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When you receive a new employment contract, compensation is usually the first thing you want to understand. Is the offer competitive? Is the base salary in line with what your peers are earning? Is the bonus structure reasonable?
To answer those questions, many doctors turn to MGMA data. The Medical Group Management Association publishes one of the most widely used compensation benchmarks in healthcare, and you may see it referenced during your contract negotiations.
Understanding what the data actually says (and what it doesn’t) is important to using it effectively.
1. Start With Total Compensation
When interacting with MGMA data, the number you will hear referenced most often is “total compensation.” MGMA defines this as all cash compensation you receive in a year.
What’s included:
The amount reported as direct compensation on a W2, 1099, or K1, plus all voluntary salary reductions such as 401(k), 403(b), and Section 125 Tax Savings Plan.
Total compensation includes:
- Base salary
- Bonus/incentive pay
- Research stipends
- Distribution of profits
What’s not included:
Total compensation does not reflect the value of your benefits or any reimbursements.
Total compensation does not include the value of:
- Employer retirement contributions
- Health insurance
- Life insurance
- Expense reimbursements
- Malpractice insurance
- CME allowances
- Paid time off
While these benefits have value and are something you should factor into your employment decisions, they are not part of the total compensation calculation.
This matters when an employer presents you with a compensation package. You may see a large number at the bottom of the page, with line items that contribute to the final value. Oftentimes, a valuation of benefits is folded into the total. If the employer tells you that their offer matches the MGMA median, but their figure includes benefits, the two numbers are not actually equivalent.
2. Look Beyond Total Compensation
The MGMA provides more than just compensation numbers. They also have information on wRVU thresholds, conversion factors, collections, patient encounters, and more. These are the metrics your productivity bonuses and long-term compensation are often tied to, so they deserve attention when considering an offer.
If your contract ties a portion of your compensation to hitting a certain wRVU threshold, knowing the median threshold for your specialty gives you a way to evaluate whether the target is reasonable or aggressive. The same goes for patient encounter expectations and collections-based compensation models.
3. Understand The Filters Available
MGMA data can be filtered in several ways, which makes it more useful when applied thoughtfully. Data can be narrowed by population size, practice type and size, and years of experience.
Knowing which filters are relevant to your situation helps you benchmark against the right peer group. A hospitalist at a large urban health system and an outpatient internist joining a small rural practice are not looking at the same income potential, and they should not be using the same data.
4. Know The Assumptions
MGMA data assumes full-time employment, and that full-time is defined consistently across all positions. In reality, “full-time” can vary quite a bit.
For many outpatient specialties, the definition is fairly consistent, typically built around a standard work week with set clinic hours. There may be some variation in patient-facing time, but you generally know what full-time looks like.
For shift-based and procedural specialties, the assumption is less clear. Physicians in these roles are often paid by the shift, the hour, or the case, and shift length. Number of shifts per month, call burden, and the night or weekend coverage expectations vary widely.
5. Remember The Limitations
MGMA data cannot account for the specifics of any individual position. If an employer has been recruiting for a role for two years because the location is hard to fill, the data will not tell you that. If you are being recruited to an underserved area with a critical shortage of physicians in your specialty, the data will not reflect the premium that kind of market should command.
Teaching and supervision responsibilities, unusual call burdens, administrative duties, and the overall desirability of the position are all factors MGMA cannot capture. When considering factors like these and more, the data should be seen as a starting point, rather than the final say.
6. Pay Attention To Regional Variation
Compensation can vary widely across the four regions MGMA divides its data into. There is also substantial variation within each of these regions.
Local demand for your specialty, cost of living, competition from nearby health systems, and the specifics of the practice you are joining will all influence what a fair offer looks like in your particular market.
7. Use MGMA Data To Tell Your Story
MGMA gives you a credible, widely accepted benchmark to ground your compensation conversations, but it will never fully reflect the unique circumstances of the position in front of you and what you bring to the table. The goal is to understand what the data is telling you, understand where it falls short, and use that to advocate for a contract that reflects the value you bring.
Many doctors encounter MGMA data for the first time during their contract negotiations with limited time to figure out what it means. Working with someone who regularly navigates MGMA data and physician contracts can help you apply the numbers to your unique situation and make sure the offer matches your worth.
Access MGMA Data
Accessing MGMA data on your own is expensive. A full subscription can run into the thousands of dollars, which is hard to justify for a single job search. And even if you can get the numbers, interpreting them and applying them to the specifics of your offer is a different challenge altogether.
Panacea Legal’s Compensation Review gives you both the data and the expertise to make sense of it, without the cost of a full subscription. For $49 per review, you get:
- A compensation report for your selected geographic area and specialty, pulled from MGMA data
- An analysis of your pay — either by reviewing a job offer in hand or discussing typical pay in your field and area
- A half-hour call with a contract lawyer to walk through the numbers and answer your questions
It is an affordable way to benchmark your offer against the right peer group, understand what the data is telling you, and head into your negotiations with confidence.
