Why are income packages often smaller in expensive areas?

Though compensation averages are commonly available, physician income does vary by region. Perversely, income packages often are smallest in expensive areas.

These locations are typically desirable urban areas, from New York City to Chicago to San Diego. Such regions also often feature a good deal of competition and an oversupply of physicians. Both conditions make these areas ripe for managed care fee discounting and, consequently, lower incomes for physicians.