Compensation: Are Physicians Better Off Now Than 6 Years Ago?

Carol Peckham


April 01, 2016

In This Article

Location, Location

This year, the highest earnings were reported in the North Central ($296,000) and Southeast ($287,000) regions, whereas the lowest were in the Northeast ($266,000) and Mid-Atlantic ($268,000) regions. Geographic supply and demand continue to play a role in compensation. Uneven distribution of physicians to patient volume, particularly in primary care, has been a problem for decades in rural and poor communities.[7] Numerous government policies are aimed at improving access to physicians in these areas. As a result, higher incomes are found in these regions.[8]

Nevertheless, according to Travis Singleton of Merritt Hawkins, "Although government programs certainly influence physician compensation, it is largely socioeconomics and competition that drives compensation on a macro scale. Rural markets tend to have standard fee-for-service arrangements that drive compensation higher. However, we are seeing the compensation gap between rural and urban areas diminish. Where it was once routine to see salaries 10%-15% higher 2-3 hours outside of the metropolitan market, now you see urban markets with large delivery systems raise salaries to level the playing field. The demand is no longer just a 'rural' problem. In turn, that has caused smaller, more rural markets to add more compensation via salary, signing bonuses, and loan forgiveness."

Compensation by States

Top-earning states. The weather may be less than inviting, but the pay may make up for it. In line with government efforts to attract more physicians to rural and poor areas, the three top-earning states in this year's Medscape report are North Dakota ($348,000), New Hampshire ($322,000), and Nebraska ($317,000). Last year, this also held: The top earners were located in North Dakota, which was then tied with Alaska (both at $330,000), followed by Wyoming ($312,000). Travis Singleton of Merritt Hawkins observed, "The oil boom in North Dakota has been driving demand and compensation for physicians in this state through the roof, but with current oil prices that trend can be expected to cool considerably. As a largely rural state, Nebraska has traditionally seen relatively high physician compensation, whereas New Hampshire has not and high compensation numbers there may be a 1-year anomaly."

Low-earning states. The same three states/areas held the dubious distinction of ranking at the bottom in terms of compensation this year as last year. In this year's report, the lowest-paying locations are Rhode Island ($224,000), District of Columbia ($226,000), and Maryland ($231,000), all on the East Coast. In last year's Compensation Report, similarly, physicians fared worst in the District of Columbia ($186,000) and Rhode Island ($217,000). Still, despite these states' low ranking for compensation, Maryland was the only one of the three that showed a decline in income this year (from $237,000).


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