Loan repayment programs could work far better for both docs and underserved patients

Dr. Rishi Manchanda, who worked at a South Los Angeles clinic while in a government student loan repayment program, had just finished speaking about his career. A worried-looking medical student in the audience stepped up to the microphone during the Q&A.

“Other than these loan repayment programs, what can be done about the financial burden for primary care doctors?” she asked, referring to programs that pay down some of doctors’ medical school loans in exchange for practicing in underserved areas.

Dr. Manchanda, surprised, replied hesitantly that greater awareness of the repayment programs would help. The student didn’t look convinced or satisfied.

One can hardly blame her. The barriers to entry for physician loan repayment programs can be considerable, and their design could certainly do more to benefit service-oriented physicians and the understaffed community clinics that need them so badly.

Take the National Health Service Corps. This is a loan repayment program for primary care professionals that pays up to $50,000 in loan repayment in return for a commitment to practice full-time for two years at an approved site. Ideally, this program brings doctors in to the neediest areas and levels the playing field for patients who need access to doctors. It’s a great concept, since doctors can now graduate with loans of up to $250,000 that start accumulating interest quickly after graduation. Since primary care doctors are the most poorly paid physicians, without loan repayment, they can expect to be in debt for decades following graduation. While doctors in the loan repayment program are paid a base salary below the market rate for a doctor, the loan repayment money is tax-free. The net effect is a respectable income, but not more than the same doctor could earn in private practice.

In order to qualify for loan repayment, a doctor must be working full-time at a clinic that has a shortage of doctors, or what’s called a Health Professional Shortage Area (HPSA). This is measured on a score of 14 to 26. The higher the score, the higher the need for health professionals. There are approximately 6,100 shortage areas in the U.S.

Finding a clinic that is within driving distance of one’s home that also has a high enough HPSA score and actually has a physician job available can be a considerable challenge. Physicians with children may be unable to move closer to such a clinic due to the children’s school or day care arrangements. In order to save money, some clinics may hire mainly nurse practitioners and keep the number of doctors to a minimum.

Doctors are not guaranteed to be approved for loan payment even when working in a well-qualified clinic. The National Health Service Corps scores applications more highly if someone has more experience working with underserved populations. So a doctor who spent all her time in medical school doing research to be a professor and now wants to help the community instead is at a disadvantage, because of the assumption that she is not going to enjoy the work and stay on to advance within the community clinic. Two doctors could be working side by side, one effectively earning much more money than the other, based on how much time one spent in disadvantaged communities in the past, not her level of enthusiasm or commitment now. If a doctor receiving loan repayment leaves the clinic without permission or is fired (even unjustly), she has to pay $7,500 a month in penalties! 

How we might fix the program

Since there are so many barriers to participating in an otherwise honorable and valuable program, several adjustments should be considered to reward more physicians for doing often grueling work in underserved community clinics. It would also expose more doctors to this practice setting as a career option.

Applications could be accepted on a rolling basis, throughout the year, instead of once a year during a 3-month window. This would prevent the discouragement that some doctors feel when they get a qualifying job, only to realize they’ve just missed the deadline to apply for loan repayment itself. Rolling admissions would better serve the needs of clinics, as doctors often have to quit at unscheduled times during the year for a variety of reasons (illness, a spouse’s job change). With more doctors lured by the promise of faster loan repayment, clinics could hire more quickly and improve access to care for their patients.

Second, the National Health Service Corps should do away with its all-or-nothing approach to loan repayment. While only the doctors who work at the highest-need clinics currently get repayment help to the tune of $50,000, a truly sliding scale would encourage a higher number of doctors to get involved with underserved clinics. In this scenario, anyone who met the basic application criteria (licensure, no criminal history, etc.) would receive some amount of loan repayment, guaranteed, for each month of service to a qualifying community clinic. A lower HPSA score might reduce the amount of loan repayment, but the doctor would remain eligible for something. While this amount would be much lower per person and based on the total amount of funds available for the year, even this small incentive would help medical professionals feel valued and wanted in the community clinic setting, instead of pitted against their colleagues in a race to collect a jackpot based on whose previous work with underserved populations was more “impressive.”

Finally, the financial penalties for ending service early should be abolished, as they are likely scaring away doctors who are concerned about being let go unfairly by dishonest clinic managers. Losing the loan repayment should be the only consequence.

Service is service, and rewarding that service without unnecessary barriers will result in better health care for underserved patients who need it the most.

[Photo by Tulane University via Flickr.]