Texas Enacts Loan Repayment Program to Entice Primary Care Physicians to Practice in State's Underserved Areas

Texas has taken steps to increase the number of primary care physicians in underserved areas of the state by putting in place one of the most generous physician loan repayment programs in the country.

The program, which will be funded at $60 million on a biannual basis, will award as much as $160,000 during a four-year period to individual physicians who agree to provide primary care services in federally designated health professional shortage areas, or HPSAs.

"This puts Texas at the forefront of any state or even the federal government when it comes to looking at creative strategies to recruit physicians into primary care and to serve in underserved communities," said Tom Banning, CEO and EVP of the Texas AFP.

The program, which went into effect Sept. 1, will start awarding loan repayment money to participating physicians in January. It is expected to provide $27 million in overall loan repayments in fiscal year 2010, which ends Aug. 31. After the program is fully operational, it will provide $25,000 per individual primary care physician the first year he or she participates. That amount will increase by $10,000 each succeeding year, with a maximum payment of $55,000 in the fourth year of the program.

This program could allow physicians to pay off their medical school debt within four years, said Banning. He added that the program does not require a time commitment on the part of physicians to participate in the program, but primary care physicians will have to practice for at least one year to start receiving repayments.

"We are getting calls on a daily basis from students and residents and from physicians outside of Texas who are interested in participating in the program," said Banning.

More than 5 million Texans -- about one in five -- live in a full or partial HPSA, and 118 counties in the state do not meet the national standard of one physician for every 3,500 people, according to the Texas AFP. Texas officials estimate that the loan repayment program will result in 225 new primary care physicians practicing in underserved areas in Texas every year, according to Jonathan Nelson, communications director for the Texas AFP.

"It is a program that not only brings more primary care physicians into practice, but addresses the poor distribution of physicians that we have so we can get primary care physicians out into underserved communities where they are needed most," said Nelson.

The state is funding the loan repayment program via a higher tax rate on smokeless tobacco products, said Banning.