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Addressing the Primary Care Provider Shortage: A Recruitment and Retention Financing Alternative

Tuesday, October 17, 2017   (0 Comments)
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William O'Brien, Primary Care Development Corporation


Bill will be presenting on this issue at the Fall Primary Care Conference


Among the most acute dilemmas in health care is the shortage of primary care providers. The imbalance is projected to worsen: By 2025, primary care encounters will surge by 100 million, extending the shortage of primary care physicians by an estimated 50,000.[1] The causes are varied and complex, including qualitative factors such as working conditions, job training, and opportunities for advancement.


Some of these challenges can be fixed. But a larger threat persists: the high cost of medical training versus relatively modest salaries at community health centers (CHCs). What results are primary care providers dissuaded from joining CHCs, which serve some of the country’s most vulnerable populations.


To meet this need, the Primary Care Development Corporation (PCDC) has launched a pilot program to help community health centers reduce their primary care provider shortages. The Provider Recruitment and Retention Financing Program enables CHCs to compensate providers in light of daunting medical school loan debts — and help create healthier, thriving communities through consistent primary care.


Why Assistance is So Needed


While the envy of the world, U.S. medical training blindsides with sticker shock — more than $230,000 and rising at public medical schools, and at least $300,000 at private medical schools.


Not surprisingly, more than 80 percent of medical school graduates owe over $180,000 upon graduation and face daunting monthly student-loan payments, ranging from $1,600 to $3,300. Considering the average primary care physician salary at federally qualified health centers (FQHCs) hovers at $165,000, FQHCs face extensive challenges in provider recruitment and retention.[2]


Solutions to date have been few. For example, while federal and state loan forgiveness programs offer strong economic incentives — HRSA’s National Health Service Corp offers $50,000 (tax free) or more in exchange for a two-year commitment at a health center — the caveats often outweigh advantages.


First, qualifying for the HRSA program is difficult: the centers must be located in a Health Professional Shortage Area (HPSA), and then score both high on an absolute scale, as well as higher (a “worse” HPSA) than their peers in the state. Second, the centers must apply during the limited open-application period. Finally, no forgiveness program has yet halted the “churn” — that is, providers departing CHCs immediately following the required two-year service time.


Without a source of permanent staffing, nearly 70 percent of centers turn to the “locum tenens” strategy, or filling provider vacancies through shorter, contract positions. However, the vast majority (75 percent) of locum tenens providers seek assignments of four months or less. And while locum tenens see fewer patients than do permanent providers, the costs are ultimately higher — over $200,000 a year based on annualized compensation, or $35,000 more than the average starting salary of a permanent provider (excluding any associated “finders-fees”).[3]


PCDC’s Provider Recruitment and Retention Program


Given the limited options available to health centers, PCDC designed a financing program to replicate more traditional loan-forgiveness offerings. However, it goes further by benefiting FQHCs that are ineligible for more traditional federal and/or state programs, and by offering multi-year financing. The capital can be used to recruit or retain any provider whose service is billable under Medicaid, which includes physicians, LPNs, and others, and is advanced for up to six years, ensuring continuity for the provider and health center alike.



Financing starts at $100,000 per center for FQHCs, FQHC look-alikes, and rural health centers. If approved, the capital can be used either to repay all or a portion of a provider’s medical education loan, or to create a bonus structure to retain one or more providers.

PCDC’s Provider Recruitment and Retention Program empowers CHCs to take control of their recruitment and retention efforts by providing sizable financing incentives for providers. With a focus on maximizing retention and revenues while minimizing risk, the program presents a new, viable  alternative where it is needed most.

[1] Physician Supply and Demand through 2025: Key Findings.  Association of American Medical Colleges, April, 2016

[2] Sources: Medical Student Education: Debt, Costs and Loan Repayment Fact Card. Association of American Medical Colleges, October 2015; US Bureau of Labor Statistics, 2014.  PayScale, Inc., 2017.

[3] 2015 Survey of Temporary Physician Staffing Trends, Staff Core (AMN Healthcare)



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