Understanding Benchmarks | Compensation

Evidence based insights into physician compensation, RVUs, contracts, healthcare economics, and personal finances. For residents, fellows, and early-career attendings.

Life and Finances, in Medicine.

What Is This About?

Imagine you receive a job offer, and someone tells you that the compensation is at the 75th percentile. The first question you should consider is, “75th percentile of what?”

Why Should Medical Professionals Care?

Regardless of your specialty, we all have heard things like: “You are being paid at the 50th percentile” or “Your compensation is above market.” But what exactly does that mean? Well, the data used to come up with these percentiles is based on benchmarks.

In simple terms, benchmarks are basically statistics. Certain organizations gather information from different institutions (i.e. hospitals, medical groups, private practices and health systems) about physicians’ income and production. Then they analyze the information and establish what represents the 50th percentile (or median, as well as the 75th percentile, 90th percentile, and so on. Then, physicians like you and me, compare our production, income, and many other variables and determine whether we fall above or below each of these marks. Physician compensation discussions frequently use benchmarking data

Many different organizations, collect this type of data some of them are very big, like SullivanCotter, AMGA, and MGMA. They collect data directly from institutions. Other smaller private organizations also collect the same type of information, mostly from medical professional themselves. Different surveys may use different participating organizations, sample sizes, geographic areas, specialties, and even methodologies. Because of that, the number reported by one survey may not be the same as the number reported by another.

So, when someone tells you: “This is the market benchmark” A reasonable question is, “Which survey are you using?” or “Are you using one survey or several?”. The goal is not to establish one perfect number. The goal is to understand the range of available data and how your organization is using it.

Benchmarks can be useful, but they can also be confusing if you do not understand exactly what is being compared. For example, a compensation percentile is not the same thing as a productivity percentile. And neither one, by itself, tells you if your contract is fair.

Let me explain. Suppose you are offered compensation at the 75th percentile for your specialty. That does not automatically mean you are expected to produce at the 75th percentile of work RVUs (wRVUs). Likewise, a physician producing at the 90th percentile does not automatically mean that the physician should receive a 90th-percentile compensation rate per wRVU. These are different measurements. Different benchmarks. Compensation benchmarks tell you how much physicians in your same specialty and in your same region are being paid. Productivity benchmarks tell you how much work physicians in your specialty are producing, often measured in wRVUs. The relationship between the two matters.

Imagine two physicians in the same specialty. One earns $400,000 while producing 6,000 wRVUs. Another earns the same amount, $400,000, while producing 9,000 wRVUs. Their salaries are identical, but their compensation relative to productivity is very different. This is why simply hearing that an offer is “above median” or “at the 75th percentile” does not tell you enough. You need to understand what is behind the number.

Let’s Dig Deeper. How MGMA and other survey companies work

MGMA stands for the Medical Group Management Association. It is one of the biggest, perhaps the biggest, organizations collecting medical practice data, analyzing it, and sharing it with the medical community. They are celebrating the 100^th anniversary in 2026.

MGMA collects compensation, productivity, and practice information from medical groups and healthcare organizations across the country through surveys. Hospitals, medical groups or healthcare systems gather their own information and share with MGMA and other companies, how much they are paying their providers, how much their providers are producing and other important information. That means survey companies are not looking at the compensation and productivity of every physician in the United States. They analyze information submitted by participating medical groups and healthcare organizations.

That matters. Because the data can be influenced by the number and types of organizations contributing to the surveys. For example, information such as, how many physicians each organization has, where they are located, and which specialties they represent may all affect the data.

For example, if a large percentage of the organizations contributing data come from one region and few come from another, the national benchmark may not perfectly represent your local market. The same applies to specialty. One specialty may have a very large number of physicians represented, while another may have a much smaller sample. Smaller samples should be interpreted more cautiously, because they are more easily skewed by these factors (I know I am getting very statistical here). This does not mean the data is bad. It simply means you need to understand the origin of the data being presented to you.

So, when someone tells you: “According to MGMA, this is the 50th percentile.” A reasonable question is, “Is this percentile based on my same specialty, type of practice, and region?”

