Rural Physicians See Higher Average Compensation Than Those in Cities, Suburbs

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The median cash compensation level for physicians in rural areas is higher than that of physicians in suburban and urban settings, according to data from Sullivan, Cotter and Associates.

Kim Mobley, a managing principal at SullivanCotter, says a few factors may contribute to the difference between urban and rural physicians. The difficulty rural hospitals face when recruiting specialists is the underlying issue beneath these differences. "The recruitment process is much more complex. In New York City, you might get 50 applications for a specialist position, but in North Dakota you might only get two," says Ms. Mobley. With slow and difficult recruitment, it can take two to three years for some rural hospitals to hire the right physician. To some degree, rural hospitals may provide higher base compensation to simply attract physicians who may not want to move to rural settings.  

Also, rural areas do not typically have teaching hospitals. "Teaching hospitals tend to pay less because the faculty has a combination of clinical and academic work," says Ms. Mobley. The data on which these figures are based includes teaching hospitals.

Many rural hospitals reflected in these figures may be located in health professional shortage areas, or areas medically underserved. Under Stark Law, hospitals within HPSAs may provide physicians with recruitment incentives. If physicians relocate their practice to the hospital's geographic area, hospitals may offer relocating physicians incentives if they meet certain requirements. "This may include unique forms of payment, such as paying for loan forgiveness," says Ms. Mobley. An emerging practice is to use retention bonuses to retain physicians in this competitive physician labor market.

The following specialties have the largest difference between median rural, suburban and urban compensation levels.

Specialty Rural  Median Suburban Median Urban Median
Anatomic and clinical pathology $345,770 $300,000 $197,795
Diagnostic radiology $478,000 $391,700 $359,090
Radiation therapy $466,130 $373,695 $358,210
General surgery $356,365 $319,815 $280,000
Vascular surgery $426,320 $324,400 $336,700
Infectious disease $227,750 $185,150 $178,675

Data abstracted from Sullivan, Cotter and Associate's 2010 Physician Compensation and Productivity Survey, which contains the largest database of compensation and productivity data on physicians and mid-level providers (over 58,000) in the U.S. The survey was conducted from Feb. through April 2010.

Learn more about Sullivan, Cotter and Associates.

Read more about physician compensation trends:

- 3 Questions to Ask When When Designing an Employed Physician Compensation Plan

- 8 Factors Affecting Ophthalmologist Compensation

- 8 Key Issues for Specialists


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