What are Compensation Benchmarks?
Compensation benchmarks are standardized salary and compensation data points used to evaluate a physician’s earnings in comparison to peers within the same specialty, geographic location, practice setting, and level of experience.
These benchmarks are derived from surveys conducted by organizations such as the Medical Group Management Association (MGMA), American Medical Group Association (AMGA), and Medscape, among others.
They typically include metrics such as base salary, total compensation, productivity-based earnings (RVUs), and incentive pay.
Why is Matters for Physicians
For physicians, compensation benchmarks play a crucial role in contract negotiation, career planning, and financial decision-making.
Whether evaluating a new job offer or renegotiating an existing contract, having access to accurate compensation benchmarks ensures that a physician is fairly compensated relative to market standards.
Key reasons why compensation benchmarks matter:
- Contract Negotiation: Physicians can use benchmark data to justify higher salaries, bonuses, or improved benefits.
- Productivity-Based Compensation: Many contracts tie compensation to work Relative Value Units (wRVUs); knowing benchmarks helps physicians understand fair productivity thresholds.
- Geographic Variations: Compensation varies widely by region; benchmarks help physicians assess whether an offer aligns with cost-of-living differences.
- Private Practice vs. Employed Models: Physicians in private practice can compare their earnings against employed physicians to evaluate whether their business is financially competitive.
Example in Practice
Dr. Patel, a cardiologist, is reviewing a job offer from a hospital in Texas. The offer includes a base salary of $350,000, plus an RVU-based bonus structure.
Before accepting, she consults the latest MGMA benchmarks for cardiology and finds that the median total compensation for cardiologists in her region is $420,000.
Armed with this data, she negotiates a higher base salary and a more favorable RVU threshold to align with industry standards.
By leveraging compensation benchmarks, Dr. Patel ensures she is not underpaid and that her contract reflects her true market value.
Related: How much money do doctors make?
