[Senate Hearing 110-26]
[From the U.S. Government Printing Office]



                                                         S. Hrg. 110-26
 
  THE PHYSICIAN SHORTAGE CRISIS IN RURAL AMERICA: WHO WILL TREAT OUR 
                               PATIENTS?

=======================================================================

                             FIELD HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING THE PHYSICIAN SHORTAGE CRISIS IN RURAL AMERICA, FOCUSING ON 
                    ACCESS TO HEALTH CARE IN ALASKA

                               __________

                   FEBRUARY 20, 2007 (ANCHORAGE, AK)

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        BILL FRIST, Tennessee
JAMES M. JEFFORDS (I), Vermont       LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              MIKE DeWINE, Ohio
HILLARY RODHAM CLINTON, New York     JOHN ENSIGN, Nevada
                                     ORRIN G. HATCH, Utah
                                     JEFF SESSIONS, Alabama
                                     PAT ROBERTS, Kansas

                    J. Michael Myers, Staff Director

  Katherine Brunett McGuire, Minority Staff Director and Chief Counsel

                                  (ii)

  




                            C O N T E N T S

                               __________

                               STATEMENTS

                       TUESDAY, FEBRUARY 20, 2007

                                                                   Page
Murkowski, Hon. Lisa, a U.S. Senator from the State of Alaska, 
  opening statement..............................................     1
Jackson, Karleen, Commissioner, State Department of Health and 
  Social Services, Juneau, AK....................................     4
    Prepared statement...........................................     6
Hatch, Rita, Older Persons Action Group, Incorporated, Anchorage, 
  AK.............................................................    10
    Prepared statement...........................................    11
Appel, Frank, Chair, Alaska Commission on Aging, Anchorage, AK...    11
Berger, Carl, Executive Director, Lower Kuskokwim Development 
  Council, Bethel, AK............................................    13
Tanner, Ross, President-Elect, Alaska State Medical Association, 
  Anchorage, AK..................................................    17
Johnston, Harold, Director, Alaska Family Practice Residency, 
  Anchorage, AK..................................................    20
Neubauer, Richard, Internal Medicine, Anchorage, AK..............    23
Perkins, Byron, American Osteopathic Medical Association, 
  President of the Alaska Osteopathic Medical Association, 
  Anchorage, AK..................................................    27
    Prepared statement...........................................    31
Coombs, John, Associate Vice-President for Medical Affairs, 
  Associate Dean for Regional Affairs, Rural Health and Graduate 
  Medical Education, Seattle, WA.................................    41
    Prepared statement...........................................    44
Perdue, Karen, Associate Vice President for Health, University of 
  Alaska, Anchorage, AK..........................................    49
    Prepared statement...........................................    51

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Report of the Alaska Physician Supply Task Force (August 
      2006)......................................................    72

                                 (iii)

  


                             FIELD HEARING



  THE PHYSICIAN SHORTAGE CRISIS IN RURAL AMERICA: WHO WILL TREAT OUR 
                                PATIENTS

                              ----------                              


                       TUESDAY, FEBRUARY 20, 2007

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                     Anchorage, AK.
    The committee met, pursuant to notice, at 9 a.m., at the 
Loussac Public Library, 3600 Denali Street, Anchorage, Alaska, 
Hon. Lisa Murkowski, presiding.
    Present: Senator Murkowski.

                 Opening Statement of Senator Murkowski

    Senator Murkowski. We'll call to order the field hearing 
for the Health, Education, Labor, and Pensions Committee.
    I'd like to welcome you all here this morning to talk about 
an issue that is of great concern to us here in this State, and 
truly to Americans across the country, particularly in those 
more rural areas.
    Just a little bit of process here before we begin this 
morning. We do have a set witness list of invited participants 
that we have asked to address this issue. I do believe that you 
should have received a copy of that when you signed in. I do 
understand this morning that there are some individuals who 
would like the opportunity to give their perspective on 
physician access here in the State of Alaska. While we had not 
anticipated that, I would welcome the opportunity to hear your 
comments. So, the revised plan--if you will--this morning, is 
that we'll have the opportunity for individuals to make a short 
statement at the conclusion of the panelists' testimony.
    If you chose not to provide your statement orally here 
today, we would encourage you to submit your statements in 
writing. They will be made part of the Health, Education, 
Labor, and Pensions Committee record. So, that will be part of 
the committee's deliberation as we take the issue up back in 
Washington, DC.
    So, whether you choose to submit your comment here this 
morning, or in writing--your choice--we'll hold the record open 
on this for a 2-week period, so if you would like to submit 
those comments, you may do so in writing.
    Maggie Elehwany, who is just walking off here, is my 
legislative assistant on healthcare matters, and she would be 
the contact person for those of you who might have any 
questions as to the process.
    As I've indicated, this is a HELP Committee Field Hearing, 
I do believe it's probably the first such hearing that we've 
ever had in this State. I am the first of Alaska's Senators to 
serve on this committee, a committee of very important 
jurisdiction to all of us. So, to have the opportunity this 
morning, as Alaskans, to put our comments on the record for my 
colleagues back in Washington to see and understand our 
situation, I think is very important. And I am most 
appreciative to the Chairman of the committee, Senator Kennedy, 
and the Ranking Member, Senator Enzi, for allowing us to have 
this, this morning.
    Now, some have asked me, ``Well, why are we even having 
this field hearing up here? What's going on up in Alaska?'' 
And, I will start off by reading just a few snips from some e-
mails that I have received from constituents, and this is just 
kind of random sampling out of the correspondence files as they 
come in.
    Over the past year, the volume of e-mails, faxes, letters 
saying, ``I can't find a doctor to care for me. I cannot find--
I cannot get an appointment as a Medicare-eligible patient, 
what do I do?''
    I've got one here from a constituent here in Anchorage, who 
says,