Remember: The Data Is Usually Delayed

Another important limitation is that MGMA data is not real-time. Remember, data is collected through surveys, and institutions take time to submit their information. They need time to gather, review, and submit their data The bigger the institution, the longer it may take them to collect their data. That is why the information you are looking at is generally based on compensation and productivity data from approximately the previous year. Then the information must be analyzed and published, which adds even more time to the process.

This is important because physician compensation and the physician job market can change faster than this data collection and analysis. Many factors can affect what physicians or providers in general are being offered today, like recruitment shortages, inflation, or changes in reimbursement. So, when someone tells you, “This is the current MGMA benchmark” remember that current does not necessarily mean real-time.

What Does a Percentile Mean?

A percentile simply tells you where a number falls compared with the rest of the dataset. For example, imagine that the 50th-percentile compensation for a specialty is $400,000. That means roughly half of the physicians in that comparison group earn less and half earn more. If your compensation is at the 75th percentile, you are earning more than approximately 75% of physicians in that group.

The same concept applies to productivity. If your work RVU production is at the 75th percentile, your productivity is higher than approximately 75% of physicians in that comparison group. But this is where things become more interesting.

Compensation Percentile and Productivity Percentile Are Not the Same Thing

I already mentioned this above, but I am going to expand on this, because it is one of the most important things physicians should understand. Although your compensation percentile and your productivity percentile are two different things, they should not be looked at separately. Imagine that your compensation is at the 50th percentile, but your work RVU productivity is at the 80th percentile. That tells a very different story than simply saying, “You are being paid at market.” You are producing substantially more than the group of physicians being used to justify your compensation through the compensation benchmark. The opposite is also true, a physician may have compensation at the 75th percentile while producing at the 40th percentile. In this second case, you are producing substantially less than the group of physicians with the same income, according to the productivity benchmark used by your organization.

Neither situation is automatically good or bad. But that’s why the relationship between the two numbers matters.

Your Specialty Matters

You also need to make sure you are being compared with the correct specialty. The compensation and productivity benchmarks for internal medicine or pediatrics, for example, are completely different from those for orthopedic surgery or hematology/oncology. Even within the same specialty, we see significant differences.

Medicine is increasingly sub-specialized. Two physicians may technically belong to the same general specialty but have very different types of practices. For example, in my specialty, OB/GYN, a physician who practices office GYN only may have different benchmarks from a general OB/GYN. Procedure mix, call responsibilities, productivity, and revenue can all be different.

Geography Matters

The United States is big. And physician compensation is not identical throughout the country. Compensation can vary by region because of physician supply, cost of living, payer mix, and recruitment difficulty. A salary that looks very competitive when compared with a national benchmark may not be as competitive in the specific region where you practice.

Compensation in a big city, like where I practice, may be lower than compensation in a rural area where recruitment is more difficult. The opposite can also be true, depending on the specialty and local market. Some organizations use national data, while others use regional benchmarks.

The Job Market Matters Too

We already established that benchmarks are historical data. The job market is happening now. If an organization has been trying to recruit someone in your specialty for, let’s say, 18 months and has not been successful, your negotiating position may be stronger than what the benchmark alone suggests. Now, if there are many physicians competing for one position, the supply of physicians is high and the demand for that position may be lower. You don’t have the same negotiation power. That is why no compensation survey should be interpreted without understanding the job market in your area.

The Bottom Line

Benchmarks can be very helpful when evaluating physician compensation. But a percentile by itself tells you very little. The biggest mistake is treating a percentile as if it were a salary schedule. It is not. It is a reference point. And once you understand what is behind the number, you can have a much better conversation about what your work is worth.

Key Takeaways

✓ A percentile is only a reference point. Being told your compensation is at the 50th, 75th, or 90th percentile means little unless you understand what is being measured and which comparison group is being used.
✓ Compensation and productivity percentiles are different. Always look at them together. A physician paid at the 50th percentile while producing at the 80th percentile is in a very different position from one whose compensation and productivity are aligned.
✓ Benchmarks alone do not define your market value. Specialty, geography, recruitment difficulty, and the current job market all matter.

“Benchmarks should begin the compensation conversation, not end it.”

MD&D Quote of the Day

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