Physician pay and productivity split for the first time in years, new MGMA data shows

Physician compensation kept climbing in 2025 even as the production that has long justified those raises moved the other way, according to the Medical Group Management Association's (MGMA) 2026 Provider Compensation and Productivity Data Report. Drawing on data from more than 245,900 physicians and advanced practice providers, the report found that work relative value units (wRVUs) fell in 16 of 23 common specialties and total encounters declined in all 23, even as median total compensation rose across primary care, surgical and nonsurgical specialties. It is the first time in several years the two measures have split, and it leaves practice leaders to weigh how long pay can outrun measured output.

Andy Swanson, MPA, FACMPE, chief customer success officer at MGMA, said the gap looks less alarming once patient acuity enters the picture. Encounters slipped, but the ratio of wRVUs to encounters held roughly flat, a sign the visits that remained were heavier and more complex. "While case volume might have slipped slightly in encounters, the complexity still remains high for physician providers," Swanson said. He tied the trend to a long-discussed shift in which lower-acuity patients move to advanced practice providers (APPs) so physicians can focus on the cases that require them. "Physicians are seeing the right level of care," he said.

The compensation increases themselves were modest. Primary care physicians saw median total compensation rise 2.23% year over year, surgical specialists 2.90% and nonsurgical specialists 1.79%, all at or below the 2.70% rise in the Consumer Price Index. Over five years, only surgical specialists kept pace with the roughly 16% cumulative climb in consumer prices. Nominal pay is still rising; real pay sits closer to flat.

Whether the pattern can hold is another question. Swanson flagged two pressures he considers unsustainable over the long term. The first is the basic arithmetic of pay rising while production falls, though he cautioned against reading too much into a single year. The second is structural: practice costs, including clinician salaries, keep rising while reimbursement stays flat or declines against inflation. "There's going to be a breaking point on reimbursement," he said, warning that the two forces together amount to "a recipe long term for problems."

That reimbursement pressure is already reshaping how production gets counted. On Jan. 1, a CMS efficiency adjustment took effect, cutting the wRVU value of roughly 7,700 non-time-based codes by 2.5%. The agency framed the change as recognizing that many procedures have become more efficient to deliver over time. Time-based services such as office visits and behavioral health are exempt, which largely shields primary care. Procedure-heavy fields are not as fortunate. Swanson said surgical and many nonsurgical providers should expect a 1.5% to 2.5% wRVU reduction on affected codes "not tied to the provider's actual performance in encounters, but just on paper."

Physician groups have pushed back hard. The American Medical Association, which warned that the policy could "directly undercut private practice viability," has urged CMS to ground payment changes in verifiable cost data. A bipartisan bill in Congress would delay the adjustment until 2030. The squeeze is sharpest in specialties that are already among the hardest to recruit, including urology, interventional cardiology, diagnostic radiology and ophthalmology, at a time when the Association of American Medical Colleges projects a national shortage of up to 86,000 physicians by 2036.

Swanson's advice to administrators recruiting in those fields is blunt: do not assume you can trim a starting salary by 2.5% to absorb the cut. Starting pay has plateaued after its post-pandemic run-up, he said, but it has not fallen, and shaving an offer is unlikely to land a top candidate in a tight market. The better lever is schedule and case-mix management, making sure high-acuity patients reach the specialists equipped for them rather than defaulting to APPs.

The workforce strain shows up elsewhere in the data. Eighty percent of groups report that Medicare reimbursement falls below their cost of delivering care, and one in three said a physician retired or left in the past year because of burnout, up from 27% in late 2024. Swanson sees a new, lower baseline rather than a crisis still at its peak. Asked whether the industry has simply accepted burnout, he answered, "To a certain degree, I'd say yes, but to a large degree, I'd say no," crediting better schedule management and smarter technology investment for the gains groups have made.

Artificial intelligence remains an uneven contributor. Fewer than half of leaders, 46%, told MGMA that new AI tools had made providers more productive over the past two years. Swanson said the clearest wins have come from ambient AI scribes at the bedside. "There isn't a physician that isn't using AI scribe to help that doesn't love the technology," he said. The next round of operational gains, he argued, will take time, and he urged leaders to be patient with a sector that has historically been slow to adopt new technology.

Asked what single number practice leaders should track beyond wRVUs this year, Swanson reached back to a pre-RVU metric: total visit volume, paired with the size of the patient panel each clinician carries. Watching how that volume divides across physicians, APPs and other team members, he said, may reset expectations for how many patients providers at each acuity level should handle, and it could push more groups to revisit base-salary models blended with production and quality incentives. "What was old, maybe new again," he said.