          ``My mother has returned to Alaska to retire near her 
        grandchildren, and has had difficulty in the extreme in getting 
        a doctor who will take her, as she is a Medicare patient. My 
        mother has made in excess of 100 calls to physicians in 
        Anchorage.''

    Another woman from Anchorage writes,

          ``During the past year, I've tried to find a doctor that 
        accepts Medicare. I used the Anchorage Yellow Pages and called 
        over 100 doctors, only to be told that they won't accept any 
        more Medicare patients. I'll tell you ahead of time, we'll be 
        going to the hospital emergency rooms to receive even the basic 
        medical care for colds and flu and other basic needs that could 
        have been treated by seeing a doctor at their established 
        practice. This doesn't sound like good fiscal management.''

    Another letter, one that was actually reprinted in the 
Anchorage Daily News from a person here in Anchorage, says ``My 
friend's telephoned more than 80 doctors recently, and no one 
was accepting new Medicare patients.'' Another constituent from 
Kenai writes,

          ``My mom has Medicare, and she had to wait 5 months to be 
        seen by a neurologist, because she'd been put on a waiting list 
        to be seen, due to the fact that she was a Medicare patient.''

    E-mail after e-mail, fax after fax, phone call after phone 
call, saying, ``What do we do? Whom do I go to? How long is the 
list? What can we do?'' And so, it's comments like these from 
constituents all over the State that has precipitated the need 
for this hearing today.
    And I will tell you, we will focus here today on the Alaska 
situation, but we must also keep in mind that, as we face the 
challenges here, in Alaska, Americans across the country in 
rural parts of the Nation are facing similar concerns.
    Patients cannot access healthcare because of the 
dangerously low shortages of healthcare providers. In just 20 
years, 20 percent of the U.S. population will be 65 years, or 
older, and this will be a larger percentage than in any time in 
our Nation's history. And just as this aging population places 
the highest demands on our healthcare system, we've got some 
experts that are predicting a national shortage of 200,000 
physicians. If that becomes a reality, 84 million patients will 
be without a doctor's care.
    There's already a dozen States--including Alaska, now--that 
report physician shortages. And the shortages exist in 
radiology, cardiology, neurology, just to name a few, but the 
greatest shortages persistently have been in primary care. In 
fact, the shortage of primary care physicians in rural areas of 
the United States represents one of the most intractable health 
policy problems of the past century.
    So, the question is, Where are the doctors going? What's 
happening out there? And we're losing our doctors through 
attrition--one-third of physicians are 55 years or older, and 
are likely to retire just as this baby boom generation moves 
into its time of greatest medical need. Additionally, for the 
last quarter of a century, medical schools have kept their 
student enrollments virtually flat, so we're not seeing the 
medical students coming out.
    But, we're also losing our doctors to frustration. Low 
Medicaid and Medicare reimbursement rates, coupled with complex 
regulations and paperwork, leave physicians aggravated and 
disappointed with the practice of medicine.
    We'll hear from one of our witnesses this morning that 
Medicaid--which covers nearly one in five Alaskans, and one in 
three Alaskan children, once again, will receive cuts in 
Federal dollars if the temporary formula is not extended or 
made permanent.
    The recent Federal reductions in Alaska Medicare 
reimbursement rates have been so severe, that our physicians 
report reimbursement rates are only about 40 percent of the 
actual cost of treating patients. Losing money by seeing 
Medicare patients has meant that many, many physicians have 
stopped accepting Medicare patients entirely. And, this was 
reflected in the frustration of some of the e-mails that I read 
to you.
    We hear the stories from seniors all over the State who 
call physician after physician, but they can't find a doctor 
who's willing to accept them. And, if you are lucky enough to 
find a physician, it often may take weeks or months to get an 
appointment. And, when faced with that kind of a delay, 
patients essentially have one of two options--they go to the 
emergency room, or they don't go at all.
    In rural America, patients have long gone without care. 
Despite the fact that one-fifth of the U.S. population lives in 
rural America, only 9 percent of our Nation's physicians are 
practicing in these areas. Over 50 million of these rural 
Americans live in areas that have a shortage of physicians to 
meet basic needs.
    Physician recruitment in rural America is a problem. High 
student debt often forces many students away from rural 
practice, and into urban-specialty medicine. In Alaska, we know 
that the definition of rural here is a little bit different 
than in the Lower 48. But, our definition of rural, and how we 
deal with that, and you compound that with the physician 
shortage crisis, and the situation is just magnified.
    Right now, Alaska has the sixth lowest ratio of physicians 
to population in the United States. Once you go outside the 
Anchorage area, we're dead last. In other words, outside of 
Anchorage, the physician to population ratio is the worst in 
the Nation.
    Now, while we don't have a medical school here in this 
State, we do have two successful programs that have helped 
train Alaskans as physicians, or to help bring doctors to the 
State. This is the University of Washington Medical School 
program, known as WWAMI, we also have the Alaska Family 
Physician Residency Program.
    But, despite the success of these two great programs, we 
recognize the inadequacies in that each of them are far too 
small to meet the population's needs. In fact, the State has 
clearly recognized the crisis that we are facing, and last year 
the University of Alaska, in conjunction with the State, 
established a task force. We'll hear some of the details from 
that task force presented to us today, and we greatly 
appreciate that.
    The challenge that we face, that our seniors face, and 
others face, who don't have access to a doctor--it's an 
unacceptable situation. We must help current physicians stay in 
the practice of medicine, and we must vastly increase our 
healthcare workforce.
    Senator Stevens and I have been working together to fight 
for fair Medicaid and Medicare reimbursement rates for Alaskan 
providers. I've introduced the Rural Physician Relief Act; this 
is a bill that provides tax incentives for physicians to 
practice in our most rural and our frontier locations. I'm also 
going to be introducing a bill when we get back to Washington 
after this President's Day recess, this will be the Physician 
Shortage Elimination Act, and what this will essentially 
provide for is to double the funding for the National Health 
Service Corporation.
    It will equally allow rural and underserved residency 
programs to expand, by removing barriers that prevent the 
programs from developing rural training rotations, and will 
create programs that target disadvantaged youth in rural and 
underserved areas. Essentially, it will create a pipeline to 
careers in healthcare. And finally, to bolster the cornerstone 
of rural healthcare, which is the community health center, 
through grants, and by allowing them to expand their residency 
programs.
    There's a great deal that we must do, but today, this is my 
opportunity to hear from you about the specifics on the ground 
here in this State, and again, so that I can take that back to 
Washington to help explain to others why we need to act, and 
act quickly, as we address access to healthcare here in this 
State.
    And with that introduction, I would like to bring up on the 
first panel, we have Karleen Jackson, who is the Commissioner 
of the State Department of Health and Social Services. 
Commissioner Jackson has been very instrumental, as we have 
worked on Medicare and Medicaid issues, and I appreciate you 
coming this morning, Commissioner, up from Juneau to provide 
the perspective.
    And, with that, if you would like to proceed.

