the out-of-pocket costs?

Making Sense of Your Offer

Red Flags to Watch For

• Undefined productivity metrics
• Unclear bonus structures
• Missing benefit details
• Vague partnership criteria
• Non-compete clauses without clear boundaries

Green Flags

• Transparent RVU calculations
• Clear bonus structures
• Detailed benefits documentation
• Well-defined partnership track
• Reasonable call expectations

Negotiation Tips from Experience

When negotiating my current position, I focused on:

1. Base salary alignment with MGMA data
2. Reasonable RVU targets for my specialty
3. Comprehensive benefits package
4. Clear partnership timeline
5. Balanced call schedule

What will be your biggest negotiation win? You need to decide on what’s important to you.

Moving Forward: Monitoring Your Compensation

Create a system to track:

• Monthly RVU production
• Bonus progress
• Quality metrics
• Patient satisfaction scores
• CME allowance usage

Review quarterly to ensure you’re on track for bonuses and addressing any productivity concerns early.

About the Author: Dr. BWMD is a practicing pediatric subspecialist who shares insights about the business of medicine. His writing focuses on helping physicians understand and optimize their compensation while maintaining work-life balance.