A Doctor’s Guide to Their Ideal Practice Location

As the average US population continues to age, the demand for physicians is outpacing supply.

According to a report released by the Association of American Medical Colleges, demand for doctors from 2013 to 2025 is projected to grow 17%. By 2025, this demand for physicians may exceed supply by a range of 46,000 to 90,000.

Clearly, there are many negative consequences to this scenario if it holds true. Restricted access to quality care for the patients, and overworked doctors are just two such examples.

But from a purely economic standpoint, it’s a good time to be a healthcare professional.

A growing healthcare market, along with increasing disparity between supply and demand, means that physicians have remarkable flexibility when choosing where they want to practice medicine.

Better States Than Others

Of course, excess demand for physicians will not be symmetrical across the country. The healthcare industry is enormously complex. Local market factors, combined with constant changes to government reimbursement programs and private insurance policies, mean that some areas of the country will always be more favorable than others.

Online medical publications, such as MDLinx and Medscape, routinely compile reports ranking the “best states to practice medicine.”

Each list is slightly different. They rank states according to a number of different factors, but most try to accurately capture the variables that correlate to a physician’s quality of work and home life. These include statistics such as cost of living, physician density, tax burden, and professional liability.

The following states were included in the top 10 of both sources mentioned above for best states to practice medicine in 2018:

• North Dakota
• Iowa
• New Hampshire
• Colorado
• Minnesota
• Utah

Preparing to Relocate

If you are preparing to relocate, lists such as these can be helpful in prompting a more detailed search.

Obviously, no doctor is going to choose where they relocate solely on the basis of such reports. There are so many other factors to consider, and each person is unique.

For some, staying close to family is important. Others might choose to base their decision on the cost of living and the state tax code. Outdoor activities, entertainment in the city, and finding a good school district for your kids are all worthy considerations as well.

No simple list online is going to be able to make the decision for you.

But what they can do is give you a starting point. Talking through all considerations with a trusted adviser can be helpful in clarifying what move is best for you.

Moving Considerations

Here’s a short list of moving considerations that you can use to help brainstorm what aspects of moving are more or less important to you:

1. Cost of Living

It’s no surprise that some parts of the country are more expensive than others. The average neurologist earns $244K per year. That’s a very attractive salary by most standards, unless of course you’re trying to buy a house in San Francisco. You may wish you were an orthopedic surgeon if you have your heart set on the Bay Area.

The higher cost of living in a metro area may force you to adopt a tighter budget than practicing in a more rural setting.

The Missouri Economic Research and Information Center has a helpful cost of living map to help you compare each state.

2. Healthcare Environment

If you’re in the business of healthcare, it’s wise to do investigate the local market as it will probably affect your ability to earn a decent wage.

Some questions you may want to answer would include:

• Who are the dominant payers?
• What is the patient demographic?
• Is your specialty in demand?
• What is the average compensation for your specialty?
• What is the physician density?
• How does the cost of malpractice insurance compare?

Sources of Information

For medical insurance, the Henry J Kaiser Family Foundation has a helpful data table that shows the top three health insurance providers by state.

If you’re a cardiologist, the demand for your services may be greater in the southern states where the number of deaths from cardiovascular diseases is highest in the country. The Institute for Health Metrics and Evaluation has an interactive map of the country to help you identify patient health demographics.

A 2017 report compiled by the Association of American Medical Colleges has data on the physician density by state. Broad data like this, as well as understanding the number of practitioners in your local area and the population, can give you a good indication for the level of competition you might expect.

Finally, Doximity’s Career Navigator is a nifty tool for investigating expected earnings. It shows physician compensation and housing cost data trends by county and specialty.

3. Entertainment

Your quality of life outside of work is very important to your health, happiness, and avoiding burnout. For many doctors, entertainment plays a significant role in their choice of location.

Does the area have a sports team you might like to watch? Is there a good live music scene? How about the cuisine?

Searching for events on Yelp or Eventful in the area you’re considering might help give you an idea for what kind of entertainment, restaurants, and nightlife you can expect.

Of course, it also wouldn’t hurt to plan a vacation and check it all out for yourself.

4. Weather

The local climate will probably be a big consideration if your hobbies include outdoor activities.

If you’re the type who likes to mountain bike in the summer and ski in the winter, those hobbies will be much easier to maintain while practicing in Colorado or New Hampshire than it will be in Florida.

5. Taxes

State tax laws are not the same. Big differences across state lines may have a surprising impact on your paycheck.

All else considered, if you’re goal is to maximize your career compensation, then a firm understanding of how the tax law differs across borders is an important conversation to have with your accountant.

To start, Smart Asset has a handy state income tax calculator that you can use with some basic assumptions to estimate what your tax burden may be.

Conclusion

The factors we mention above are not an all encompassing list, but hopefully it got you thinking about the different things you should consider when you plan to relocate for your medical or dental career.

Ideally, you want to find a location that can support the needs of your business, as well as fulfill your interests and hobbies. Because each of us have different priorities, a universally “best state to practice medicine” really doesn’t exist.

Be skeptical of lists compiled online that promote one state over another. We represent clients all over the country who have done very well in business and enjoy what they do.

Make sure you identify what factors are most important to you, and then talk them over with a trusted adviser.