The Best States to Practice: America’s Physician-Friendliest States

Steve Mortensen is as surprised as anyone to find himself living and working in, of all places, Wichita, Kan. The Denmark-born rheumatologist came to the United States 34 years ago, spending the first 20 in Southern California. But after halfheartedly picking up a recruiting leaflet while attending a medical conference in the early 90s, he says he liked what he read.

“Then I realized that this practice was in Kansas, and I thought, ‘Weeeellll, maybe not.’”

Today, Mortensen says he and his wife couldn’t be happier with their ultimate decision to move to the Midwest, but his initial reaction is hardly unusual. Physician recruiters for states such as Kansas, South Dakota, Oklahoma, and Indiana agree that their greatest challenge to landing new talent is just persuading doctors even to consider them.

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Perhaps this will help: Those four states, along with Texas, are the most physician-friendly in the country, according to Physicians Practice’s biannual analysis. We examined factors that affect a doctor’s ability to work relatively hassle-free while still making a nice living, and found, as in our previous analyses, that the big flat, open spaces of America’s Midwest outshine the glitzier coastal states as attractive places to practice medicine.

In short, glamour is out, and the heartland is in. Let’s find out why.

We’ve been analyzing the relative friendliness of the states every other year since 2003, and we always get plenty of questions on the subject.

Because we emphasize factors such as malpractice climate, reimbursement, and cost-of-living - and not so-called “quality-of-life” issues, including whether you can find a great steakhouse or a nearby symphony orchestra - we find that the simple-life states tend to fare best. Places like Hawaii, New York, and California may be terrific places to live, but the cost of living is just too high. Also, densely populated states tend to be similarly thick with physicians, diminishing the potential advantages gained from the national doctor shortage.

David Cornett, vice president of the Western region for the physician-recruiting firm Cejka Search, says he isn’t surprised by our selections. “They all have a lot of rural areas, and that means there’s always a need for physicians,” he says. “They do have lower costs of living, and they have lower costs of doing business. Also, those states tend to be less bureaucratic.”

With physicians in short supply, this is a time to be a doctor looking for a job. And more physicians than ever appear to be doing so, according to Kurt Mosley, vice president of business development for Merritt Hawkins, a national physician-recruiting firm. “This is the highest physician relocation rate we’ve ever seen,” he told us, pinpointing the annual rate at perhaps 10 percent or higher; five years ago, it was 2 percent or 3 percent. “And we’re seeing a lot of midlife doctors - baby boomers who are saying, ‘I’ve got to make some more money now while I still have some years left before retirement.’”

Little wonder, says Mosley.

“In states where the need is high, hospitals and other employers are willing to do the things necessary to recruit doctors,” he says. “Every practice and hospital is bending over backward to recruit physicians, because physicians are the most powerful force in healthcare. Without them, no prescriptions get written, no admissions get made, no tests get ordered. That’s something that people are realizing more now than they were maybe 10 years ago, as the physician shortage gets tighter.”

These facts put you in an excellent position if you’re looking for work. (Check out Pamela Moore’s October 2006 article on the lengths to which practices are now going to recruit in “Disappearing Docs.”) On the other hand, once recruited, you’re pretty much stuck with the business climate you chose - which is why it’s important to choose carefully.

Our methodology

To understand how we compiled our list of the physician-friendliest states, it’s best to begin with an explanation of why we didn’t consider the subjective, so-called “lifestyle factors” that are typically the main ingredients of those “best places to live” rankings that populate the general press. We did not take into account how many museums, orchestras, or professional sports teams can be found in one place versus another. We did not compare crime statistics or public school system performance. We could not have cared less about the singles scene, the number of decent restaurants, or air quality.

That’s not to say you shouldn’t care about those things. But there is no particular “lifestyle” that most physicians would agree is ideal. Moreover, plenty of other publications already conduct such rankings - we’d suggest Money magazine’s, found at www.money.cnn.com/best/bplive, and Sperling’s BestPlaces, www.bestplaces.net. Both offer demographic data on hundreds of metropolitan regions and have fun, free interactive tools. As for Physicians Practice, we sought only to identify the best places for a physician to work, and so we considered only physician-specific business factors and cost-of-living statistics.

