California Doesn’t Have Enough Doctors. To Recruit Them, The State Is Paying Off Medical School Debt

Bryan Ruiz’s hands were still shaking an hour after he learned the $300,000 in medical school loans he took out to become a dentist were being wiped away by California taxpayers.

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A year out of medical school, Ruiz thought it would take decades to pay off the debt, particularly since he had accepted a less lucrative position at a community health clinic that primarily serves low-income Medi-Cal patients.

“This really is life-changing,” he said.

Ruiz was among the first physicians and dentists told this month that their medical school debt was being paid off by the state. In exchange, doctors must pledge that at least 30% of their caseloads will be devoted to Medi-Cal patients for five years.

“He’s committed his life to this kind of service, and that’s what our loan repayment program is about,” Gov. Gavin Newsom said of Ruiz at a news conference last week touting healthcare investments in the newly enacted California budget. “If you support providing quality care to Medi-Cal patients, we are going to support your journey by providing a little bit of relief on these loans.”

Federal, state and local governments have increasingly turned to loan forgiveness programs as the competition for doctors has become more aggressive nationwide. Two-thirds of physicians finishing their training said they’d been contacted more than 50 times by job recruiters, according to a 2019 survey by physician staffing firm Merritt Hawkins.

California will spend $340 million paying off doctors’ debts using Proposition 56 tobacco tax revenue. This month, the state offered its first awards — 40 dentists received $10.5 million in debt relief while 247 physicians received $58.6 million.

California’s program is aimed at increasing the number of doctors who see Medi-Cal patients in a state experiencing a shortage of healthcare providers. The number of physicians who accept Medi-Cal patients — and the low reimbursement rate that comes with them — hasn’t kept pace with the rapid expansion of the state’s healthcare program for the poor, which covers 1 in 3 residents in the state.

“The loan repaying program is huge,” said Sandra R. Hernández, a physician and president of the California Health Care Foundation. “You have a lot of young physicians who graduate from medical school with tremendous debt. We think this is a good long-term win for getting physicians to serve in under-served areas.”

As California’s doctor shortage has grown, the state’s residents are growing older, with an aging baby boomer population increasing the need for healthcare workers. And one-third of the state’s doctors and nurse practitioners are baby boomers who are reaching retirement age, further depleting the workforce.

Those trends led healthcare, education and business leaders to form the California Future Health Workforce Commission in 2017 to study the state’s impending healthcare crisis, with the task force ultimately proposing a $3-billion plan over the next 10 years to address it.

Newsom included $300 million in new money to address the provider shortage in the budget he signed last month for the fiscal year that began July 1. Much of that money was allocated to training and recruitment programs recommended by the commission, including an additional $120 million for loan forgiveness incentives that’s meant to ensure physicians and dentists take on Medi-Cal patients.

But some costly and politically fraught recommendations by the commission will not be tackled this year, which could slow the state’s efforts to fix gaps in healthcare access. Among the commission’s recommendations was legislation to allow nurse practitioners, who undergo more training than registered nurses, to care for patients on their own without a physician’s supervision.

Commission member Assemblyman Jim Wood (D-Healdsburg) authored the bill that would have allowed nurse practitioners more autonomy. But it stalled in May amid pushback from the California Medical Assn., the lobbying arm of doctors in the state. Wood said he would revive the bill next year.

The commission’s report said the state would have seen an immediate, substantial increase of nurse practitioners working in rural areas in 2020 had the bill moved forward and, over time, would have saved hundreds of millions of dollars by treating conditions that otherwise result in trips to the emergency room.

“California is facing a perfect storm — elderly who will need care and a lack of healthcare providers,” said Karen Bradley, president of the California Assn. for Nurse Practitioners. “This bill would have allowed nurse practitioners to be part of the solution.”

Many more doctors will need to be trained in California if the state wants to meet the healthcare needs of residents, said Janet Coffman, a professor at Philip R. Lee Institute for Health Policy Studies at UC San Francisco.

More than 60% of California’s students who attended medical school in 2017 left the state for their schooling, according to the commission’s report. The national average of medical school students per 100,000 people is 30.3; California has 18.4 students per 100,000. That’s the third-lowest rate among the 45 states that have at least one medical school.

Despite this, California has made relatively few investments in increasing enrollment at medical schools in the state. The only new public medical school to open in California in the last four decades is at UC Riverside.

“And it’s relatively small,” Coffman said. “We’ve expanded class sizes in other medical schools some but not much.”

State Sen. Richard Roth (D-Riverside) introduced a bill this year to give UC Riverside $80 million to construct a new facility for its medical school, allowing the campus to double its enrollment from 250 students to 500 students. But the money was not included in the recently signed budget, and the bill was amended to exclude the funds. Instead, the budget promises only a future bond to pay for the construction.

Lawmakers have approved spending some $115 million for residency training positions, which the health commission says have historically been underfunded. Included in that is $33 million for California’s Song-Brown Program, which funds residency programs that increase diversity among students studying to be doctors or that serve high-needs areas of the state.

The budget made the funding for that program permanent for future years, a key priority for the commission.

“A significant down payment has been made with this budget,” said David Carlisle, president of Charles R. Drew University of Medicine and Science in Los Angeles and a member of the healthcare commission. “It represents a significant realization and response to the challenges that exist. We have to continue to work on this topic, because there is more work to be done.”

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