Medical Practice Management
Jul 22

Sample physician compensation models

Here are a few sample physician compensation formularies I have worked on in the past. Keep in mind each can be "tweaked" to fit a particular practice and/or medical specialty.

Model 1: Pure Productivity

Individual doctor collections
Less: equal share of operating overhead
Less: doctor direct costs (malpractice, CME, etc)
Equals: doctor compensation

Model 2: Pure Productivity with Unequal Overhead Split

Individual doctor collections
Less: ___% of operating overhead split equally
Less: ___% of operating overhead split based on ratio of doctor collections
Less: doctor direct costs (malpractice, CME, etc)
Equals: doctor compensation

Model 3: Equal/Productivity Revenue Allocation (shows you are a “group”/lessens competition)

10-20% revenue shared equally
Remaining revenue split on ratio of doctor collections
Less: equal share of overhead
Equals: doctor compensation

Model 4: Salary plus Bonus Model

Each physician receives a base salary of $___________
Remaining net income split based on ratio of doctor collections or work RVUs

Net income =
Revenues
Less: all overhead
Less: doctor base compensation
Equals: net income

Model 5: Net Income Productivity Model

Collections
Less: operating overhead
Equals: net income (split based on doctor work RVUs)
Less: doctor direct costs
Equals: doctor compensation

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →