Maryland envisions "enterprise zones" to attract physicians

The concept would use loan repayment, tax credits and other financial incentives to place more primary care clinicians in areas with significant health disparities.

By Doug Trapp — Posted Jan. 30, 2012

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Primary care physicians and other health professionals who agree to practice in underserved parts of Maryland could receive student loan repayments and other financial incentives under a plan to reduce health care disparities in the state.

Maryland Lt. Gov. Anthony G. Brown on Jan. 17 announced his support for recommendations made earlier in the month by a state health disparities panel. The 13-member Health Disparities Workgroup -- a subgroup of the Maryland Health Quality and Cost Council, chaired by Brown -- proposed creating "health enterprise zones." The zones would provide tax incentives and other financial awards to primary care physicians and other clinicians who practice within the zones. Legislation enacting the proposal is expected to be taken up by the Maryland Legislature this year.

"Maryland has world-class hospitals, top medical schools and one of the highest rates of primary care physicians per capita, and yet we continue to see disparities in health care and outcomes among Maryland's racial and ethnic communities," Brown said. That's partly because of a lack of access to primary care in certain areas, he added.

"We believe social behavior is changed where there are strong incentives to change," said E. Albert Reece, MD, PhD, chair of the disparities work group and dean of the University of Maryland School of Medicine.

Maryland has the second-highest number of physicians per capita, at 179.6 per 100,000 residents. It also has the third-highest median household income. But the state ranks 34th in health outcomes, 35th in infectious disease rates and 43rd for infant mortality rates, according to the United Health Foundation's America's Health Rankings 2011.

Maryland also has relatively high rates of geographic health disparities. For example, black Marylanders' infant mortality rate is nearly three times that of white Marylanders, according to the work group's report. Also, blacks are nearly twice as likely to be uninsured and three times as likely to have end-stage renal disease. Hispanics in the state are more than four times as likely to be uninsured as whites and twice as likely to have late prenatal care.

Reducing health disparities is a moral and financial imperative for the state, said Joshua M. Sharfstein, MD, secretary of the Maryland Dept. of Health and Mental Hygiene, the state's Medicaid agency. A 2006 state report found that blacks in Maryland are nearly twice as likely as whites to be hospitalized for asthma, hypertension and heart failure. Bringing blacks' hospitalization rates into parity with the rates of whites would save Medicare $26 million annually, according to the report.

"Expanding the primary care network in Maryland is a very high priority for us," Dr. Sharfstein said. "Both urban and rural areas have challenges with primary care access."

MedChi, the Maryland State Medical Society, supports the disparities reduction proposal, said Gene Ransom, the society's CEO. "We're generally excited about this as a potential new tool in solving these shortage issues," he said. The disparities panel sought comments from MedChi before releasing the final proposal.

Maryland's hospital payment system requires hospitals to collect a significant amount of quality data, some of which are used to calculate incentive payments. The proposal also would collect data on outcomes according to race and ethnicity. If existing systems of care are not reducing health disparities, the proposal could lead to payment incentives that focus on disparity reductions.

The Maryland Hospital Assn. is still familiarizing itself with the disparities proposal, said MHA spokesman Jim Reiter. However, he said association members probably would not find any part of it very objectionable. "If you're going to serve your community properly, then you serve everyone in the community."

Starting at the local level

Health enterprise zone applications would be initiated by community-based organizations. Each application would require documentation of health disparities in the zone, among other information. The state will devise a standardized application process.

Overall state funding would determine the number of health enterprise zones, Dr. Reece said. Maryland Gov. Martin O'Malley has pledged to include $4 million in funding for the disparities program in his fiscal year 2013 budget proposal.

Dr. Reece said the work group spent months studying health disparities and programs to reduce gaps. Many of the programs haven't worked well because they are too broad, he said. However, the enterprise zone model has been used successfully to boost economic development around the country and as part of a school initiative in the Harlem neighborhood of New York, Dr. Reece said. Health enterprise zones in Maryland would be customized to address each geographic area's particular health care problems.

If adopted by state lawmakers, this would be Maryland's second program designed to provide physicians with medical school loan repayments. The state enacted a physician loan repayment program in 2009, but it never was funded because the Centers for Medicare & Medicaid Services was not convinced that the program would address patient costs adequately, Dr. Sharfstein said. However, he said the state is exploring the possibility of funding the new loan repayment program through grants from the CMS Center for Medicare & Medicaid Innovation.

The new disparities proposal would offer property and income tax incentives to primary care physicians and other clinicians in the health enterprise zones. Assistance paying for electronic medical records systems and reduced rent in government-owned buildings also would be available. Recipients of the incentives would be required to accept Medicaid patients and work in settings that meet certain state community service criteria.

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Maryland's multipronged plan to cut disparities

A proposal endorsed by Maryland Lt. Gov. Anthony G. Brown would address the state's health disparities in part by offering financial incentives to physicians who practice in underserved areas of the state. The plan, based on deliberations by a state health care disparities panel, would:

  • Allow the creation of health enterprise zones in areas with significant health outcome disparities, poor access to primary care and high rates of chronic illness. Community-based organizations would apply to create the zones, and proposals with matching funding would be given priority.
  • Offer student loan repayment assistance to physicians and other primary care clinicians who practice in health enterprise zones. The loan repayment would go through the health enterprise zone's sponsoring organization.
  • Offer tax credits, startup funding, free or reduced rent in government-owned buildings, and other incentives for physicians and other primary care clinicians in health enterprise zones. Priority would be given to clinicians working in settings that meet state classifications for community service.
  • Collect data on racial and ethnic disparities in hospital care. If existing systems of care are not reducing disparities, existing hospital incentive pay would be adjusted based on hospital performance for racial and ethnic minorities.
  • Create a health care innovation prize to be awarded to an individual, group or organization that devises new or proven interventions and programs that reduce disparities in the state.

Source: Maryland Health Quality and Cost Council, Health Disparities Workgroup Final Report and Recommendations, January (link)

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External links

Maryland Health Quality and Cost Council, Health Disparities Workgroup Final Report and Recommendations, January (link)

Maryland Dept. of Health and Mental Hygiene's Health Quality and Cost Council (link)

America's Health Rankings for Maryland, United Health Foundation (link)

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