Is your medical practice a productivity paradox?

“Work smarter, not harder.” It’s a nice idea — but in many medical practices, it feels like the opposite is true. That’s the essence of the “productivity paradox.” 

In the context of physician compensation and practice operations, the productivity paradox refers to a disconnect: increased provider productivity — measured by patient encounters, total collections, or even hours worked — doesn’t always result in higher compensation, increased work RVUs, or improved financial health for the physician, advanced practice provider (APP), or the organization. In fact, sometimes groups that report the highest productivity by volume may actually lag in key performance or compensation measures compared to their peers. 

What does this look like in real life? 

• Private practice physicians may see more patients and generate more revenue (collections and encounters) than their hospital-employed counterparts but still earn less and, in some cases, even report lower work RVUs. 
• Hospital-/system-employed physicians may see fewer patients, but those encounters are coded for higher complexity, resulting in higher work RVUs (which can drive higher compensation, especially if the pay plan is RVU-based). 
• APPs (nurse practitioners, physician assistants) in physician-owned practices may show both higher productivity and higher compensation than their hospital-employed peers, an exception to the paradox, possibly because these practices use a more direct “eat-what-you-kill” compensation structure. 

Why does this paradox happen? 

1. Case mix differences: 
   High patient volume doesn’t always mean high-acuity or high-RVU care. For example, a doctor who sees mostly routine follow-ups or quick visits will log many encounters but generate fewer total RVUs than a colleague doing complex or procedures. 
2. Compensation plan design: 
   In hospital systems, salary floors may decouple productivity from compensation, making these employed physicians less sensitive to volume-based incentives. If compensation is heavily weighted toward salary or incorporates “system-level” roles (teaching, admin, committee work), productivity may not directly boost take-home pay.  
3. Revenue cycle and collections: 
   More patients and procedures don’t always lead to more money in the bank. Contracted rates, payer mix, and efficiency of billing/collections play a big role — private practices may work harder but collect less per encounter than large systems. Then throw in a massive disruptor like the 2024 Change Healthcare outage and things go even further sideways.  
4. Regulatory and compliance constraints: 
   Hospital-owned practices may capture more RVUs per encounter due to more robust coding/compliance programs, EHR prompts, or ancillary services bundled into visits. 
5. Operational bottlenecks: 
   High-volume providers may be constrained by staffing, EHR, or burnout — meaning that “doing more” can actually make retention and satisfaction worse, especially if extra work isn’t matched with pay. 

What should practice leaders do? 

• Don’t assume high encounter or volume numbers mean higher productivity or profitability. 
• Analyze the full value chain: Are your physicians being paid appropriately for the work being done? Is your compensation model rewarding the right behaviors? Are you measuring the “right” kind of productivity (e.g., RVUs, patient outcomes, revenue, or just visit count)? 
• Evaluate your coding and documentation:  Are high denial rates or chronic undercoding hindering compensation potential? 
• Consider shifting incentives: Modernize comp plans to reflect not just volume, but value, quality, complexity, and organizational goals. 

The productivity paradox is the disconnect between how much work is being done and how providers are paid or valued for it. Recognizing and addressing this paradox is essential for strategic compensation planning, retention, and sustainable practice growth. 

Want the latest compensation and productivity trends across physician and APP roles?
MGMA’s 2025 Provider Compensation and Productivity Data Report is out now — packed with benchmarks, emerging hybrid pay models, and insights into how private practices are leveraging APPs to boost productivity. Whether you're tracking wRVUs, planning recruitment packages, or navigating pay equity, this member-exclusive report is your go-to source.