STATEMENT OF KARLEEN JACKSON, COMMISSIONER, STATE DEPARTMENT OF 
           HEALTH AND SOCIAL SERVICES, JUNEAU, ALASKA

    Ms. Jackson. Thank you, Senator Murkowski. I'd also like to 
thank the committee for allowing Alaska to host this important 
field hearing to talk about healthcare access in rural America.
    My written testimony provides references to several 
important facts that are in the written materials, many of 
which are out on the table, that outline the issues that 
compound the rural healthcare crisis in Alaska, as you so 
eloquently explained in your introduction.
    Some of the facts, for example, there are just over 670,000 
people living across more than 570 square miles in Alaska. One 
hundred and fifty-two thousand people in 230 villages and 
communities--including our capital city--only are able to 
access services outside their area by air or water 
transportation, weather and conditions permitting.
    The annual cost of recruitment of healthcare workers in 
Alaska was over $24 million in 2005-2006, with $15 million 
attributable to rural facilities. Average cost per physician 
hired were over $74,000, with rural costs per hire 44 percent 
higher than urban.
    Healthcare costs in Alaska are 70 percent higher than those 
in the Lower 48. In 2004, 16 percent of rural Alaskan physician 
positions were vacant, and shortages are expected to increase 
over the next 20 years, as the State's population ages, and 
physicians retire.
    As mentioned, the number of people 65 and older in Alaska 
is projected to increase from 43,000 to 124,000 people between 
2005 and 2025. This will exacerbate the problems created by the 
expiration on January 1, 2006 of the Medicare Physician 
Reimbursement Formula, that had helped encourage Alaskan 
physicians to accept Medicare patients.
    Medicaid provides healthcare coverage for nearly one in 
five Alaskan residents, including almost one in three children, 
making Medicaid the second-largest healthcare insurance payer 
in the State. Alaska has the largest Native American population 
served by Medicaid in the Nation, with 52,000, or nearly 40 
percent American Indian or Alaskan Native enrollees in fiscal 
year 2005.
    Alaska's frontier and rural areas have the largest number 
of people requiring Federal healthcare assistance. As a result, 
several Federal funding issues will significantly compound the 
problems, with access to healthcare in Alaska, unless they're 
addressed by Congress.
    The Deficit Reduction Act of 2005, set the Alaska Federal 
Medicare Assistance Formula, or FMAP percent rate, at 57.58 
percent until September 30, 2007, at which time it reverts to 
the formula-derived rate of 52.48 percent. However, the formula 
reduction does not take into account Alaska's high cost of 
care, especially for those Alaskans living in areas of the 
State that experience Third World conditions, and for which 
physician recruitment issues are exacerbated.
    It is critical to the success of the Alaska-Denali Kid Care 
Program, not only that Federal SCHIP be reauthorized, but also 
that the funding formula be changed, so that Alaska is not 
dependent on the redistributed funds from other States to 
ensure access to healthcare for the one in three Alaskan 
children who rely on this program.
    And the Federal Continuing Resolution has had a negative 
impact upon tribal healthcare corporations, by reducing funding 
for some at a time when already high fuel prices are rising, 
resulting in some corporations actually securing short-term 
loans to maintain services.
    In conclusion, the shortage of physicians in Alaska, 
particularly in our rural and frontier areas of Alaska, must be 
addressed within the context of our larger healthcare system 
challenges, including shortages of other healthcare 
professionals and para-professionals, and funding decreases 
across several Federal sources.
    We appreciate Congressional support for efforts such as the 
Dental Health Aid Therapist Program that helps Alaska meet our 
healthcare needs, and Senator Murkowski, with you, to solve the 
physician shortage crisis in our Nation and in our State.
    Thank you for allowing us an opportunity to bring this 
issue to the attention of the HELP Committee.
    [The prepared statement of Ms. Jackson follows:]

