Physician Pay: Rewarding What Actually Matters

Physicians are asked to deliver a lot: accessible care, strong outcomes, team-based services, and improved patient experiences—all at high volumes.  

Yet physician compensation often rewards, well, volume. Fifty-five percent of U.S. physicians’ pay is still built around individual productivity, according to the 2026 AMA Physician Practice Benchmark Survey, a figure that has not budged since 2014.  

This, in a nutshell, is one of the biggest problems in healthcare—and arguably the easiest to fix. “It’s a 20^th-century model,” says Li Ern Chen, M.D., M.S., market leader of Physician Workforce Solutions at Korn Ferry. “Structuring modern care delivery around it no longer makes sense.”  

To be sure, fee-for-service economics once made sense, at a time when fewer preventive care options existed: patients typically visited doctors when ill, and paid for appointments and procedures accordingly; in billing departments, work relative value units (wRVUs) provided a relatively transparent and objective measure of effort and productivity, and in turn became the dominant measure of physician pay. But that model simply does not measure the metrics driving the multifaceted outcomes most healthcare systems now seek, creating enormous misalignment. By continuing to use this model, today’s health systems are inadvertently stalling their own strategic imperatives.

The Steep Price of wRVUs  

‍Physicians acutely feel the mismatch between the care they’re expected to provide—value-based! team-based!—and their compensation models. They are being asked to behave one way and rewarded in another. “Physicians know they’re paid and incentivized on a productivity model. That conflict actually does lead to moral injury for the physician,” says Chen. Recent data bears this out: in a March 2026 study of 5,741 physicians in JAMA Network Open, 39% reported high moral distress—and those physicians were more than twice as likely to be burned out (75% vs. 31%) and far likelier to plan to leave within two years (34% vs. 18%).

That moral injury is both painful to physicians and costly to their employers. In a job market where physicians have myriad options beyond the healthcare industry, some are deciding to simply not tolerate it and jumping ship to jobs in tech and consulting; among those who stick around, physician surveys show they’re looking for a better practice environment—one that allows them to deliver care effectively, sustainably, and in alignment with their values.  

Escaping wRVUs

The question is how to shift to stronger compensation models. “Once on the RVU treadmill, it feels like you can never get off,” says Dan Stech, senior client partner in the healthcare consulting practice at Korn Ferry. First, what not to do: some health systems add incremental payments for nonclinical tasks, such as mentoring and extra call coverage. Over time, this creates a highly transactional culture that hemorrhages margins and weakens trust. “It creates this expectation among physicians that for every little bit of extra effort, they need to get paid,” warns Ken Krall, senior principal at Korn Ferry. “This often hinders improvement and can be detrimental to culture.”  

These piece-rate pay models emerged out of physician mistrust of opaque administrative compensation models. “Physicians are doctorate-level scientists. They believe in data and science and visibility,” says Chen. “You can miscalculate a physician’s compensation exactly zero times.” But do you really want your physicians spending their free time calculating their compensation down to the task?  

Instead, compensation experts suggest models that incentivize team-based care, which is essential as advanced practice providers increasingly collaborate with other clinicians. This incentivizing of team-friendly behavior is in some ways the antithesis of wRVUs, which reward individual productivity. Shared accountability becomes both the expectation and the reward in the compensation models. It works. Value-based payment is associated with improvements on seven of nine preventive and primary-care quality measures, according to a 2025 study in Health Affairs.

As for physicians, today’s successful compensation models clearly articulate the workplace expectations covered in baseline compensation. The most credible models make expectations explicit upfront. For example, a base salary might reflect certain core expectations such as average shifts or patient count per month, and additional variable pay might recognize the extra contributions that advance access, quality, collaboration, and patient experience. “These are better rewards models because they make the strategy visible in day-to-day expectations,” says Karrin Randle, associate client partner in the culture, communications and change practice at Korn Ferry. She advises experimenting: small pilot programs wherever possible, to iterate both the compensation model and the surrounding culture.  

What Models Align With Team-Based Care?

Some medical groups are finding success by adopting equal-share models. For example, one large cardiology group offers the same base pay options to all providers, meaning interventionalists and noninvasive cardiologists earn the same amount. Leadership sets clear operating expectations for the role of each physician. The compensation model works because the expectations are explicit.

Other systems maintain similarly equal base salaries for physicians, but link variable pay to team-friendly behaviors such as consultative availability, patient access and experience, quality and safety metrics, team contribution, and support for the broader care model.  

The question leaders can ask themselves is what specific behaviors and outcomes they want reflected in their compensation models. When well-deployed, these rewards become a lever for transforming patient experience and outcomes, and give physicians and care teams a much-needed, clearer and more credible path forward.

How We Can Help

Want to learn more about Korn Ferry's Physician Workforce Solutions practice? Subscribe to our Physician Workforce Insights newsletter.

‍

‍