The best-paid physicians are in South Dakota — here's why

South Dakota, North Dakota, Alaska, Wyoming and Nebraska are the top five states for physician pay, according to an analysis published Aug. 11 by The Washington Post


The Post analyzed more than 10 million tax records from the Internal Revenue Service to find the average annual income in 2017 for physicians in the prime earning years of age 40 to 55. 

The best-paid physicians worked in the Dakotas, the report found, with annual incomes of $524,000 in South Dakota and $468,000 in North Dakota, including business income and capital gains.

The "supremely weird geographic distribution of physician income," the report said, "defies expectations across the board, confounding the intuition hammered into our souls by more than a decade of covering economics." 

Rural America has 20 percent of the U.S. population and 10 percent of its physicians, so competition is low and physicians can charge more, the report said. Additionally, because physicians in rural areas rely on Medicare, demand is not determined by disposable income. 

To determine physician pay, CMS takes Bureau of Labor Statistics measurements of how much local professionals earn and compares them with the national average, then divides the difference by four and sets the physician-compensation component of the reimbursement formula at that number.

Below are the top 10 states for annual income for physicians ages 40 to 55 in 2017:

South Dakota — $524,000

North Dakota — $468,300

Alaska — $466,800

Wyoming — $464,300

Nebraska — $459,800

New Jersey — $458,100

Connecticut — $453,900

Indiana — $448,500

New York — $447,200

Texas — $446,500

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