The 'State' of American Medical Practice

“Charity begins at home, and justice begins next door.”

—Charles Dickens

My physician-dad always said that “medicine is a business.” In America, though, it seems like some places like commerce better than others.

Dad practiced medicine in New Jersey for some 50 years. Born and educated in New York City, he came to the Jersey Shore in the early 1950s to join his brother-in-law in a 2-man physician partnership. They had to work very hard to succeed—overly hard, based on where they lived.

I’m sure that it would not surprise my father to learn that New Jersey finished dead last in a recent study of which states are best suited to setting up an independent medical practice. NJ is flush with doctors too, nearly 27,000 work statewide today (split about evenly, primary care and specialist).

The survey results, Which State Best Suits Your Medical Practice—an Analysis and Reference Guide, were published in a recent issue of the Journal of American Physicians and Surgeons.

My recollection was that dad, while he loved the Garden State for its natural setting, hated its business and bureaucratic approaches—even back then. And things seldom got better for him. He was always complaining about the sky-high taxes and cost of living. There were too many rules and regulations, too many lawyers, and too much paperwork, he felt.

Our home state has always been at the bottom of the ladder when it comes to promoting and protecting business interests. And for all his swagger, things haven’t improved under Gov. Chris Christie. The Tax Foundation recently rated New Jersey as having the worst business tax climate in the nation. Coincidently, South Dakota and Wyoming finished best in the Tax Foundation study, as they did in the JAPS survey.

The state medical practice study author, Philip Eskew, is from Pennsylvania (#30 in the survey). He’s a doctor-lawyer with an MBA. “The climate in many states makes it difficult to practice independently or to maintain a financially viable practice at an affordable cost to patients,” Dr. Eskew explained. “Physicians should research the taxes and regulations in a state before investing in a practice there.”

Among the factors that the author used to assess a state’s medical practice “friendliness” was: “tax and regulatory policy, especially those regulations most relevant to their specialty or practice model. Important issues include: certificate-of-need (CON) requirements, in-office dispensing regulations, office-based surgical restrictions, pilot maintenance-of-licensure efforts, medical board action climate, medical liability climate, continuing medical education (CME) requirements, and whether the state elected to expand Medicaid. Taxes include: individual income, corporate income, sales, gross receipts, physician gross income, and various provider taxes.”

Here’s the state line-up:

Top 10: South Dakota, Wyoming, Idaho, Wisconsin, Indiana, North Dakota, Texas, Alaska, Nebraska, and Colorado.

Bottom 10: New Jersey, Massachusetts, Illinois, Ohio, California, New York, Maryland, Oregon, Washington, DC, and Rhode Island.

FYI—The 2 top-tier doctor-friendly states have fewer than 2,000 practicing physicians (1,900 practicing physicians in South Dakota and fewer than 1,200 in Wyoming).