                 Prepared Statement of Karleen Jackson

    Thank you for allowing Alaska to host this important field hearing 
to discuss access to healthcare in rural America. And, thank you, 
Senator Lisa Murkowski, for your strong support for finding solutions 
to meet the healthcare needs of Alaskans, particularly those living in 
rural and frontier areas of our vast State.
    According to data from the Alaska Department of Labor and Workforce 
Development, there are 670,053 people (Census Bureau and Alaska 
official estimates for 2006) living across the 570,374 square miles 
that make up our State. Connected by a road system are 518,000 people--
weather and conditions permitting--while 152,000 people in 230 villages 
and communities (including Juneau, our Capital city) can only access 
services outside their area by air or water transportation
    The Status of Recruitment Resources and Strategies (SORRAS II) 
report published in June 2006 found the annual cost of recruitment of 
healthcare workers in Alaska was over $24 million in 2005-2006, with 
$15 million attributable to rural facilities. Average costs per 
physician hired were over $74,000, with rural costs per hire 44 percent 
higher than urban.
    These facts help to explain some of the reasons the healthcare 
costs in Alaska are 70 percent higher than those in the contiguous 
States of the United States. However, a number of studies and reports 
have been produced in the last few years to help further quantify the 
scope of the challenges we face in creating an affordable, accessible 
healthcare delivery system in Alaska.
    In January 2006, University of Alaska President, Mark Hamilton and 
I commissioned the Alaska Physician Supply Task Force to identify the 
current and future need for physicians in Alaska, as well as strategies 
to meet those needs. The Task Force Report, published in August 2006 
identified that 16 percent of rural Alaskan physician positions were 
vacant in 2004, with the shortages of physicians expected to increase 
over the next 20 years as the State's population ages and physicians 
retire. The aging of Alaska's population impacts our physician shortage 
in other ways, as well.
    According to the 2006 Long Term Forecast produced by the Lewin 
Group and ECONorthwest, the number of people 65 and older in Alaska is 
projected to increase from 43,000 to 124,000 between 2005 and 2025. 
This will exacerbate the problems created by the expiration on January 
1, 2006 of the Medicare physician reimbursement formula that had helped 
encourage Alaskan physicians to accept Medicare patients. Inadequate 
Medicare rate reimbursements for physicians must be addressed both to 
encourage physicians to come to Alaska and to support their ability to 
care for elderly patients.
    The Medicaid Program Review commissioned by the Alaska Senate 
Finance Committee and published in January 2007 reported that Medicaid 
provides healthcare coverage for nearly one in five Alaskan residents, 
including one in three children--making Medicaid the second largest 
health insurance payer in the State, while it ranks third nationally. 
Furthermore, Alaska has the largest Native American population served 
by Medicaid in the Nation, with 52,000 American Indian or Alaska Native 
enrollees in fiscal year 2005--representing nearly 40 percent of 
Alaskan Medicaid recipients.
    Several Federal funding issues will significantly impact access to 
healthcare for low-income Alaskans unless they are addressed by 
Congress. First, the Deficit Reduction Act of 2005 set the Alaska 
Federal Medicaid Assistance Percentage (FMAP) rate at 57.58 percent 
until September 30, 2007, at which time it will revert to the formula 
derived rate of 52.48 percent. However, the formula reduction does not 
take into account Alaska's high cost of care, instead considering only 
the relative personal income of Alaska residents compared to the 
national average. A reduction in Alaska's FMAP rate would decrease the 
Federal Government's ongoing contribution and commitment to Alaska's 
Medicaid program--requiring an estimated $37 million in State general 
funds for the 9 months of State fiscal year 2008, and even greater 
levels of State general funding in future years.
    In addition to the FMAP rate decrease, it should also be noted that 
President Bush's 2008 budget proposal requests that Medicaid 
administrative funding be reduced to 50 percent. Some current 
administrative activities, such as Medicaid Management Information 
System (MMIS) procurement is funded at 90 percent Federal Medicaid; 
with other administrative activities at 75 percent. Estimates are that 
a drop to 50 percent in administrative funding would result in an 
additional loss of $14 million for Alaska. Widely fluctuating matching 
proportions severely impact budget stability for the department and 
hinder our ability to plan and fund future healthcare services.
    Federal SCHIP funds support Alaska's Denali KidCare program--an 
important component of Alaska's healthcare system. However, it is 
critical to the success of this program, not only that SCHIP be 
