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Physician Salary Trends in 2025 and What’s Coming in 2026

• January 6, 2026
• 5 minute read

Key Takeaways (TL;DR)

• Base salary alone is losing effectiveness in recruitment.
• Sign-on bonuses are standard in new contracts.
• On-call compensation is rising and often unbundled.
• Lifestyle perks and telehealth options drive acceptance.
• Geography matters less than total compensation.
• High-demand specialties (e.g., cardiology, radiology) are up; others down.
• CMS’s 2026 fee schedule will shift pay by setting and model.

Physician pay continues to rise, but higher salaries alone are no longer enough to attract or retain top talent. Hospital administrators face mounting challenges as compensation expectations shift, some perks become standard, and federal payment policies reshape the landscape. Here are the most important physician salary trends in 2025—and what you need to prepare for in 2026.

Why Base Salary Alone Won’t Seal the Deal

Hospitals traditionally set salaries based on fair market value. However, with shrinking applicant pools and competition from private equity–backed provider groups, that approach is becoming less effective. Physicians want more than just a paycheck. Paid time off, flexible schedules, and compensation for on-call duties are increasingly part of negotiations. Hospitals that rely solely on higher base salaries risk losing qualified candidates to more creative offers.

Bonuses, On-Call, and Lifestyle Perks

Sign-on bonuses have become less of a perk and more of an expectation. While the median bonus amount hasn’t changed much, many new contracts now include bonuses as standard practice.

On-call compensation is rising fast.

On-call requirements have long been part of physician contracts, but expectations are shifting. Physicians now demand reduced or eliminated on-call duties or higher pay when they agree to take call. What used to be bundled into overall compensation is now treated as extra pay.

Paid time off and lifestyle perks are in demand.

Traditionally, physicians accepted standard vacation packages and often left days unused. Today, doctors are negotiating for additional paid time off and fully intend to use it. This reflects a move from production-driven models to work-life balance. Continuing education reimbursement, flexible schedules, and wellness benefits are also becoming non-negotiable.

Telehealth options are a key perk.

Telehealth isn’t just a pandemic-era tool; it’s now a recruitment advantage. Many new physicians want the option to provide care virtually, seeing it as a way to balance professional demands with personal life. Hospitals that offer telehealth flexibility will stand out in competitive markets.

Geography matters less than compensation.

Location used to be the top factor in physician recruitment, as physicians often choose jobs near family or hometowns. However, in 2025, salary outweighed geography. Many candidates won’t even consider a position unless compensation meets expectations. Rural hospitals, despite often offering higher median pay than urban counterparts, continue to struggle with recruitment.

What’s Driving Pay by Specialty

Salary increases are concentrated in high-demand specialties. According to research published by the American Medical Association (AMA), the five most sought-after fields in 2025 were: 

• Hematology/oncology 
• Gastroenterology 
• Endocrinology 
• Cardiology 
• Radiology 

Year-over-year changes (e.g., cardiology +18.7%, radiology +11.3%, ENT +36%)

These specialties are difficult to staff, and salaries reflect that. For example, cardiology compensation jumped 18.7% year over year, while radiology rose 11.3%. Otolaryngology saw the largest increase—36%—due to limited residency training slots and high retirement rates among current practitioners, according to the AMA.

Declining specialties (orthopedics −16%, pediatrics −8.5%, neurology −10.1%)

Not all fields are seeing growth. Orthopedic surgery salaries dropped 16%, pediatrics fell 8.5%, and neurology declined 10.1%. These decreases highlight the uneven landscape administrators must navigate. While average starting salaries across all physicians dipped slightly to $403,000 from $406,000, the variation by specialty remains significant, according to AMA reports.

Physician Demographics Add Pressure

A large portion of the physician workforce is aging. In many specialties, 40% or more of candidates are over age 55, according to the Association of American Medical Colleges (AAMC). With retirements looming and limited residency slots in certain fields, hospitals must compete harder for younger physicians. This demographic shift is one reason salaries in high-demand specialties continue to climb.

Financial Pressures on Hospitals

Hospitals face higher operational costs, lower reimbursements, and staffing shortages. Looming Medicaid funding cuts will make it harder to sustain historically high physician wages. Administrators must balance competitive offers with long-term financial sustainability.

2026 Outlook: CMS Medicare Physician Fee Schedule

While 2025 has been defined by rising salaries, sign-on bonuses, and lifestyle-driven negotiations, 2026 is already shaping up to bring structural changes that administrators cannot ignore.

CMS has finalized the 2026 Medicare Physician Fee Schedule, which includes a 3.26% increase in rates for all physicians. Physicians in Advanced Alternative Payment Models (APMs) will receive a slightly bigger boost at 3.77%. Independent office-based physicians are projected to gain modest increases (around 4%).

At the same time, specialists in hospital outpatient departments, nursing homes, and ambulatory surgery centers could face cuts of 7% or more. These uneven adjustments mean facilities must tailor compensation strategies by specialty and practice setting.

Success in 2026 will depend on balancing competitive offers with sustainable practices, and recognizing that compensation packages must evolve beyond the paycheck.

Actionable Recommendations for Administrators

• Build total‑rewards packages beyond base pay.
• Introduce explicit on‑call pay tiers by specialty and call burden.
• Provide telehealth scheduling options and wellness benefits.
• Align offers with CMS 2026 changes by practice setting.
• Plan for demographics: succession pipelines and early‑career incentives.