In physician bonuses, this key factor is on the wane

Source AMA

Whether signing their first physician employment contract in the transition to residency or making a midcareer switch, doctors may be less likely to see the word “quality” come into play in determining their bonuses, according to recent data shared by a leading physician recruiting firm. 

Though opinions may vary on the change’s merit, the trend itself is clear: Data from AMN Healthcare’s Physician Solutions division shows dwindling numbers of their clients’ contracts using quality as a factor for structuring the bonuses paid to physicians.

A look at the data shows that, of the AMN Healthcare searches that offered a bonus in addition to salary, quality was one of the bonus metrics just 16% of the time in 2024–2025. That was down from 26% in 2023–2024, and four times lower than the 64% rate during the 2019–2020 period.

That move away from quality as a deciding factor in bonuses dovetails with what Richard H. Levenstein is seeing. Levenstein, a health care lawyer and shareholder in the prestigious firm Nason Yeager in Palm Beach Gardens, Fla., specializes in health care law and has decades of experience representing physician clients. Over the years, he said, he has seen a shift in the way physician bonuses typically are structured.

“The more significant portions of the bonuses these days are attributable to productivity, [specifically] to RVU production,” Levenstein said.

The use of relative value units (RVUs), which are intended to reflect the amount of work required from a physician for a service, in production bonuses were up slightly in AMN’s data, which showed 65% of contracts having an RVU component in 2024–2025, up from the 57% figure 2023–2024.

AMN Healthcare’s findings were based on a representative sample of the 1,420 search engagements the company conducted from April 1, 2024, to March 31, 2025, and include data on starting salaries and other incentives offered by the company’s clients to physicians across the country. In 935 of those searches, the proposed contracts offered a bonus in addition to salary.

Dive deeper to find out how your specialty stacks up with AMN Healthcare’s 2025 report on physician recruiting incentives. 

Of the bonuses that included quality as a metric of evaluation, the percentage of total compensation tied to quality factors has hovered in between 10% and 16%. Data for the last five years has showed the following percentage of total compensation tied to quality factors in bonuses:

• 2024–2025: 16%.
• 2023–2024: 10%.
• 2022–2023: 14%.
• 2021–2022: 11%.
• 2020–2021: 10%.
• 2019–2020: 11%.

A key question, said Alex Herbison—vice president of AMN Healthcare’s Physician Solutions division—is “what proportion of your total earnings comes from that quality bonus?” 

And, further, “Is that enough to move the needle on behavior if your total compensation—only 16% of it comes from quality? Whereas, if you have an RVU bonus where you can control the volume, you have the chance to make more money.” 

Employers “see the value in that piece as well, obviously, because the patients are getting procedures, the RVUs are rolling in and that means the revenue and the billings are occurring,” Herbison said.

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Experts and the AMA agree: Due to ever-more complex employment contracts, physicians need the help of an attorney well-versed in health care law to examine contract provisions such as the bonus offerings and to determine how those bonuses might be paid out.

The AMA has teamed up with Resolve, a contract review and negotiation firm specializing in physician employment, to provide custom-contract review to AMA members at a discount. Resolve offers personalized legal experience to help physicians secure the best employment contract terms no matter where they are in their careers. Ready to access your AMA-member Resolve discount? Learn more now. 

Increasingly, “the bonus has become a productivity bonus based upon the number of RVUs above a certain expected level of production,” Levenstein said. “If there are quality metrics—and oftentimes there aren't any—they are a small portion of the bonus.”

Salary remains the largest share of income for physicians, yet bonuses are increasingly factoring into compensation, according to an AMA Policy Research Perspective report (PDF) issued last year that examined trends on physician compensation methods from 2012–2022.

In 2022, 68.2% of physicians received at least some compensation from salary, up from 60.2% in 2012, the AMA report shows. Sole compensation by salary has dropped slightly, however, as more doctors receive a combination of salary and bonus. Looking at this another way, 39% of physicians were compensated by a single method in 2022, compared with 51.8% in 2012.

So, what should physicians entering the job marketplace think of this trend on quality-related bonuses?

That “depends on whether you think quality metrics are a valid measurement. And that depends on how they measure it,” Levenstein noted, adding that “many times when I ask how it [quality] is measured, when there is a quality-metrics bonus component or compensation component, I don't get a real answer because they [the contracts] don't have any objective standards.”

He said that, often, the quality-metric component is “so subjective that it's really almost whatever they want it to be.”

And because of those vagaries, such compensation provisions “can be used to eliminate the bonus or the quality bonus to very little or nothing,” he said.

Quality metrics also sometimes depend on factors that have little to do with the actual quality of the care patients are getting.

“The challenge of quality is there are a lot of variables in there,” Herbison said. “A big part of it is usually patient-satisfaction scores, which is a really tough factor when maybe a patient gives you a bad review because you won't give them the pain medication they want,” for example.

The AMA has policy supporting the idea that “subjective criteria, such as patient satisfaction surveys, be used only as an adjunctive and not a determinative measure of physician quality for the purpose of physician payment.” The AMA also backs the idea that “physician payment determination, when incorporating quality parameters, only consider measures that are under the direct control of the physician.”

By contrast, productivity can be a more clear-cut metric to consider, both for physicians and employers. 

“You get a report of what your productivity is—and you [the physician] should know where you're at, at least approximately, by the amount of services you're providing, the time you're spending, the patients you're seeing” and so on, Levenstein said. “It's a different perspective, a different measurement, and the bonus is completely based upon economics rather than some obscure or subjective quality metrics.”

It is possible for quality metrics, when done in the right way, to help encourage higher-quality care. But too often, Levenstein said, “I don’t think that’s the reality.” 

“Productivity, on the other hand, it's good compensation-wise—it's good for the physician,” he added. “Good physicians still will be good physicians, and they will take good care of their patients.”

Explore further with the AMA STEPS Forward® toolkit, “What to Look for in Your First or Next Practice: 

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