Hybrid Models Dominate Physician Pay Amid Productivity Decline

Hybrid compensation models, blending base salaries with quality incentives, now dominate physician pay structures, accounting for over 75% of arrangements reported to the Medical Group Management Association (MGMA). This shift reflects a broader trend away from pure salary or productivity-based models.

The 2026 MGMA Provider Compensation and Productivity Data report highlights a disconnect: physician pay rose 2.23% in 2025, but productivity fell across 23 specialties. Primary care compensation lagged inflation, which hit 2.7%.

Balancing physician pay and practice sustainability

Monique Delgado, a healthcare executive with over 25 years of experience, addressed these challenges at the 2026 MGMA Annual Conference. Delgado, who led Integrated Medical Services (IMS) in Arizona and now serves as market president for Vytalize Health, emphasized the need to align physician compensation with practice goals.

Salary-only models, while predictable, often fail to align with productivity. Delgado advocates for hybrid models that offer earning potential tied to performance, benefiting both physicians and the practice.

Building trust through transparency

IMS transitioned from a salary-only model to a performance-based structure, driven by the need to align compensation with value-based care goals. Delgado stressed the importance of transparency and physician involvement in this process.

She explained, “We had a compensation committee, and we invited any of the providers in the group to participate in it to make sure there was a level of trust and transparency.” Contracts limited pay changes to once a year with 30 days’ notice, promoting stability. This approach contrasts with traditional top-down models.

Delgado believes physicians should lead compensation discussions, with administrators providing data and context. This collaborative method ensures buy-in and fairness.

For practice administrators, Delgado advised scrutinizing the P&L for revenue and expense opportunities before adjusting physician pay.

At the conference, Delgado stressed the importance of staying informed on national trends.

Measuring performance effectively

When tying pay to performance, Delgado emphasized measuring what matters most to the practice. At IMS, metrics aligned with strategic goals, including quality measures, annual wellness visits, and profitability.

Transparency played a key role in maintaining trust. IMS’s compensation committee, open to all providers, gave physicians a voice in the process. Employment agreements limited pay changes to once a year with 30 days’ notice, providing stability.

With over 25 years of experience, Delgado’s insights guide practices through the complexities of physician compensation. Her focus on alignment, transparency, and collaboration ensures both physician satisfaction and practice sustainability.

IMS, now part of Privia Medical Group, remains a physician-owned practice, reflecting Delgado’s leadership and strategic vision. Her advice remains relevant for practices balancing financial health with physician retention.

This partnership approach ensures compensation adjustments are fair and sustainable.

Physician productivity and compensation trends

Patient visits decreased, and primary care physician pay failed to keep pace with the 2.7% inflation rate. This trend highlights a growing gap between earnings and output in the medical field.

Monique Delgado discussed these findings at the MGMA Annual Conference, emphasizing the need for practices to carefully manage finances. She suggested administrators examine revenue and expenses before adjusting physician pay. Delgado’s insights show the importance of aligning compensation with practice sustainability and performance.

Delgado’s background includes leadership roles at various medical groups, including IMS, where she implemented a compensation committee to ensure transparency and trust. Her approach encourages physician involvement in pay structure decisions, supporting a collaborative environment. By sharing data and context, administrators can help physicians understand the financial system and make informed choices.