Top 10 States with the Lowest Costs for Running a Medical Practice

These 10 states posted some of the lowest 2026 Medicare practice expense GPCI among states that CMS treats as a single statewide locality, with broader price levels and selected malpractice or tax indicators adding context.

By
Conexiant News Staff
May 18, 2026
3 min

Conexiant

Overview

This report identifies the states with the lowest costs for operating a medical practice, focusing on Medicare practice expense geographic practice cost indices (GPCIs) and regional price parity. Arkansas, Mississippi, and Alabama are highlighted as the top three states with the most favorable cost structures for physicians.

Background

Understanding the costs associated with running a medical practice is crucial for physicians considering where to establish or expand their operations. Variations in practice expenses, price levels, and state policies can significantly impact the financial viability of a practice. This report provides insights into the states that offer the most cost-effective environments for medical practice operations.

Data Highlights

{'table': {'rows': [{'state': 'Idaho', 'practice_expense_GPCI': '0.920', 'regional_price_parity': '95.5', 'malpractice_GPCI': '0.473'}, {'state': 'Nebraska', 'practice_expense_GPCI': '0.923', 'regional_price_parity': 'N/A', 'malpractice_GPCI': '0.378'}]}}

Key Findings

Arkansas has the lowest 2026 Medicare practice expense GPCI at 0.859.
Mississippi follows closely with a practice expense GPCI of 0.861.
Alabama's practice expense GPCI is 0.875, indicating a favorable cost environment.
Iowa has the lowest malpractice GPCI at 0.397, which may influence practice decisions.
New Mexico has a higher malpractice GPCI of 1.201, suggesting potential liability concerns.
Regional price parity varies significantly, impacting overall practice costs across states.

Clinical Implications

Physicians should consider the practice expense GPCI and regional price parity when selecting a location for their practice. States with lower GPCIs may offer a more sustainable financial environment, allowing for better resource allocation and potentially higher net income.

Conclusion

The findings highlight significant disparities in operating costs across states, emphasizing the importance of financial considerations in practice location decisions. Physicians can benefit from understanding these metrics to optimize their practice's financial health.