Rural Physician Shortages and Policy Intervention

Abstract

Although fourteen percent of the U.S. population lives in rural areas, only ten percent of primary care physicians practice medicine there; populations in areas with physician shortages have measurably worse health outcomes. We analyze the effects of incentive programs intended to eliminate physician shortages. Using a differences-in-differences approach, we estimate that student loan forgiveness programs cause an increase of three physicians per rural county. We then estimate a model of physician location decisions and find that physicians are unresponsive to differences in compensation and prefer to live in their home state. Consequently, current programs are too small to eliminate shortages.