reauthorized, but also that the funding formula be changed so that 
Alaska is not dependent on the redistributed funds from other States to 
ensure access to healthcare for low-income children and families. 
Reauthorization that does not address the inequities of the current 
funding formula will severely disadvantage Alaska by reducing our 
ability to fund Denali KidCare.
    The Federal Continuing Resolution (CR) that has funded Federal 
programs in lieu of budget bills has had a negative impact upon tribal 
healthcare corporations. In a usual year the annual Indian Health 
Service grant to tribes would increase by 1 to 2 percent and the 
payment would be received such that Alaska tribes could gain interest 
on the grant amount. This year the CR provided installment payments to 
tribes at Federal fiscal year 2006 level, which included a 1 percent 
rescission. This decreased level of funding has resulted in many of the 
Alaska tribal health corporations securing short-term loans to maintain 
services, thus paying interest rather than earning interest. Certainly, 
not all tribal fiscal challenges are a result of the CR process--
however, the current CR situation compounds other challenges such as 
the very high cost of energy in rural Alaska.
    Several efforts are underway to address the challenges Alaska faces 
in recruiting and retaining physicians--especially in rural areas. For 
example, workforce development strategies outlined in the Physician 
Supply Task Force report (2006) which Congress could support include: 
Federal loan repayment programs which play a major role in bringing 
doctors and other providers to Alaska; support for the National Health 
Service Corps and the Indian Health Service; expansion of medical 
school classes, and funding for residency programs and teaching 
hospital activities can help improve Alaska's recruitment opportunities 
as well as support the national supply; and support for Senator 
Murkowski's proposal for a tax credit for physicians agreeing to 
practice in frontier areas would improve the situation for Alaska.
    The Alaska Senate Finance Committee's recently released Medicaid 
Program Review (January 2007) provides useful guidance and information 
about policy and funding options including potential 1115 Waiver 
options which are currently under development to increase Alaska's 
strategies for improving prevention and disease management to save 
future healthcare costs.
    Governor Sarah Palin, through Administrative Order No. 232 dated 
February 15, 2007, created the Alaska Health Care Strategies Council to 
develop an action plan for Alaska to ensure access to quality, 
affordable healthcare. This Council will compile and analyze the 
current components of the healthcare system in Alaska; review the 
various planning reports compiled to address the gaps in service; 
develop short-term and long-term statewide strategies to improve 
healthcare access, control cost, and ensure quality of care; and draft 
performance measures to assess the success of implementing those 
strategies. Public involvement and input will be included as the 
Council prepares an action plan for the Governor and legislature by 
January 2008.
    Finally, we appreciate the congressional support for the Alaska 
Native Tribal Health Consortium's Dental Health Aide Therapist program, 
as well as the funding efforts that support the healthcare delivery 
system in Alaska including: HRSA funding for the Community Health 
Centers program, National Health Services Corps, Rural Hospital 
Flexibility Program, Small Hospital Improvement Program, State Office 
of Rural Health, Outreach and Network Grants; USDHHS funding from the: 
Centers for Disease Control and Prevention, National Institutes of 
Health, and SAMHSA. These Federal funds work together to support rural 
health facilities, pandemic flu preparedness, obesity and diabetes 
management and prevention, fetal alcohol syndrome treatment and 
prevention, HIV/AIDS monitoring, oral health, cardiovascular disease 
management, tobacco-related illness reduction, EMS services, 
Residential Psychiatric Treatment Centers, Behavioral Health Aides, 
suicide prevention efforts, disease and risk surveillance, and State 
planning efforts to increase healthcare coverage for the uninsured.
    In conclusion, the shortage of physicians in Alaska--particularly 
in our rural and frontier areas must be addressed within the context of 
our larger healthcare system challenges--including shortages of other 
healthcare professionals and para-professionals and funding decreases 
across several Federal sources.*
    *Sources: Alaska DHSS, Status of Recruitment Resources and 
Strategies 2005-2006 (SORRAS II). June 2006; Alaska Physician Supply 
Task Force, Securing an Adequate Number of Physicians for Alaska's 
Needs. August 2006; Alaska Department of Labor and Workforce 
Development, Alaska Population Estimates online at 
www.labor.state.ak.us.; Lewin Group and ECONorthwest, Medicaid Long 
Term Forecast; and Pacific Health Policy Group, Medicaid Program 
Review, January 2007.

