Doctors' Incomes Are on the Rise -- Is Yours? Medscape Physician Compensation Report 2017

Leigh Page

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April 04, 2017

In This Article

Physicians Earn More in Small Cities, Rural Areas

According to this year's report, doctors can find the highest earnings in the predominantly rural northern Great Plains, where the average income is $317,000, and in the Great Lakes states ($303,000), where small cities proliferate.

In the 2016 report, the northern Great Plains was also the highest-earning region, followed by the Southeast, where much of the population is also in small cities and rural areas. Doctors are in high demand in these areas, pushing up their income.

When adjusted for cost of living, rural doctors earn 12.7% more than doctors in other areas, according to a 2005 issue brief[1]by the Center for Studying Health System Change. However, the study found that rural doctors work longer hours. Rural PCPs, for example, work 5 hours more per week than PCPs in other areas, the center reported.

Small cities have similar physician supply problems as rural areas. In March, Merritt Hawkins released a study[2] on the demand for doctors in 15 selected small cities, including Evansville, Indiana; Dayton, Ohio; Savannah, Georgia; Odessa, Texas; Fort Smith, Arkansas; and Yakima, Washington. The study gauges demand by measuring the amount of time that new patients must wait to get an appointment. It found that the average wait time for these small cities is 32 days, or 33% longer than wait times in 15 large metro areas that Merritt Hawkins measures, which include Dallas, Boston, and Atlanta.

Lower-income regions in the Medscape survey, on the other hand, tended to have an abundance of doctors, such as much of California and the Washington, DC, New York, and Boston metro areas. The lowest-earning region of all this year was the Mid-Atlantic states, at $282,000, followed by the West, at $290,000. Last year, the lowest-paying region was the Northeast.

It's a longstanding axiom: When doctors are crowded into an urban area, demand for them drops and their income falls. However, Singleton says it's also becoming hard to find enough doctors for urban areas.

"In the past 3-4 years, there's been a significant increase of clients in urban areas," he says.

The Medicus Firm, a national physician recruiting firm based in Dallas, has similar findings. In a 2016 release,[3] it stated that, for the first time, its placements in urban and metropolitan areas with populations of more than 500,000 outpaced those in mid-sized and rural communities.

State-Based Income Levels Reflect Physician Supply

As with the regional results, states with the highest earnings in the Medscape report tend to be those with small cities and wide rural areas. The highest-earning states in 2017 are North Dakota ($361,000), South Dakota ($354,000), Nebraska ($346,000), New Hampshire ($337,000), and Alaska ($259,000).

Many of these states have a particularly serious problem with physician supply. They often lack a homegrown source of physicians. Alaska, for example, doesn't have its own medical school, and North Dakota, South Dakota, and New Hampshire have just one medical school each.

Meanwhile, states with the lowest earnings also share a common characteristic: They all have very high rates of people on Medicaid. High Medicaid rates equal low reimbursements.

In the Medscape survey, doctors' lowest earnings are in the District of Columbia ($235,000), Maryland ($260,000), Rhode Island ($261,000), New Mexico ($261,000), and Delaware ($268,000).

This list is almost identical—down to virtually the same order—as the list of states with the highest Medicaid penetration issued by the Kaiser Family Foundation last December.[4] That list goes like this: District of Columbia (40.1%), New Mexico (36.9%), New York (31.9%), Rhode Island (26.7%), Delaware (25.7%), and Maryland (20.3%).

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