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Physician-Friendly States


Physicians Practice identified the friendliest U.S. states in which to hang a shingle

A Philadelphia native, plastic surgeon Ronald Downs admits he might not have been able to find Indiana on a map a few years ago. Today, he's the president-elect of the state medical association and says he wouldn't want to practice anywhere else.

"Indiana's been very, very good to us," says Downs, who practices in Elkhart.

How good has your state been to you? Have you ever dreamed of moving your practice to some other part of the country? You're not alone. Doctors often fantasize of moving to a far-flung rural locale, where they think the pace is slower, or to a spot near the beach or in a big city.

Of course, such imagining is not reserved for physicians; people in all walks of life wonder if the grass is greener on someone else's lawn. But with incomes higher than the average professional, and physicians in high demand in many places, practicing doctors have a much greater opportunity to actually transfer, and those leaving residency have a wide array of choices. Meanwhile, with malpractice premiums becoming intolerable in many states, doctors also have greater incentive to choose their location carefully.

But if you're mulling a move or weighing options for a first job, don't book your flight before first finding out the best places to go. Physicians Practice researched the business, regulatory, and legal climates for doctors around the country as a way of identifying the friendliest U.S. states in which to hang a shingle. The results may surprise you.

Indiana was one of four Midwest states that made our short list, along with Oklahoma, Michigan, and Wisconsin. South Carolina also made the list. And four states deserve honorable mentions: Alabama, Alaska, California, and Colorado.

The best states in which to practice medicine have a rare combination of low physician density relative to their populations, insurance markets that are competitive but not overly so, and relatively high reimbursement rates despite manageable costs-of-living.

Data examined included Medicare reimbursement levels, which commercial payers often mirror; the malpractice climate as judged by the American Medical Association (AMA); the federal government's cost-of-living index for the states; and the insurance competitiveness of the states, also judged by the AMA. None of the top states is classified as a malpractice premium crisis state by the AMA; such a distinction was an automatic disqualifier.

Finally, the "soft" tests often used to measure a region's quality of life -- its weather, the quality of its schools, its crime rate, or its proximity to the beach, ski slopes, and fine restaurants and museums -- were not considered. The goal was to find the best places to practice medicine from a business perspective; you'll have to decide for yourself whether these states would also make fun, safe places to live or raise kids.

The top five

The Hoosier State didn't finish at the top of the list in any single category, but it was among the leaders in several and had no striking drawbacks. Though its Medicare reimbursement level was slightly below median, its cost-of-living was even further below median. Only nine states have fewer doctors per thousand people. The competitiveness of its insurance market is low enough that doctors don't feel overwhelmed by the demands of too many payers, yet strong enough that physicians can afford to reject some low-paying or especially burdensome contracts while maintaining robust patient volumes. And Indiana is one of only six states described as "currently OK" by the AMA when it comes to the malpractice climate.

Downs says the Indiana State Medical Society, which represents 5,000 of the state's 8,000 doctors, is another important factor. Its large, active membership helps the organization to be more influential in state politics, making it the envy of states experiencing malpractice crises.

"When physicians are looking to locate somewhere, right now the business climate of a state factors more heavily into their decision than the 'amenities,' so to speak, that perhaps 10 or 15 years ago may have been on the front burner," says Downs. "A few years ago, you could just decide you wanted to be in a warmer climate, or that you grew up in that state and that's where you want to be. But now, with all the stresses on a physician in just running a business from day to day, the business climate has to take priority."

Of Indiana, Downs points to the climate for medical malpractice as being among the friendliest in the nation for physicians. Beyond that, he says, cost-of-living in a city like Indianapolis is lower than similar-sized cities elsewhere, managed-care penetration is reasonably low, and physician-to-population ratios are favorable.
"When you take all those things into account, put them all together, shake 'em up, and see what comes out, Indiana is one of the top five in the country," he says.

His assessment of his adopted home is right on.

The Wolverine State is "showing problem signs" in its malpractice climate, according to the AMA, and its physician density of 2.35 doctors per 1,000 people ranks it a middling 28th. So what makes Michigan a great place to practice? Its combination of reasonable cost-of-living and relatively high reimbursement rates (which is probably driven by its low managed-care penetration). Among the handful of finalist states, Michigan was the only one with a below-median cost-of-living index and above-median Medicare reimbursement. No wonder it leads the country in boat registrations -- people can afford them.

