Amid concerns that too few physicians practice in many rural areas, lower income potential is cited as one obstacle to attracting and retaining rural physicians. Congress has responded by increasing Medicare payment rates to virtually all physicians practicing in rural areas. However, average physician incomes in rural and urban areas do not differ significantly, even after accounting for differences in physician work effort, specialty, and other physician and practice characteristics, according to a new national study by the Center for Studying Health System Change (HSC). Moreover, after accounting for the local cost of living, rural physician incomes on average provide about 13 percent more purchasing power than urban physician incomes.