Originally published in Synapse on September 19, 1985.
In the next few days, Gov. George Deukmejian will decide the fate of a bill which would create a state health service corps. The corps would provide service-obligated scholarships for medical students and place primary-care physicians in medically underserved areas in California.
Senate Bill 879, the Montoya Health Service Scholarship Incentive Act, was introduced by state Sen. Joseph Montoya, D-Los Angeles, and co-authored by assemblymembers Tom Hayden, D-Los Angeles, and Theresa Hughes, D-Los Angeles.
It would place about 50 physicians a year in designated Critical Health Manpower Shortage areas. As defined by the state, these shortage areas have one physician for populations of 1,855 or more.
The federal government defines shortage areas as a physician to population ratio of 1:3,500. According to the authors of the bill, approximately 5 million Californians live in such areas, and 2,000 primary-care physicians are needed to provide minimum health care.
SB 879 is modelled after the federally-run National Health Service Corps. Montoya introduced SB 879 in response to President Reagan’s defunding of the program and drastic cuts in low interest student loan programs.
SB 879 would offer 50 scholarships a year for school expenses and a $600 a month stipend for living expenses. In return the student agrees to work in a shortage area one year for each year the scholarship was received after completion of residency training, for a minimum of two years.
The main purpose of SB 879 is to place physicians in shortage areas and have them remain as long as possible after their service obligation ends. The bill calls for special criteria to increase the likelihood of long-term practice in the areas.
These criteria are:
- financial need;
- background in shortage areas, such as residence or school attendance;
- demonstrated interest in primary care;
- membership in an under represented demographic group in medicine; and
- possession of linguistic and cultural characteristics that are needed in such areas.
Shortage areas are typically low-income, ethnic, urban and rural areas, and the state program is designed to target students from these areas who will be motivated to stay. In doing so, the state program tries to avoid a major problem encountered in the national program—a large number of students who later decide not to meet their service obligations.
As a further incentive, those who want to buy out of the service obligation would have to pay twice the amount they received as scholarship, plus interest. Another reason why SB 879 can help place physicians in shortage areas is that with the cuts in student aid, medical students must assume higher debts with higher interest rates.
The bill could help a student meet the financial burden of medical education. When the student becomes a practicing physician and must repay the debt, it can affect choice of specialty and locale for practicing.
High debt discourages choosing a primary-care specialty and work in a low-income area because of lower pay and consequent difficulty in repayment. Medical students at UCSF are fortunate that educational costs are much lower than at private schools.
According to Nancy Kull, director of financial aid at UCSF, in 1985 the average UCSF medical student graduated with a debt of $22,558. The highest debt was $41,178. An average student’s monthly payment is approximately $360, but this can vary widely depending on the type of loans incurred. Loans differ in the amount of interest, when that interest accrues and when repayment begins.
A medical student from a private school may have monthly repayments of up to $1,400. The state Student Aid Commission would be in charge of administering this program and selecting specific criteria and recipients.
The bill appropriates $825,000 from the state’s general funds for the scholarships and $75,000 for administration of the program. The original form of SB 879 proposed a moderate increase in state relicensing fees for physicians as a funding source, but the California Medical Association opposed this part of the bill. With general funds now proposed as the source, the CMA endorsed the bill.
The American Medical Student Association, the Student National Medical Association, the California Chicano-Latino Medical Student Association and various primary care clinics in shortage areas also support the bill.
Gov. Deukmejian may sign the bill given the $1 billion state budget surplus. Twenty-eight other states have passed similar programs. If signed, the first scholarships will be offered in September 1986.
