Since 1972, NHSC has enabled health care facilities in underserved communities across the nation to compete with private medical practices, health systems, and hospitals for community-responsive and culturally competent clinicians. Experience has shown that the misdistribution of clinicians does not remedy by itself (NHSC, 2000). According to Pathman and Konrad (2012) among all federal initiatives implemented since the 1960s to address the medical workforce shortage and mal-apportionment, the NHSC is a key resource.
Prior to the 2012 NHSC retention analysis commissioned by BCRS, the last large-scale evaluation of NHSC retention was conducted through a 1998 survey of NHSC clinicians and alumni from the 1980s and early 1990s (Konrad et al., 2000). This evaluation used survival analysis to demonstrate that over the years, retention rates were higher among clinicians who had completed the Loan Repayment Program rather than the Scholarship Program (57.2 percent of LRP clinicians remained at the service site at least one month after service completion, compared to only 20.7 percent of those in the Scholarship Program). Those in the Scholarship Program were also found to be less likely to be working in any practice that focused on care for the underserved. The hazard ratio of leaving the original service site over time for LRP participants ranged between 0.63 and 0.72 for “any underserved site.” These findings align with the results of retention rates of state loan repayment programs (Pathman et al., 2004(a))19. When measured from the date clinicians began serving within their programs, the hazard ratio of leaving one’s original service site over time was 1.96 for scholarship program participants relative to loan repayment program and direct incentive program participants (Pathman et al., 2004(a)).
While some studies report that program participants of loan repayment and scholarship programs are more likely to serve in underserved areas, retention rates from these programs may suffer from self-selection bias and therefore may not be indicative of the true program effect on retention (Rittenhouse et al. 2008). This bias arises as those who choose to apply for NHSC enrollment may be different from non-applicants along various unobserved characteristics. Using AMA Masterfile Data to follow three different physician cohorts from 1976 to 1996, Holmes (2004, 2005) accounts for selection bias while estimating the transition probabilities of NHSC enrollees and non-enrollees moving from period 1 (3-5 years after graduation) to period 2 (8-10 years after graduation). For many enrollees, this is the transition from the initial service obligation to the post-service period. He finds that enrollees are less likely than non-enrollees to stay in their initial place of practice and that the decrease in enrollees is not directly attributable to community characteristics or the nature of being an underserved area, but rather due to the fact that the enrollees’ initial location preferences are constrained, as some of these locations are not approved by the NHSC. This selection effect can be shown in a dynamic programming model that simulates the choice of individual providers regarding location, program enrollment, and retention, in response to policy incentives, socio-demographic variables, random shocks, and other unobserved variables. This dynamic programming model is described briefly in the Appendix. In Table A.2 below we summarize the transition rates estimated by Holmes (2005), across underserved and non-underserved areas for NHSC enrollees and non-enrollees at the end of period 1.
In the long run approximately 3 percent of physicians supported by NHSC are retained in highly underserved areas and 10 percent in moderately underserved areas (Holmes, 2004). He estimates that if NHSC tuition subsidies were to be increased by $5,000 per enrollee, the funds would yield a 1.7 percent increase in the long term (post-service) physician supply over current physician supply in highly underserved communities. Assuming a current repayment amount of $30,000/year, the estimated elasticity is 0.1 with respect to the loan repayment amount, which indicates that a 10 percent increase in the NHSC LRP would yield a 1 percent increase in long term post-service physician supply over current physician supply in highly underserved communities. Holmes also estimates that a $1,000 rise in tuition costs increases the likelihood of NHSC enrollment by 0.36 percentage points.
General retention of the medical workforce in rural, urban and frontier sites has also become more balanced over the years. Among clinicians serving in 2005, retention rates did not differ significantly for those across these three types of communities. In 1998, however, retention at all points in time was higher for those who served in rural practices (Pathman et al., 2012(a)). A common perception is that retention is shorter in rural areas because shortages are generally more prevalent and more critical in rural areas. However, Pathman et al. (2004) demonstrated that physician retention in any area is similar—shortage areas arise because of lower recruitment rates rather than lower retention rates. Pathman, Konrad, and Ricketts (1992) examined whether there is an association between characteristics of a physician’s training and the amount of time that he or she chooses to stay in rural practice. The results indicated that among NHSC Scholarship Program physicians, no retention differences existed for those who trained or have lived in rural areas previously. Additionally, public school graduates in the NHSC were found to remain in rural areas for shorter periods of time than private school graduates. For rural physicians, only the type of medical school predicted retention. At the time of study, NHSC physicians were also substantially less likely than non-NHSC physicians to be working in their index practices after eight years of employment (13 percent versus 44 percent) and in nonmetropolitan counties (25 percent versus 52 percent). Long-term retention rates of NHSC clinicians in their original practices have not improved significantly over the years. Among 2005 alumni, 46 percent remained in their index practice for at least two years, while only 26.4 percent remained after four years (Pathman et al., 2012(a)).
It has also been shown that the presence of NHSC participants in underserved areas increases the supply of nonparticipating physicians in those areas on average by 6 percent (Pathman et al., 2006). From 1981 to 2001, rural single-county HPSAs staffed by NHSC enrollees saw an average increase of 1.4 non-NHSC primary care physicians per 10,000 population, compared to a 0.57 mean increase in counties without NHSC enrollees, a finding which remained statistically significant even after adjusting for baseline county demographics and health care resources. The workforce growth in NHSC-supported HPSA counties was due in part to initial differences in the availability of primary care physicians and hospitals relative to other counties – which lead to flows of both NHSC and non-NHSC providers into those counties-, and in part possibly due to factors not incorporated within the study, such as stronger leadership and community organization in NHSC-staffed counties. Researchers also suggest that this growth coincided with the emergence of NHSC’s loan repayment program and the expansion of state-run scholarship and loan repayment programs. The increase in non-NHSC physicians may have come from NHSC alumni, physicians who were serving obligations to state programs, or unobligated physicians who were attracted to the local medical communities that were improved by NHSC staffing (Pathman et al. 2006).
During the past two decades, NHSC renewed its programmatic focus on retaining providers beyond their service terms. These efforts included shifting resources toward the expansion of the LRP, which was found to be more effective at promoting retention than SP. The GAO reported in 1995 that the cost-per-LRP recipient was 37 percent lower than the cost-per-SP recipient, when adjusted for the time-value of money and defaults (USGAO, 1995).20 In recent years, substantial funding for LRP and SP programs has come from the American Recovery and Reinvestment Act (ARRA), and more recently from the Affordable Care Act (ACA), which has allowed extending service contracts of physicians, NPs, and PAs.
19 Some state loan repayment programs are financed in part by HRSA-administered programs, such as the State Loan Repayment Program (SLRP). SLRP is a federally-funded grant program that provides cost-sharing grants to assist states and territories in operating their own state-based medical education loan repayment programs for primary care providers working in HPSAs in the state. As mentioned above, since the focus of the current study is NHSC retention, we ignore the potential spillover effects that SLRP might have on NHSC programs.
20 More recent studies of the cost efficiency of NHSC programs have not been performed.