Wisconsin's reputation as physician-friendly is well known and well earned. And because it abuts several "in-crisis" states, it has become a popular refugee camp for physicians escaping their malpractice insurance agents.

General surgeon Mark Andrew, whose practice is in Veroqua, says his group recently interviewed a job candidate who was interested in moving there from Las Vegas. "He was absolutely looking for a way to get out of Vegas and come to Wisconsin," says Andrew, who is a Wisconsin Medical Society past-president.

The Sin City-to-Veroqua transfer may seem odd, but it is increasingly common to see doctors moving from glamour spots to the Badger State.

Wisconsin's malpractice climate and compensation are among the best in the country, and those factors pushed it onto the list, even though its physician density and cost-of-living rates are in the middle of the pack.

But there may be trouble on the horizon. Wisconsin's governor has proposed using money from the state's patient compensation fund to close its budget gap, a move that has doctors there worried because they say it will result in more malpractice lawsuits and higher premiums.

The Sooner State is tied with Alaska for fourth-lowest physician-to-population ratio in the nation, with just 1.81 doctors per 1,000 residents, and that's what makes it a great place to work. That means a physician moving there can almost write his own ticket, especially in the harder-to-find specialties. (Alaska was done in by its high cost-of-living.)

South Carolina
With its warm climate and Southern hospitality, South Carolina is often considered a nice place to live after retiring. But for physicians, it's also a great place to live before retiring -- and it's fiscal issues, not sun or charm, that places the Palmetto State among America's most physician-friendly. Though undistinguished in any particular category, South Carolina was respectably in the middle among the finalists in all of them. Like Michigan, South Carolina has a favorable combination of reimbursement and cost-of-living -- and though no state data on compensation are available, the South is the highest-paying region of the country for physicians, according to numerous surveys.

Consider all the factors

If you're looking, these states are a good place to start. But Kurt Mosley, vice president of the MHA Group, a collection of physician recruiting companies, suggests you consider a range of factors before signing any contract, the most important of which (after compensation) is whether the group or hospital really needs your services.

"We always advise physicians to ... ask why the group is recruiting, and why they feel there is a need for their specialty," says Mosley. "Determining physician need in a community is not an exact science -- it's an art. But it's important for a physician to know how busy he'll be."

Physicians must dig deep to get a true picture, comparing physician-to-population ratios in their specialty and surveying doctors in the group they're considering. They should ask potential new colleagues about their openness to a new physician, says Mosley. And while there are no state-based data available on compensation, physician density tends to correlate conversely with high compensation and other factors important to doctors, such as call flexibility and leniency on contractual details. That's why low physician density is a crucial indicator of a state's physician friendliness -- and why it was a major factor in these rankings.

"In some parts of the country, especially rural areas, practices have no choice but to offer large income subsidies, because if they don't, they won't be able to attract any physicians," says Mosley, referring to the compensation doctors usually receive during their first year or two while they build up their patient volumes. "The practice may lose money on that physician, but in a lot of cases ... the physician won't need the subsidy; he will be able to make that on his own because there's so little competition."

The elimination of those soft quality-of-life issues in favor of economics helps explain why some so-called dream states didn't make the cut. Mainly, they were victims of their own popularity. Hawaii? Too pricey. New York? Too crowded. California was aided by its tort reform, but cost-of-living kept it off our list.

"A lot of doctors think California's great, but cost-of-living is high, Medicaid payments are low [a factor not considered for purposes of this article], and relocation there is just really tough," says Mosley. "It is a very good state in relation to malpractice, but there are all these other factors. We had a doctor relocate to West Virginia. In [California], he had a very nice tract home. When he got to West Virginia, he built his dream home -- because he could. His whole idea was to get out of the rat race, build his dream home, and practice orthopedics. It was a perfect fit."

Bob Keaveney, editor for Physicians Practice, can be reached at bkeaveney@physicianspractice.com.

This article originally appeared in the July 2003 issue of Physicians Practice.

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