The four forces reshaping physician pay, with Tynan Kugler of PYA

Physician compensation has never been simple, but in 2026 it is especially fraught. Medical groups and health systems are contending with workforce shortages, flat or declining reimbursement, rising operating costs and the regulatory limits that come with employed and affiliated models all at once — and a competitive offer, on its own, no longer closes the deal.

Medical Economics Associate Editor Austin Littrell sits down with Tynan Kugler, M.P.H., MBA, CVA, a principal in PYA's consulting practice, to break down the four forces pulling physician pay in competing directions and what physicians and organizations tend to get wrong about how compensation actually gets built.

Music Credits:
Rooftops by Buurd - stock.adobe.com
A Textbook Example by Skip Peck - stock.adobe.com

Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 – 0:32 | Cold open — Kugler on the central problem: once compensation is set it creates a floor, and that floor is very hard to step back down.
0:32 – 1:26 | Introduction — Austin Littrell welcomes listeners back from the Fourth of July weekend and previews the episode.
1:26 – 9:04 | The four forces — Supply-and-demand imbalance, the shift to employment and affiliation, reimbursement pressure and the productivity-versus-value tension. Kugler walks through how each is pulling on physician pay, plus the 2026 Medicare conversion factor and the coming 2027 unbundling of global obstetric codes.
9:04 – 13:22 | Competitive pay without runaway costs — Why the strongest groups redesign their models instead of raising salaries each year: hybrid base-plus-incentive structures, quality and access measures, shorter guarantee periods and smarter advanced practice provider strategy.
13:22 – 17:22 | Why pay is so hard to walk back — Compensation sets a floor that keeps ratcheting up. With demand outstripping supply, flat reimbursement and regulatory limits on changing contract terms, employers have little room to pull pay back down.
17:22 – 18:13 | P2 Management Minute — Keith Reynolds shares practice management tips and invites listeners to send in their own workflow ideas.
18:13 – 21:59 | Where there's room to move — Base pay and productivity metrics are the least flexible, because they track market data most closely. The give tends to live in quality incentives and recruitment tools like signing bonuses and forgivable loans.
21:59 – 27:58 | How an offer actually gets evaluated — Most systems work from a board-approved compensation philosophy, then run each physician's facts through it. Kugler contrasts three cases — a physician new to a market, a resident coming out of training and an owner leaving private practice — and walks through how benchmarking decides whether an offer is supportable.
27:58 – 29:17 | Closing thoughts — Not all roles are equal, alignment matters as much as the number and compensation is complicated. Kugler's parting advice: know what you need going in.
29:17 – End | Outro — Austin Littrell wraps the episode.