States dangle school loan repayment deals

New York and Texas beef up incentives to draw more physicians to areas lacking adequate medical care.

By Brian Hedger — Posted April 6, 2009

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Large medical school debt and low reimbursement rates in medically underserved areas are two main reasons physicians shy away from underserved communities.

In response, states such as New York and Texas plan to boost programs designed to swap school loan repayments for physician agreements to work in such communities for a set time.

In New York, $22 million was designated in March to the "Doctors Across New York" program. The program provides physicians with loan repayments of up to $150,000 over five years for serving in underserved regions and gives practices in such areas up to $100,000 over two years to hire more physicians.

With the funds, 83 physicians will be offered up to $150,000 for loan repayment, and 126 medical practices will receive up to $100,000 for practice and clinic support. The awards will include loan repayments for 15 family practice physicians, 10 ob-gyns, 11 internists, four general surgeons and four pediatricians.

The number of physicians added could increase if those accepted into the program don't need the full $150,000, said New York Dept. of Health Commissioner Richard F. Daines, MD.

"We're [third] in the country in the total number of doctors, but distribution is a problem, and we have a somewhat older doctor population," he said. "We needed to address it."

"Doctors Across New York" was approved in the state's 2008-09 budget. Facilities that get money to hire physicians must spend it within six months.

Gov. David A. Paterson said the program will target areas in the state with the biggest physician shortages and allow greater access to health care. It will improve the state's health care system by providing more primary and preventive care options and reducing the cost of health care, he said.

Currently, about 25% of New York's population lives in 91 federally designated primary care shortage areas. Many areas have shortages of critical specialists. The state said seven counties have no practicing obstetricians, and the Southern Tier has seen an 18% decrease in ob-gyns since 2001.

"The north country up in the Adirondack area and in central New York along the Mohawk Valley are extremely physician-short," Dr. Daines said.

Lone Star state lagging

In Texas, legislators are considering proposals to increase the amount the state would pay toward physicians' educational debts in exchange for practicing in an underserved area.

State Rep. Wayne Chisum has sponsored two House bills to create a new loan repayment program for physicians and nonphysicians willing to work in underserved areas for at least five years.

Texas will need 4,584 more primary care professionals, physicians and nonphysicians, to care for its underserved population by 2015, according to a 2008 report by the National Assn. of Community Health Centers, The Texas State Dept. of Health currently has designated 179 of the state's 254 counties as medically underserved.

"Some counties have no doctors, and no nurses -- just absolutely zero," said Chisum.

A competing bill in the Senate, sponsored by Sen. Judith Zaffirini (D-Laredo), would increase the amount the state's current Physician Education Loan Repayment Program pays toward school loans. The program caps at $81,000 for five years. The bill would bump it to $140,000.

Chisum said his House bills and the Senate bill likely will be merged before anything is passed, but not everybody is thrilled with that idea.

The Texas Medical Assn. supports the Senate bill to keep the state's current program alive. Only physicians qualify for that program, which is funded by physician license renewal fees. Chisum's plan includes nonphysicians and would draw funding from taxes on smokeless tobacco.

"We have concerns about that," said Albert T. Gros, MD, chair of the TMA Council on Legislation.

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