Homer Alaska - Business

Story last updated at 11:59 AM on Wednesday, July 25, 2012

State offers incentives to care providers

By Jonathan Grass
Morris News Service - Alaska

Alaska isn't always the first place that pops into a doctor's mind as a place to build a practice. That's why the state has passed new legislation to provide incentives for both new and seasoned medical professionals to set up shop in the Last Frontier.

The statute called the Health Care Professions Loan Repayment and Incentive Program is the state's new method of increasing the numbers and distribution of certain types of medical providers.

The program offers loan repayments for school and training plus cash incentives. Pat Carr, section chief for the Health Planning and Systems Development Section of the Department of Health and Social Services Health Care Service division, said this is to help draw bigger numbers of both young and seasoned providers to Alaska, especially the rural areas.

"The overall purpose of the bill is to address the worsening shortage of certain health care professionals," Carr said.

Tier I professionals in regular positions may receive up to $35,000 annually while those in hard-to-fill positions may receive $47,000 annually. Tier II professionals can be eligible for up to $20,000 per year in regular positions or $27,000 per year for hard-to-fill positions.

Tier I health care professionals include physicians, dentists and pharmacists. Carr said these types of professionals usually incur the most debt in their training. Tier II professionals include dental hygienists, registered nurses, advanced nurse practitioners, physical assistants, physical therapists, clinical psychologists and clinical social workers who have at least a master's degree in social work.

Carr said that by 2015 or 2016, the state may require nurse practitioners to have doctorates and they may become eligible for tier I status.

Carr said the employing sites are expected to make matching payments depending on the site's ability. Each determination ultimately falls to the HSS commissioner.

The bill is to make Alaska more competitive with other states in terms of recruiting doctors and maintaining those it already has. Carr said loan repayment programs are a proven technique that most states already use. She said it's not unusual for tier I providers to complete their training with more than $200,000 in debt.

"With that kind if debt, most professionals choose to go to areas where they can make more money or choose to go to areas that offer certain advantages like loan repayment or incentives," she said.

The majority of states include some sort of state-funded incentive program for medical professionals. Carr said the cash incentives aren't always used as much as loan repayments in other states, although certain work sites still use them.

Alaska currently has another loan repayment program in place called SHARP (Supporting Health Care Access through loan Re-Payment). This is funded by a combination of federal and state sources. The new bill will be the only state-funded repayment program.

SHARP has a two-year contract period while the new statute has an initial three-year contract commitment. SHARP mandates substantial penalties if the provider stops service or doesn't fulfill the contract.

Certain providers, such as registered nurses and pharmacists, aren't covered under the SHARP program.

Providers who return to school and incur additional debt can reapply to the state program. Carr said this part is a strong retention component.

Program timeline

The statute started out as House Bill 78 and was sponsored by state Rep. Bob Herron, D-Bethel. This bill originated from a proposal put together in 2007 and 2008 of working group focused on primary care. It was here that the different tier categories originated. They were based on average loan debts and national average salaries.

The first bill to carry this idea was introduced by the Senate in 2009 but did not pass.

Governor Sean Parnell signed HB 78 into law in late May. Clement said that because this is a new program, the state needs to develop the infrastructure and capacity to administrate it first.

"While the bill is technically now and running now, the program isn't in effect yet," Clement said, adding, "There more work to do."

This work includes hiring a program administrator and developing administrative regulations that will lay out more details than are in the bill. Clement said that while the exact amount of time needed isn't know, these type of duties can take up to six months.

HSS Commissioner William Streur recently appointed an interim advisory body for this program. One of the body's responsibilities will be generating regulations for the program. Carr said the department is currently in the process of gathering input for the content of these regulations. The regulations will be put out for public comment once they're drafted.

This advisory body has just met publicly and will do so again on July 23.

"We're hoping that by the end of the year, first of next year, the regulations will be fully adopted," Carr said.

Carr said that announcements for how candidates and sites can apply will also be determined.

The program runs through June 30, 2019. Herron's legislative aide, Liz Clement, said if it proves successful, future legislators could look into extending it or turning it into a permanent program.

Doctor distribution

The bill was introduced in response to Alaska's need for more medical professionals and there is an emphasis on remote locations. Clement, who assisted with the bill and spoke on Herron's behalf, said the cash incentives even for those without debts are a key component to bring doctors here, especially in rural areas where there are few medical peers to work with.

She said rural Alaska simply has a shortage of providers so there's always a need to get experienced people out there.

"For a lot of Alaskans, it's not a matter of having a choice between what doctor or dentist to see but more of a question of do you have access to one," she said.

The Alaska Physician Task Force that was commissioned in 2006 by the University of Alaska and Health and Social Services found that the state has a shortage of physicians. Such positions in rural Alaska had a 16 percent vacancy rate in 2004. The task force predicted the shortage would worsen statewide over the next 20 years.

The task force reported that the next generation of physicians wanted a more balanced lifestyle than many areas of the state could provide.

The task force also found that physician growth cannot keep up with population growth. It reported that even expansion of the successful Alaska WWAMI medical school program and the Alaska Family Medicine Residency cannot need the state's needs.

Dr. Alice Rarig, head of the planning team in HSS Health Planning and Systems Development, developed an update in 2011. This report states that health care is still a fast-growing industry here even though it doesn't meet demand. Health care jobs increased by 46 percent between 2000 and 2010. Physicians increased by 7 percent between 2007 and 2011.

The update states that the Anchorage and Matanuska-Susitna labor markets were the only ones in the state to grow in all groups of licensed health care providers between 2007 and 2011. For example, Southwest lost physicians, psychologists and pharmacists but gained pharmacy technicians. Southeast lost physicians and pharmacists but gained advanced nurse practitioners.

The 2006 report offered several strategies to help combat the shortage. These included expanding the WWAMI program, increasing the number of residency positions in the state, maximizing Medicare payments to teaching hospitals and reactivating the Western Interstate Commission on Higher Education with an attached service obligation for Alaskan students to attend medical school. Rarig said that since the report came out the WWAMI program has been expanded.

Carr said some of the state's challenges lie in where health care providers are located more than how many the state has. Therefore, the Health Care Professions Loan Repayment and Incentive Program focuses on the distribution of providers as much as it does in maintaining the number of providers.

Carr said the sites are prioritized by needs assessments, remoteness and percentages of underserved patients. Underserved patients generally refer to those who are uninsured or those who receive Medicaid or Medicare or other federal aid.

Clement said the challenge lies in finding professionals who want to live in rural Alaska. She said another challenge for Medicare and Medicaid recipients is finding providers who will see them, even in urban areas.

"Seniors and lower income Alaskan are still having trouble finding anyone who will take them on as patients," Clement said.

Rarig noted several areas that work against the state in terms of retention and recruitment, including professional challenges and remote environments with little communication with medical colleagues.

"Probably the most important is satisfaction of family," she said.

Clement said Herron knows this program is not a quick fix but is one thing that can be done and can measured to "hopefully address the bigger problems."

Rarig said Alaska is improving. It gained three times as many physicians as it lost per year between 2009 and 2011. This is an improvement over year 2005 to 2009 when the state gained twice as many as it lost per year. She said this is a positive picture but the new program will help even more through recruitment and retention.

"It costs so much to recruit. If we can possibly hold on to people then we don't have to spend so much on that recruitment," she said.