With that in mind, consider the following:

• Malpractice climate - We disqualified any state considered “in crisis” by the American Medical Association. It’s our view that whatever else it might have going for it, a state whose doctors are being hauled into court at alarming rates, paying knee-buckling liability insurance premiums, and, as is the case in too many places, eliminating higher-risk procedures from their practices or even quitting medicine altogether, just can’t qualify as an excellent place for doctors. The widespread malpractice crisis makes your job harder, but it made ours easier, with a whopping 21 states currently considered “in crisis.” We also awarded unquantified extra credit to those states whose malpractice climates are characterized as “currently OK” by the AMA. Alas, only six states qualified.

• Physician-patient ratios - In our analysis, a lower ratio is better. Using an examination conducted last year by the New York Center for Health Workforce Studies (based on 2004 data by the U.S. Census Bureau, the AMA, and the American Osteopathic Association), physician-patient ratios affect a range of factors, from physician salaries to contract flexibility. With physician fee schedules freefalling at a distressing rate (see Physician Practice’sJanuary cover story on the subject), physician-patient ratios are more important than ever in determining physician quality-of-practice. The consolidation of commercial payers is putting a squeeze on practices: Where you once had some flexibility to negotiate rates with payers, your ability to do so is now being rapidly diminished by the declining number of payers with whom you have to negotiate. Having fewer physicians in your area - and thus fewer competitors with whom your payers can negotiate - increases your leverage.

• Cost of living - Using data from the second quarter of 2006, the U.S. Bureau of Economic Analysis indexes the states against one another, with a median score of 100; the higher a state’s score, the higher its cost of living. Thus, a lower score is better. For example, Hawaii scored 161.3; Oklahoma, 88.5.

• Reimbursement - Medicare uses a similar indexing system for its Geographic Adjustment Factor. Hawaii’s adjustment factor in 2006 was 1.044; Oklahoma’s, 0.913. Commercial payers often tie their reimbursement rates to Medicare. Note that as the government reports scores for large metropolitan areas, some estimating was required for states with multiple metro areas. For our analysis, the higher the score, the better.

• Cost of living/reimbursement margin - These measures are closely linked; neither can be examined in a vacuum. Oklahoma wins consideration for its low cost of living, but the government takes note of that, and adjusts its reimbursements downward. Private payers follow suit. But this adjustment is not dollar-for-dollar. Some states have costs of living that are relatively high or low in comparison to reimbursement rates. We evaluated and contrasted both of these indices to gain a sense of which states actually fared best.

Finally, an acknowledgment of what by now must be fairly obvious: Selecting America’s most physician-friendly states is a subjective and imprecise task, and the methods we employed, though fair, are nonetheless admittedly unscientific. We recognize that factors affecting your particular quality of practice - and life - will surely include many additional variables - most obviously your specialty, which could have a huge impact on reimbursement, physician density, and malpractice climate. And, of course, your primary consideration should be the merits of any specific offer made to you by a particular practice, as well as that practice’s culture, efficiency, philosophy, and so on.

Still, use our list of friendliest states as a helpful starting point if you’re a physician considering a move (or one looking for your first job), as a way to compare the conditions in your own state with those in more “ideal” states, and as a platform on which to discuss business climate issues with patients, policymakers, and colleagues.

And now, on to the list.

Don’t mess with …

Texas’ appearance on our list surprised us a bit. Only a few years ago, the Lone Star State’s malpractice climate was described as “in crisis” by the AMA. But a new law, passed with the assistance of the very active Texas Medical Association (TMA), established caps on noneconomic damages - money for pain and suffering - that plaintiffs can win in a malpractice suit. The law is having a significant impact, physicians there say. “I think the liability climate is one of the best, especially for physicians,” says Ledon W. Homer, a Fort Worth pathologist and the TMA’s president. “I would even brag (as Texans often do) that the TMA is one of the reasons [for the change in the law].”

In general, Texas is a pro-business state, so the change in the law is not completely unexpected. (The state went so far as to amend its constitution to avoid legal challenges that might have struck down the new protections.) Christopher Crow, a partner with Family Medical Specialists of Texas (FMST), a primary-care group that won Physicians Practice’s 2006 Practice of the Year competition, says his malpractice insurance premiums have declined 30 percent since the law took effect. “That’s the kind of thing that says to physicians, ‘This is a safe place to practice, from a liability standpoint,’” he says.

