MANAGED CARE July 2005. ©MediMedia USA
Although lower income in rural areas is often cited as an obstacle to recruitment of physicians, one study suggests rural and urban areas do not differ significantly — at least, in terms of income. Moreover, after adjusting for differences in cost of living, hours on the job, specialty, and other factors, rural doctors on average have 13 percent more purchasing power than their urban counterparts, according to the Center for Studying Health System Change.
Although average annual physician incomes are somewhat lower in rural areas than in urban areas — $204,000 vs. $218,000 — the difference is not statistically significant. Further, average physician incomes differed little between rural counties adjacent to metropolitan areas ($201,000) and those farther away ($212,000). Again, not statistically significant.
The big difference is in the cost of living, which is lower in rural areas. Rural physicians actually have significantly more purchasing power — higher real incomes — after accounting for the lower cost of living. The average income of rural physicians, when adjusted for the cost of living, was $225,000, compared to $199,000 for urban physicians.
Urban and rural incomes by specialty
Income adjusted by cost of living
Source: Community Tracking Study Physician Survey, Center for Health System Change