" If there's not enough work to keep him fully employed in this small market, why is he making $3.2M?"
 private practice physicians aren't just employees of the practice, they are also a partner/shareholder. So he also see's a nice portion of the overall returns! Many Physicians have become Businessman/Investor Capitalists on top of just being Dr's. Unfortunately there are some, that are better at the latter.
In today's medicine a starting specialist doesn't just walk into a open position, but likely has to buy into a practice or buy out a retiring Dr.(if they even have to fully divest) This will also likely increase patient costs. I once heard that a single share in one of the specialist clinics was worth 500K! and that was 5 years ago.