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Stroudwater Associates Releases 2025 Rural Provider Compensation Report

In a significant development for rural healthcare, Stroudwater Associates has unveiled its findings from the 2025 Rural Provider Compensation Report, produced in collaboration with the National Rural Health Association (NRHA) and the National Organization of State Offices of Rural Health (NOSORH). The report, based on surveys received from 197 healthcare providers across 41 states, paints a concerning picture of compensation practices that could threaten the financial viability and compliance of rural hospitals.

Jeff Sommer, Managing Director of Stroudwater Associates, emphasized the critical need for rural hospitals to rectify provider compensation imbalances. According to Sommer, “Provider compensation in rural hospitals remains misaligned with best practices—creating both financial and compliance risks.” With looming cuts to Medicare and Medicaid, aligning compensation strategies with sustainable benchmarks is imperative.

Key Findings from the Report

The report revealed several important trends regarding rural provider compensation:

1. Lack of Incentive-Based Compensation: A notable 43.7% of surveyed providers are paid a straightforward salary with no performance or quality incentives, a decrease from 54.7% in 2024. This shift suggests a gradual acceptance of alternative base-plus-incentive models.

2. Narrowing Compensation Variability: The data indicates that compensation variability in primary care is decreasing. This trend is largely attributed to rising salaries at the lower end, particularly among family medicine physicians who do not provide obstetrics. The average total compensation for such providers is reported to be under $343,000, but a significant spread exists, ranging from $240,287 to $465,000.

3. CMS Fee Schedule Awareness: The findings highlighted that no organization utilized the current CMS physician fee schedule for determining work Relative Value Units (wRVUs). Alarmingly, over half of the organizations surveyed were unaware of which CMS physician fee schedule they were applying.

4. Shortages Intensifying Compensation Issues: The shortage of anesthesiologists and Certified Registered Nurse Anesthetists (CRNAs) has exacerbated compensation growth, with median pay rising by 14% for anesthesiologists and 11% for CRNAs from 2024.

5. Patient-Facing Hour Requirements: Nearly half of the organizations do not mandate patient-facing hours, with around 42.4% having no such requirement, while 38% have requirements that fail to align with industry standards.

6. Encouraging Continued Participation: Stroudwater Associates plans to regularly update and distribute this survey at no cost, urging rural healthcare organizations to take part in the future studies to aid ongoing improvements in provider compensation practices.

Moving Forward in Rural Healthcare

The findings of this report carry significant implications for the future of rural healthcare providers. Alan Morgan, CEO of NRHA, noted that understanding the unique compensation needs of rural providers is essential for their success and the sustainability of rural healthcare systems.

Stroudwater Associates reinforces its commitment to supporting rural healthcare, providing the necessary insights to guide evidence-based decision-making regarding physician and advanced practice provider compensation. For interested parties, the complete report can be downloaded from Stroudwater’s website, and a webinar discussing the insights is scheduled for December 3rd at 2 PM EST.

The landscape of rural healthcare is shifting, and as compensation models evolve, those within this sphere must adapt to ensure financial sustainability and continued quality care for underserved populations.