Interesting analysis regarding geographic impact on physician salaries (vs. lawyer salaries).
https://www.washingtonpost.com/business/2023/08/11/doctor-pay-geography/
https://wapo.st/3OQLMB5 (Gift link)
1 Like
Quick answer from the linked page: there are fewer physicians per population in rural and poorer areas so that (a) they have less competition, and (b) Medicare tries to entice more physicians to go to those areas and therefore has a reimbursement formula that is favorable to physicians in those areas.
3 Likes
They really have to work to attract doctors, especially specialists. I had a high school friend who ended up practicing in Fargo because they offered her a debt-relief deal.
6 Likes
Are the populations in north and South Dakota generally older than average so higher Medicare reimbursements would tip the scales as far as choosing where to practice?
1 Like
My general takeaway is that doctors are one of the most highly compensated professions regardless of geographic location and we need more medical schools and residencies.
1 Like
https://www.kff.org/other/state-indicator/distribution-by-age/?currentTimeframe=0&sortModel={"colId":"Location","sort":"asc"} lists age distributions of the various states. It does not look like ND and SD are among the more extreme outliers (ND has a slightly lower percentage of 65 and older compared to the US population, while SD has a slightly higher percentage of 65 and older).
1 Like
They need to offer higher salaries to attract folks. I’m not a doctor, but I was offered a job in Montana very near the Canadian border when I graduated undergrad that pad well over four times the salary of any other job I even considered. I didn’t want to move to Montana, but they sure tried hard to recruit me.
6 Likes
It all has to do with negotiating power. When doctors band together into enormous billing groups, they can negotiate higher reimbursement from insurers.
Bonus for S Dakota. No state income tax.
4 Likes
Nowadays, most young physicians…of either sex and straight or gay…have partners who have careers of their own. In the last few years, working online may have increased options for physicians’ spouses in places like the Dakotas. In general, though, rural communities offer fewer employment options for non-physician spouses. Most young couples need to find two jobs in which both of them will be satisfactorily employed.
Even if you are both doctors, finding two jobs within commuting distance of each other can be hard.
And, if you are not yet married, dating can be very difficult.
5 Likes
Parent of a physician here. The doc would rather work for peanuts than move where the SO would have no employment opportunities.
9 Likes
Is Medicare reimbursing doctors significantly more in the Dakotas and other rural underserved areas than they do elsewhere? I think the article is overlooking the role non profit health care systems play in all of this. By and large, it is not private practices that offer the way above average physician salaries. The non profits are not paying taxes in addition to receiving state and federal funding. They have the ability to entice doctors with higher pay and offers to pay off student debt that the private practices can’t. The people we knew who took those high paying jobs in underserved areas all went to work for non profit health care systems.
As an aside,my husband’s practice in an urban area was recently taken over by a non profit hospital system. Medicare and insurance reimbursement hasn’t changed. He is making more than twice what he was before.
1 Like
I know a physician who is in the Dakotas because of a visa issue. Foreign National but as a condition of their visa needs to practice in an underserved area.
Supply and demand. It’s a career where those in demand areas of the country can offer less than areas where there is a huge need.
Since most physicians are employed and salaried, I don’t think it’s reimbursement but more what the hospital system is willing to pay them. If you have tons of loans to pay off, then taking a short term contract in an area that will pay those off in a hurry is a big incentive.
There is also incentive to make a pile of cash serving out a contract while applying to fellowships also.
There is a big elephant in the room now and I wonder if it’s going to be much much harder to entice physicians to particular areas of the country. No matter how much money they offer.
1 Like
Absolutely this is simple supply and demand. I read this article and my reaction was, “well duh?” 
Why is anyone surprised that you would have to pay physicians more to go live in the middle of nowhere? Why is anyone surprised that lawyers would make less money in a rural area where their services aren’t in demand? Did we really need a study done to tell us this?
6 Likes
Also, if you’re a foodie, living and working in the Dakotas might not be your cup of tea because it might be a bit hard to get some pad Thai or Indian food delivered by Uber Eats or Door Dash.
Go look up the average temp in Fargo for Jan and Feb and there’s your answer as to why the health systems in the Dakotas have to offer a premium to physicians to work in those states.
1 Like
I don’t think it’s just weather that creates the shortage and thus higher salaries in the Dakotas.
If it was JUST unpleasant weather for a couple of months, it would be hard to find doctors in places like Phoenix where it has been well over 100 degrees daily most of this summer. BUT Phoenix is a large metro area with many hospitals and a large population with lots of services and things to do.
4 Likes
I don’t think it’s just winter weather that is causing this shortage.
Minneapolis, Traverse City Michigan, Rochester New York, Portland Maine. All cities (towns) that have WINTER but don’t have the same problems recruiting physicians.
Some of it is lack of an urban center, lack of employment opportunities for spouses. It may be reputation. It may be that travel (airports) are harder to get out of. It may be lack of diversity.
Saying all this, it’s not just weather.
8 Likes