    Senator Murkowski. Thank you, Commissioner. I appreciate 
your comments and the good work that you do in this area.
    You've indicated the impact to the State--the financial 
impact to the State--as a consequence of the Federal Medicaid 
Assistance Percentage, the FMAP. And, as we look, the financial 
hit--you've indicated it's about $37 million in State General 
Funds this year, but with the potential for an additional $14 
million if, in fact, the proposal should go ahead to do further 
reductions.
    We can understand what the numbers look like on the ledger, 
we know that that's going to be a huge hit to the State. But, 
what does that do within your Department, should the State have 
to assume that financial hit, because of the reduction--what's 
that going to do to your budget, within the Department of 
Health and Social Services?
    Ms. Jackson. Senator Murkowski, what it would do for our 
budget in the Department, would have serious consequences for 
access to care, and quality of care, for Alaskans. We've done, 
I believe, a pretty remarkable job over the last several years 
of tightening up, as much as possible, every dollar that we 
spend, every Medicaid dollar coming in, and at this point in 
time, those kinds of reductions would mean reductions to 
services for Alaskans. And when we look at those reductions in 
light of the physician supply shortage, and other workforce 
development issues, the combination is somewhat the perfect 
storm. That would mean that Alaskans are not going to get the 
healthcare that they need.
    Senator Murkowski. So, in other words, if people think the 
situation is bad now, they can anticipate that it will be 
worse, should these reductions continue.
    Ms. Jackson. That's correct.
    Senator Murkowski. Let me ask about the task force that the 
State commissioned with the University, to analyze the 
physician shortage problems. The report is pretty specific in 
its conclusion that there will be significant consequences for 
access, and for quality of care. But, do you also see that 
costs would continue to increase, as a result of the squeeze, 
if you will, or the constriction to access?
    Ms. Jackson. Absolutely. One of the biggest problems, and 
you mentioned this in your introduction, is when people don't 
have appropriate healthcare--don't have access to appropriate 
healthcare--they wind up being seen in emergency rooms at a 
much higher cost than they would otherwise be seen. And, so 
every dollar that we're not able to put into preventive care 
costs us more money, in the long run, when people have to be 
seen for those higher care costs.
    Senator Murkowski. And, I would imagine that many of our 
systems are already overwhelmed when it comes to providing that 
level of service that is necessary in the emergency rooms.
    Ms. Jackson. That would be absolutely true.
    Senator Murkowski. As we look at the demographics of this 
State, and recognize that we have an aging population--we're 
seeing the numbers of physicians dropping--is Alaska prepared 
to meet its healthcare needs?
    Ms. Jackson. Senator Murkowski, I don't believe we are. I 
believe it's critical that we have these kinds of conversations 
right now, the Governor is also--through Administrative Order--
created a Healthcare Strategies Council, which I believe will 
help us in the next year to look at these issues. But, if we 
don't address these issues in the next few months, or at least 
the next year, I'm very concerned about what that's going to 
mean for health in Alaska. And I know I'm not alone in that, 
and you'll hear that from many other people.
    But it is a time when many things are converging to create 
a crisis of healthcare for Alaskans.
    Senator Murkowski. Well, we would look forward to hearing 
the outcome from the Council that has been recently formed, and 
there are many different entities, whether it's the Task Force, 
or the newly appointed Council. We're going to be speaking this 
afternoon to the roundtable on healthcare that has been pulled 
together by Commonwealth North. There are a great many entities 
that are discussing the problem. But, we've got to get beyond 
the discussions stage, and say, ``How are we going to be 
answering some of these concerns that we are highlighting?'' 
So, I look forward to working with you on this council, and 
sharing some of the information that we gain.
    Ms. Jackson. Thank you, Senator Murkowski. I look forward 
to that, too, and we hope that that will roll up all of the 
good planning that's been done, and come out with an actual 
action plan for Alaska.
    Senator Murkowski. Thank you. I appreciate you coming here 
this morning, and providing us with your testimony.
    With that, I would like to welcome to the second panel, 
Mrs. Rita Hatch, who is with the Older Persons Action Group; 
Mr. Frank Appel, who is Chair of the Alaska Commission on 
Aging; and I'm also going to invite up Mr. Carl Berger, who is 
the Executive Director of the Lower Kuskokwim Economic 
Development Council, out of Bethel, Alaska.
    And, you all don't need to crowd on to one table there, if 
you want to have more room, you may, but if you want to huddle 
together for warmth, I'm okay with that, too.
    [Laughter.]
    Again, I welcome you all to the committee, and I thank you 
for your advocacy on behalf of Alaska's seniors, and with that, 
Mrs. Hatch, why don't we begin with you?

