Employment Contracts for Family Physicians in an Evolving Market


A review of the broad market trends can help you evaluate the specifics of your contract.

Fam Pract Manag. 2016 Jul-Aug;23(4):28-32.

Author disclosures: no relevant financial affiliations disclosed.

Family physicians are trained to employ both objective data and direct observation when diagnosing a patient, considering the general context of the patient's life circumstances as well as specific health metrics before making a treatment determination.

The process of evaluating a physician employment contract is somewhat similar. It begins with an understanding of the broad market trends shaping physician employment agreements and continues with an examination of contract specifics.

This article will explore both of these factors – market trends and contract specifics. It relies on statistics from one physician recruitment firm, Merritt Hawkins, our employer; however, the data echo trends reported elsewhere.1

Four market drivers

The salaries, signing bonuses, and other perquisites offered to family physicians in employment contracts today are shaped by four key market drivers.

1. The physician shortage. The Association of American Medical Colleges (AAMC) projects a national deficit of up to 90,400 physicians by 2025.2 Nowhere is this more evident than in family medicine. Family physicians remain at the top of the wish list for hospital and medical group administrators, and 2015 marks the tenth consecutive year that family physicians have been the most requested search assignment for our search firm. Rounding out the top 10 are psychiatrists, internists, hospitalists, nurse practitioners, obstetricians/gynecologists, neurologists, orthopedic surgeons, pediatricians, and dermatologists.

One factor exacerbating the physician shortage and accelerating demand for family physicians is the proliferation of alternative sites of service. In an age of “convenient care,” patients want to access physician services the same way they access other services or goods – quickly and easily. As a result, family physicians now have an enviable level of practice options and flexibility, from traditional practice settings to urgent care centers and more.

The physician shortage combined with the competition caused by emerging sites of service has created an upward trajectory for family physician starting salaries. In 2015, the national average rose to $225,000; it was $198,000 a year earlier. (See “Average starting salaries for family medicine.”) Base salaries with a production bonus are now the norm, while income guarantees are virtually a thing of the past. (See “Types of physician compensation structures.”)

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Source: 2016 Review of Physician and Advanced Practitioner Recruiting Incentives. Dallas, TX: Merritt Hawkins; 2016.


Source: 2016 Review

About the Authors

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Travis Singleton is senior vice president of Merritt Hawkins, a physician search and consulting firm and a company of AMN Healthcare....

Phillip Miller is vice president of communications for Merritt Hawkins and Staff Care, both companies of AMN Healthcare.

Author disclosures: no relevant financial affiliations disclosed.



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1. Kane CK, Emmons DW. Policy Research Perspectives: New Data on Physician Practice Arrangements: Private Practice Remains Strong Despite Shifts Toward Hospital Employment. Chicago: American Medical Association; 2013. http://bit.ly/1LhAM9y....

2. New physician workforce projections show the doctor shortage remains significant. Association of American Medical Colleges website. http://bit.ly/1aX20D3. March 23, 2015. Accessed June 8, 2016.

3. The Hospital Acquisition Report. Norwalk, CT: Irving Levin Associates; April 2015.

4. HHS reaches goal of tying 30 percent of Medicare payments to quality ahead of schedule. U.S. Department of Health & Human Services website. http://1.usa.gov/1VTue39. March 3, 2016. Accessed June 8, 2016.

5. Zuvekas SH, Cohen JW. Fee-for-service, while much maligned, remains the dominant payment method for physician visits. Health Aff (Millwood). 2016;35(3):411-414.


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