Reversing the trend

Texas’ enhanced loan repayment incentive set to draw more docs
into primary care

By Kate McCann

Daniel Contreras has heard many reasons why his medical school classmates will not pursue family medicine. The residency training takes almost as long as others and the reimbursement isn’t worth it. The loans after medical school are overwhelming and it’s difficult for those who go into primary care to pay off the debt. Considering a report from the Association of American Medical Colleges that students carry an average $137,000 in debt upon graduation, it’s understandable that money plays a part in medical students’ career decisions.

“That’s been the problem from the get-go,” says Contreras, a fourth-year medical student at the University of Texas Health Science Center at San Antonio. “That’s why it was hard to get people motivated to stay with primary care and family medicine.”

A newly updated physician education loan repayment program passed this spring by the 81st Texas Legislature has the potential to remove debt as a consideration in those decisions, providing an incentive Contreras says will encourage more physicians to enter primary care. “[Money] is up there with lifestyle as number one or number two for factors that cause students to pursue a career.”

Contreras’ own choice to pursue family medicine wasn’t difficult. The Rio Grande Valley native grew up seeing people in his community suffer from disorders like obesity and diabetes and it troubled him to watch those problems lead to death and other co-morbidities.

Family medicine is his way to promote health maintenance and prevention. Although nothing could sway him from the specialty, the idea of being debt-free after medical school and residency is a “huge sigh of relief.”

“I envisioned that it would take anywhere between five and 15 years to pay off my debt if I managed my money correctly. I’d still have to take the money to pay off that debt out of my own salary. With this program I’ll be able to make my own salary and still get the debts paid off.”

While Texas has had a program to assist physicians with educational debt since 1985, the program’s ability to attract physicians fluctuated as loan repayment amounts failed to keep pace with the rising cost of medical education. Then came House Bill 2154 by Rep. Al Edwards, D-Houston, and Sen. Juan “Chuy” Hinojosa, D-McAllen. TAFP physician leaders and the Texas Association of Community Health Centers teamed up with lawmakers to revitalize the program and, after a hard-fought battle, saw the bill signed into law that creates the most generous program of its kind in the country.

“Competition for physician services is going to be fierce in the near future as the nation as a whole, not just Texas, faces a pending physician shortage,” says TAFP CEO Tom Banning. “This enhanced loan repayment program coupled with our recently enacted tort reforms puts Texas at the forefront of states to practice medicine.”

Physicians who agree to practice for four consecutive years in a primary care Health Professional Shortage Area and see patients enrolled in Medicaid and the Children’s Health Insurance Program will be eligible for up to $160,000 for educational loan repayment: $25,000 for their first year of service, $35,000 for the second, $45,000 for the third and $55,000 for the fourth. For those with less than $160,000 in debt, THECB will pay a proportional amount each year over the four-year period.

“One of the main elements of the legislation that was so significant were the changes to the tax code that the comptroller’s office has estimated will generate a very large amount of revenue for the program. Because of that, the legislation recommends maximum loan repayment amounts that are significantly larger than anything we have been able to do in the past,” says Lesa Moller of the Texas Higher Education Coordinating Board. THECB will administer the program, with some duties falling under the purview of the Texas Department of State Health Services.

Any physician with educational debt from undergraduate, graduate or medical school can apply as long as he or she is a U.S. citizen or a legal permanent resident, holds an unrestricted full physician medical license from the Texas Medical Board, and is not under contract to provide medical services for another loan repayment program or scholarship agreement. Physicians must also be board-certified or eligible to take the exam for certification. The legislation does not limit physician applicants by specialty, though Moller anticipates that the majority of participants will be primary care. It also does not restrict applicants to new physicians.

“It’s not just for brand-new, fresh-out-of-the-box physicians,” says Connie Berry, manager for the Texas Primary Care Office. “We expect that there will be some physicians who are already in practice. Loan repayment may help to retain them in the shortage area where they’re working.”

Officials hope the program will encourage physicians to practice in the areas of Texas that need them the most. The latest figures from DSHS identify 118 whole-county primary care HPSAs and 46 partial-county HPSAs spanning rural and inner-city urban areas. As long as the funding remains available, as many as 225 physicians may qualify for loan repayment starting in fiscal year 2011, with up to 225 additional physicians brought on each year for a workforce of 900 by fiscal year 2014.

“The primary focus is to get a four-year commitment to practice in the Health Professional Shortage Area,” Moller said. “We certainly anticipate that this program can make a significant difference in reducing or eliminating HPSAs.”

Pending a final agreement, DSHS and THECB are preparing for their different administrative roles for the program. DSHS will do outreach and marketing, develop and publish the online application, and review and rank applicants based on criteria established in the final rules. Priority will be given first to primary care physicians renewing their service pledge, then to primary care physicians practicing in a rural whole-county HPSA or a Federally Qualified Health Center or similar site, then by HPSA score for an applicant’s proposed practice location. Once DSHS selects the physicians, THECB will verify loan balances and distribute the funds directly to loan institutions after each year of a physician’s service.

Berry expects the application for the first cohort to be available on the DSHS website in November or December 2009, though she does not expect to have a fully electronic form the first year. “It would be downloaded or filled out and then sent by e-mail. Next year we hope to have a real online application.”

Though there is still much work to be done, Moller expresses excitement about this opportunity. “We think there’s finally enough funding that this program can have a significant impact on reducing the number of health professional shortage areas.”

“A lot has to change to make all of the necessary things happen, but this particular program at least will help in the meantime to encourage the graduating doctors to choose a place they may not otherwise choose,” says TAFP President Kaparaboyna Ashok Kumar, M.D., F.R.C.S.

Kumar, an associate professor of family medicine at UTHSCSA, projects positive implications for the primary care pipeline, but doesn’t see this program as the cure for the physician shortage. “This will certainly influence some students, not all students, but those students who are strongly interested in primary care and who are leaving primary care just because of debt burden.”

Contreras is also hopeful but cautious in his prediction. He says that if a student wants to pursue primary care and money is a factor, then this program will likely enable the student to pursue the specialty. “It would come down to what’s important. Each student I talk to has a couple of things on their top list of three or four that sways them toward one specialty or another. This would definitely eliminate one, but there would be a few others to tackle.”