Crow, too, credits the TMA for providing crucial leadership on important medical-legal issues. But he cautions that not all doctors in Texas would agree that their state is a great place to practice. For starters, the sheer size of Texas makes it difficult to quantify singularly. Medicare carves the state into eight distinct geographic areas for reimbursement-adjustment purposes. This means that physicians in poorer areas might experience greater challenges than those in well-heeled places like Plano, where Crow practices. Still, taken as a whole, Texas ranks as the country’s third-least-expensive state in which to live. Yet the government barely notices; it adjusts Medicare reimbursement only slightly downward.

And the rumors of Texas having its own unique culture are true, by most accounts. (Whether this is a good thing or a bad thing is up to you to decide.)

“We’ve found that a lot of doctors who relocate and never go back have gone from California to Texas,” says Mosley. He made this exact move himself 15 years ago, and he found the stories of a unique Texas culture to be accurate. “One of the first things I saw was a bumper sticker that said, ‘I’m from Texas. What country are you from?’ And it really is like its own country.”

Repeat performance

Indiana is one of only two states to appear on our list all three times we’ve conducted this analysis. What’s so great about the Hoosier state?

In truth, it didn’t really blow us away in any particular measure. Rather, Indiana proved its overall worthiness based on a number of factors: Its malpractice climate is rated as “currently OK,” which is as respectable a rating as the AMA gives, its cost of living is reasonable at the 12th-lowest in the nation, and for every 100,000 residents, it has a relatively low density of physicians - between 180 and 200. And while it wasn’t part of our official analysis, Kurt Mosley notes that Indiana may actually be a more rewarding place to live than it usually receives credit for. “One thing that’s kind of unique about Indiana that a lot of people don’t really know about is that it really has a lot of great universities,” he says. “Notre Dame, Purdue, Indiana University, Valparaiso, Ball State. People don’t really think of Indiana as an academic university kind of place, but it is.”

Geographically, Indiana finds itself in the unique position of being the only “currently OK” state that shares boundary lines with three malpractice “in crisis” states - Illinois, Kentucky, and Ohio. Unsurprisingly, border residents of those states commonly choose to practice in Indiana.

The other three-time winner? Oklahoma, whose rock-bottom cost of living and comparatively low physician density rate of as few as 150 physicians per 100,000 residents - among the 10 lowest in the country - can’t be ignored. Unfortunately, the government has taken note of the Sooner State’s low cost of living, adjusting its reimbursement rate downward somewhat. Still, this negates Oklahoma’s advantage only slightly.

“We have the same reimbursement problems that doctors across the nation have,” says David Russell, a radiologist from Enid. But he agrees that physicians tend to think Oklahoma is “in really good shape on medical liability,” in part because of a law that offers liability protection to high-risk physicians in obstetrics and emergency medicine. Russell says the state medical association is lobbying the legislature hard to extend the protections to all physicians.

There’s no place like …

Folks like Linda Warren and her husband have been the only doctors in Hanover (population 700) for decades. It can be grueling: They’re on call 24/7, they have to find a locum tenens replacement whenever they want to go on vacation, and they earn less money than they would in a more urban location.

I do pretty much everything,” Linda Warren says. “I do obstetrics. I still do anesthesia, internal medicine, pediatrics, gynecology, critical care. I take care of whatever walks through the door. We have to hire someone to come and cover our practice when we go away. Right now the hospital pays for that, but it’s not easy to find someone.”

Still, the Warrens side with Dorothy and Toto in appreciating Kansas’ charms.

“It has allowed me, as a woman, to be the kind of professional I want to be, while being the kind of wife and mother I wanted to be. I could take off for an afternoon for a school function or a soccer game,” says the 62-year-old Warren. “And the other thing is, in a rural setting you really do get to know your patients. And they get to know you. It’s a very intimate relationship. Your kids go to school together. You might sit next to each other at church. It builds trust. And it’s far more of a blessing than anything else.”

It wasn’t its small-town environment that put Kansas on our list. Instead, its seventh-lowest cost-of-living, low physician density, and not-too-shabby (though not quite spectacular) reimbursement were the deciding factors. However, several physicians in a number of our physician-friendliest states report that the biggest advantage to their location is the people. No disrespect intended, East- and West-coasters, but heartland folks just seem, well, nicer. “I would concur with that,” says Cornett. “It’s a more traditional relationship. There’s more respect for physicians. There’s a greater willingness to trust.”