     STATEMENT OF RITA HATCH, OLDER PERSONS ACTION GROUP, 
                INCORPORATED, ANCHORAGE, ALASKA

    Ms. Hatch. Good morning, Senator, thank you for inviting me 
here.
    I'm a volunteer with the Older Persons Action Group, and 
I'm well-versed in Medicare, Medicaid, Social Security and 
other senior issues. And as such, I advocate for seniors in 
Alaska.
    The most important issue facing seniors in Alaska today, is 
finding a physician who will take the most new Medicare 
patients, you know that. But what good is having a prescription 
drug program, if you can't find a doctor to write a 
prescription?
    And what good is paying for Medicare Part B, which pays for 
doctor's services, if you can't find a doctor to serve you?
    With the assistance of some of the staff at OPAG, I have an 
ongoing telephone survey of medical facilities in Anchorage, to 
find out which ones of them will take new Medicare patients. 
And I receive approximately 10 calls a week from seniors who 
don't have a doctor, and have tried and tried, and finally get 
around to calling me, and the only thing I can tell them to do 
is to see a nurse practitioner. I do have a list of nurse 
practitioners who take care of new Medicare patients.
    There's only one clinic in Anchorage that I know of who is 
taking new Medicare patients, and that's the Anchorage 
Neighborhood Health Center. The Providence Family Clinic can't 
take any more, they haven't taken any more for months now. And, 
there are about 20 doctors that I know of, outside of the 
clinics, who are taking new Medicare patients, of all of the 
doctors in Anchorage.
    I have one senior who called me the other day--she's still 
working, and she's working for a big company who has insurance. 
But she's 65, and her doctor told her he will not take her. 
Even though Medicare is secondary, he still won't take her. So, 
I don't know what his reasoning is, because the insurance would 
pay most of it, anyway.
    Then I have another man who just called me the other day, 
he's 63, and his doctor said to him the other day, ``When 
you're 65, I'm not taking you any more.'' And he just called me 
up and said, ``What is going on?''
    So, this is the situation, I get people calling who bring 
parents up from outside who tell me the same story, they can't 
find a doctor. Of course, my temporary solution is the nurse 
practitioners, but I think there's got to be something else. It 
seems to me the State of Alaska should be offering incentives 
for doctors to come up here, to practice up here, and not just 
in--well, we need them in the rural areas, but we need them in 
Anchorage, too.
    I have talked to people in other States, and we seem to be 
the worst of them. Montana has the same problem, I don't know 
what other States do, but those are the two States who have a 
big problem, and it's because of the low population, I guess.
    But, it's up to you, to get us some help here, please.
    [Laughter.]
    There aren't many seniors in the audience today, besides 
me, and I really don't have a dog in this fight, because I'm a 
retiree from the State, and I have good insurance, and I am a 
patient at Anchorage Neighborhood Health Center. But I'm here 
to advocate for the people who don't have any help.
    [The prepared statement of Ms. Hatch follows:]

