One of the basic concepts of a free market is supply and demand. The scarcer the supply of a good or service, the higher the price. We see this all the time in our daily lives. Have you ever needed to call an electrician or plumber at midnight for an emergency? You’re at their mercy.
Although physicians like to think they’re special, the truth is we’re not. At the end of the day we provide a commoditized service to paying consumers. The American healthcare system is far from a free market, but we are still subject to the laws of supply and demand.
Today we’re going to look at some
nerdy fun statistics and see how this plays out across the country.
Physician Workforce by State
The distribution of doctors across the country is far from symmetric. I took the AAMC 2017 State Physician Workforce Data to see just how much this varies from state to state. The results were surprising. There is more than a two-fold difference between the state with the highest concentration of doctors vs. the lowest.
Top 5 States (Physicians per 100,000 residents)
- 1. Massachusetts 443.5
- 2. Maryland 377.8
- 3. New York 365.1
- 4. Vermont 357.5
- 5. Rhode Island 356.9
Bottom 5 (Physicians per 100,000 residents)
- 46. Arkansas 203.7
- 47. Nevada 200.1
- 48. Wyoming 199
- 49. Idaho 192.6
- 50. Mississippi 186.1
If you were to map all the physicians across the country, it would look something like this:
Looking at this map you would have to assume that oceans were very hazardous for your health. Clearly the people living on the coasts need more doctors.
Income by State
I next looked at Doximity average physician salary data to see what the average physician earns in all 50 states. Obviously there is a wide range of salaries amongst the different specialties, but this data gives you an overall picture of how your zip code impacts your paycheck.
- 1. Alaska $330,000
- 2. South Dakota $305,250
- 3. Iowa $304,750
- 4. Nebraska $295,000
- 5. Nevada $282,750
- 46. Maine $235,500
- 47. Maryland $233,000
- 48. Michigan $228,750
- 49. Delaware $218,000
- 50. West Virginia $204,750
As you would expect, as the concentration of physicians goes up the average salary goes down.
- 5 of the 10 states with the most physicians are in the bottom 10 for physician salary.
- Of the 25 states with the most physicians, 17 are in the bottom 25 for average salary.
- Of the 25 states with the least physicians, 16 are in the top 25 for average salary.
- There is no state in the top 10 for physician concentration that is in the top 10 for salary.
- There is no state in the bottom 10 for physician concentration that is in the bottom 10 for salary.
- It pays to be cold. Only 2 states are in the top half for physician concentration and in the top 10 for physician salaries. Minnesota has the 14th highest concentration of docs and the 6th highest average salary. Alaska has the 22nd highest concentration of docs and the highest average salary.
- Only 2 states that touch the Atlantic Ocean are in the top half for salary.
How Much Are Extra Physicians Worth?
Once I knew how many physicians there were and how much they earned, I was curious how much each state paid to add doctors. How much does each state pay per physician for 100,000 citizens?
I divided the average physician salary by the number of physicians per 100,000 residents and mapped it out:
- 1. Iowa $1441
- 2. Nevada $1413
- 3. Mississippi $1387
- 4. Wyoming $1378
- 5. Utah $1348
- 46. Vermont $692
- 47. Rhode Island $675
- 48. New York $662
- 49. Maryland $617
- 50. Massachusetts $537
There is clearly a wide range of costs here. New England states can get doctors cheap. Massachusetts pays less than half what Iowa does on a per physician/100k residents basis.
Life Expectancy by State
Where you live can impact more than your paycheck. It can also impact your life expectancy. One study in JAMA found a 5.2 year span amongst all 50 states. I imagine Hawaiians live the longest because the beach is good for the soul. Utahns live a long time because they don’t drink or smoke and they spend all their time outdoors. Minnesotans live long because drunken ice fishing is an excellent source of omega 3’s.
- 1. Hawaii 78.5
- 2. Utah 77.9
- 3. Minnesota 77.8
- 4. North Dakota 77.7
- 5. Iowa 77.3
- 46. Georgia 73.8
- 47. Alabama 73.7
- 48. South Carolina 73.7
- 49. Louisiana 73.3
- 50. Mississippi 73.1
Return on Investment
I’ve got a curious mind. I started wondering which states were getting their money’s worth. How much does each state pay a physician per year of life of its citizens?
- 1. Mississippi $18.98
- 2. Nevada $18.98
- 3. Iowa $18.65
- 4. Wyoming $18.06
- 5. Arkansas $17.57
- 46. Vermont $9.03
- 47. New York $8.86
- 48. Rhode Island $8.81
- 49. Maryland $8.24
- 50. Massachusetts $7.00
Supply and demand is alive and well in medicine. Although there are a few outliers, the states with the most docs pay the least and the states with the fewest docs pay the most.
What surprised me the most is how well supply and demand applies to life expectancy. The states with the fewest doctors are spending the most money for each year of it’s citizens’ lives.
I don’t know about you, but I’d like to live in Hawaii with the earning power of an Alaskan. I’ll need the extra cash knowing I have to make it last an extra 5 years.