Mortensen, who is president-elect of his local medical society in Wichita, says his favorite thing about Kansas is Kansans. “The people are a delight to serve,” he says. “There’s just a different patient personality here. That’s not to say there aren’t nice people in California; there certainly are. But it’s different here.”

The patients aren’t the only ones who are different. Midwestern practices tend to have better-than-average physician retention rates, says Cornett, “and if you look at the components of what makes a good recruiting process, I think they’re more prevalent in the Midwest. And I think that’s because they’ve had trouble recruiting in the past, so that’s made them work harder. It’s forced them to be more personable.”

Mortensen agrees that there is very little politicking among the physicians in his group.

The advantageous economics also make Kansas a great place to be a doctor, Mortensen says. “Prices make a difference. You can get a really nice home for a lot less than you’d pay in California, that’s for sure.” And while the liability climate is still “showing problem signs,” according to the AMA, Kansas does have a $250,000 cap on noneconomic damages, which Mortensen calls a “nice little safety valve.”

“It doesn’t mean you don’t pay for the things that really do go wrong. But it’s nice that we don’t have those really excessive judgments that you get in other states.”

More than Mt. Rushmore

“South Dakota is friendly [to doctors] as far as the malpractice climate,” says Tony Berg, a family physician in Winner. “We have the [noneconomic damages] cap. But it’s also a matter of supply and demand: Our supply of physicians is fairly low.”

South Dakota’s supply of patients is pretty low, too - Berg’s says his town would have to get bigger to be rightly called rural, and is more properly described as “frontier” - but overall the Plains state remains one of America’s least-dense with doctors per capita. It also has the ninth-lowest cost of living.

What’s more, Berg says his state is a great place to gain what many doctors want: control. With so few physicians around, Berg says he has almost complete autonomy in terms of the way he treats his patients.

“If I were in a bigger place, I’d probably be working fewer hours,” he says, “and I might be making more money. But my personal satisfaction in what I’m doing would be lower - and having control of my own destiny would not be as great. I’d be told what to do by hospital people and managed-care people, and I guess I have that frontier mentality. That’s a big thing with me: I like to be in charge of myself. And I’m not doing too badly. I have some investments. And I paid income tax last year on more than $200,000. So I guess I’m doing OK.”

P. Kenneth Aspaas Jr., an internist in Sioux Falls, agrees that South Dakota’s practice climate is “very favorable.” The state’s largest city, in particular, has most of the medical technology available to physicians in bigger towns. And then there are the people, who, Aspaas says, “tend to listen, tend to treat doctors with respect, and tend to pay their bills.”

But like so many of its Midwestern brethren, Aspaas says the state’s image is its biggest recruiting hurdle. “Just getting them to come here, just to consider us,” he says. “Once we get them here, they like it. They like our lifestyle. We have a lot of converts from the East and West coasts who found themselves very happy here. If we can get them to come, they usually enjoy it - despite our winters.”

Consider what matters

Don’t get us wrong. We’re not suggesting you pack your bags and move to Topeka or South Bend. We do suggest, however, that if you’re ready to move - and more of you than ever, it seems, are - start your search by asking yourself what you’re looking for in a practice setting and lifestyle, and then look for areas that meet those needs. Many physicians start with a place in mind, and then hope for the best, which is exactly the wrong way to proceed, says Mosley.

You may have familial or some other personal connection to a particular area; that’s fine. But if you’re just trying to indulge a fantasy by, say, insisting on practicing in Hawaii, then you’re possibly setting yourself up for disappointment, he says: “I say, ‘Stop, and tell me what you really want, doc - not Hawaii - but what do you want in a practice model?’”

Consider the practice’s size, compensation model, call-coverage policies, opportunities for partnership, and culture. Think also about how well-run the practice seems. For example, ask about average patient wait times (more efficient practices tend to have shorter waits) and about its use of information technology.

If after all that - and more - you conclude that the perfect place for you is indeed in Waikiki, terrific. And if it’s in, say, Sioux Falls? All the better.

Bob Keaveney is the executive editor of Physicians Practice. He can be reached at bkeaveney@physicianspractice.com.
This article originally appeared in the February 2007 issue of Physicians Practice.