Physician Job Market: How It Affects Salary & RVU Pay

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?

In many ways, provider compensation works like the housing market. Let me explain. Imagine a remote town with only one hospital. That town has one family medicine physician. One day, that physician decides to retire. Now the hospital has a problem. If they cannot recruit another physician, the entire community may lose access to primary care. So, the hospital starts advertising for a replacement. But because the town is remote, and because fewer physicians may be willing to move there, the hospital may need to offer a higher salary or a higher dollar amount per work RVU than hospitals in larger cities. That is supply and demand. The product, in this case, is your medical service. The demand is the need for patient care.

Why Should Medical Professionals Care?

When providers are hard to recruit, compensation often increases. This is why a hospital in a small town in Louisiana may offer more money per work RVU than a practice in New York City, even though New York City may have a higher geographic adjustment index. Why? Because in New York City, there are usually many more providers looking for jobs. The demand for care is high, but the supply of providers is also high. That changes the economics.

Let's use a hypothetical OB/GYN example. We previously discussed that the national Medicare Conversion Factor is approximately $33.40 for most clinicians in 2026. We also discussed that New York City has a higher geographic adjustment index, so the effective Medicare work component may be higher than in many other parts of the country. In simple terms, the geographically adjusted work component in New York City may be higher than the national baseline.

Now let's assume a hypothetical average OB/GYN salary in New York City of approximately $368,000. If the hypothetical national median productivity for a general OB/GYN is approximately 6,800 work RVUs per year, that salary would equal approximately $54 per work RVU. But here is the disconnect.

Let's use a hypothetical midpoint of $45 per RVU. If an employer offers an OB/GYN approximately $368,000 and the actual compensation rate is $45 per RVU, then that physician would need to generate approximately 8,178 work RVUs to support that salary. Not approximately 6,800. And that matters. Because in this hypothetical example, approximately 8,178 work RVUs represents a substantially higher level of production. In other words, you may be receiving an average salary, but the production required to support that salary may be much higher than average. That difference must be addressed somehow. It must be met. Either the physician increases productivity by seeing more patients, performing more procedures, or improving efficiency; or the employer reduces margins somewhere else; or the organization absorbs the difference.

Of course, this is a simplified hypothetical example. Physician compensation is complex, and many other factors are involved. But the point is important. There can be a difference between what you are paid and the level of production required to support that compensation. This is especially relevant in large cities like New York, where academic centers, prestige, lifestyle, and dense populations attract many providers. That can create salary-heavy contracts with relatively high base salaries, but lower marginal productivity payments. In other words, providers may earn more in New York City, but they may also have to work harder for each additional unit of compensation.

Now, let's keep this in perspective. Not everything is about RVUs. Not everything is about productivity. Lifestyle matters. Call schedule matters. Weekends matter. Time with your family matters. A supportive work environment matters. If you are constantly on call, working most weekends, exhausted, away from your loved ones, and practicing in an unhealthy environment, then it may not matter how much you are paid per RVU. Your quality of life may still suffer. Everything has a cost. Especially living and working where you want to be.

In the next article, we will look at what all of this means for new physicians entering the workforce, and why the highest starting salary is not always the best contract.

The Bottom Line

Your salary does not exist in a vacuum. Physician compensation is shaped by productivity, but also by geography, supply and demand, competition, and how difficult you are to recruit or replace. A higher salary does not always mean a better deal if the production required to support it is also much higher.

Key Takeaways

✓ Physician compensation is shaped by supply and demand.
Where physicians are harder to recruit, employers may need to offer higher salaries or higher compensation per work RVU.

✓ A good-looking salary does not always mean a good compensation model.
Look at how much production is actually required to support that salary—not just the salary number.

✓ Compensation is only one part of the equation.
Location, lifestyle, call, weekends, work environment, and time with your family, all have value.

“Everything has a cost. Especially living and working where you want to be”.

MD&D Quote of the Day

What’s Next?

Next: What New Physicians Need to Know About RVU Compensation
How Early-Career Doctors Can Evaluate Salary, Productivity Targets, and Their First Contract

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