Type of Practice Greatly Affects Income
Despite the challenges to private practice, it may be where the money is. A physician partner in a private practice earns a mean of about $308,000, significantly more than employed doctors, who earned a mean of $194,000 in 2011, similar to the prior year's figure. Physicians in single-specialty group practices were the next highest earners.
"Physicians are motivated by accountability," said Aburmishan. "So 5 or 6 doctors can sit around a table and eyeball each other to discuss cases and productivity. Solo doctors often can't measure themselves against anyone. In large group practices of more than 50 doctors, administrators have a greater role. Generally, small group practices do better at letting doctors hold each other accountable for working at an equal level."
Private practice physicians also have greater incentive to be busier than hospital-employed colleagues.
Location Matters, Too
Just as in last year's survey, the highest-earning physicians practice in the North Central region, comprising Iowa, Missouri, Kansas, Nebraska, and South and North Dakota, at a mean income of $234,000, up slightly from 2010. The next highest earners are doctors in the South Central and Great Lakes region ($228,000). Physicians in the Northeast earn the least, at a mean of $204,000.
Less competition among physicians in smaller communities and rural areas is a factor in boosting that region's income. Smaller communities have to pay more to attract physicians. "In Chicago, for example, the supply of orthopedic surgeons is huge," said Aburmishan. "If you go to Springfield, there aren't that many orthopedists. So insurers have to pay better to make sure patients are covered."
Also, with fewer specialists in rural areas, primary care physicians often perform more services than in the rest of the country.