                    Prepared Statement of Rita Hatch

    My name is Rita Hatch. I am a volunteer with the Older Persons 
Action Group. I am well versed in Medicare, Medicaid, Social Security 
and other Senior issues and as such, I advocate for seniors in Alaska.
    The most important issue facing seniors in Alaska today is finding 
a physician who will take them as new Medicare patients. What good is 
having a prescription drug program in Medicare if you can't find a 
doctor to write a prescription? What good is paying for Medicare Part 
B, if you can't find a doctor to treat you?
    With the assistance of some staff at OPAG, I have an ongoing 
telephone survey of the medical facilities in Anchorage, to ascertain, 
which of them will take new Medicare patients.
    I have one senior, who is still working and has insurance and she 
still can't find a doctor to treat her, although in her case, Medicare 
would be the secondary payer of her bill.
    I receive approximately 10 calls a week from seniors who are trying 
to find a doctor who will accept them as new Medicare patients. As of 
today, there are about 20 doctors in Anchorage, who are still taking 
new patients.
    Anchorage Neighborhood Center is the only facility still taking new 
Medicare patients and that facility is being overwhelmed. Providence 
Family Clinic is no longer taking new patients.
    My temporary solution is to offer the names of Nurse Practitioners, 
who are more than capable of taking care of patients' needs for meds 
and other physical problems. I have a roster of about 10 PA's, whom I 
currently recommend.
    The problem as I see it, is that doctors charge too much for visits 
and Medicare pays too little. Obviously Alaska needs more doctors, but 
it takes almost 10 years for a new doctor to get into business in 
Alaska. One answer might be for the State of Alaska to offer incentives 
to outside doctors to come and practice in Alaska. As far as I know, 
this problem exists in every city in Alaska.

    Senator Murkowski. Well, I thank you. Not only for your 
testimony, Mrs. Hatch, but I thank you for all that you do on 
behalf of Alaska's seniors. I know that through your efforts, 
through Older Persons Action Group, you have provided a little 
bit of comfort as you've tried to help match seniors with 
providers, and I appreciate that.
    I'll come back with questions to each of you, but let's go 
to you, Mr. Appel. Thank you for being with us this afternoon, 
and for your work on the Alaska Commission on Aging.

 STATEMENT OF FRANK APPEL, CHAIR, ALASKA COMMISSION ON AGING, 
                       ANCHORAGE, ALASKA

    Mr. Appel. Senator Murkowski, I'm here to testify on the 
denial of Medicare services as well, primarily by primary care 
physicians. I am testifying as an individual who has been 
denied service, and as Chair of the Alaska Commission on Aging.
    Last summer, my primary care physician sent me a letter, 
stating that he would no longer provide Medicare-reimbursed 
services. I had been with that physician for about 15 years. 
The reason stated was that the paperwork was too demanding. He 
sent along a contract for me to sign, stipulating that I could 
continue obtaining service, provided I pay for those services 
personally. I have declined to sign that contract.
    I have contacted a few primary care physicians, based on 
referrals from friends, but I have been unsuccessful in finding 
a physician. I haven't searched aggressively, because I had a 
physical last May, however, I do have a prescription that 
cannot be renewed after April 1st, so I need to get a little 
bit more aggressive in my effort. My wife has suggested that 
maybe I need to schedule an appointment for a physical at a 
clinic in Seattle.
    Several weeks ago, a group of us were sitting around the 
table at a Senior Advocacy Coalition Meeting, the subject was 
Medicare services, service denials came up. I was astonished 
when three of the five people who were present, who were over 
65, said they had been denied Medicare-reimbursed services, or 
were unable to find a primary care physician who would accept 
Medicare patients.
    During the last year, the Commission on Aging has received 
many comments, and much anecdotal evidence that seniors have 
been denied service, or have been unable to find a primary care 
physician who will accept new Medicare patients.
    They have been told by doctors, if they are not receiving 
adequate reimbursement to cover their services. Seniors have 
told us they have made many unsuccessful phone calls to obtain 
primary care services. I have heard that seniors have 
increasingly turned to the services of hospital emergency 
rooms, nurse practitioners, and the neighborhood health 
clinics.
    Recently, I talked to the Executive Director of the 
Anchorage Neighborhood Health Clinic. She said the Clinic has 
been overwhelmed recently by the numbers of seniors seeking 
Medicare and Medicaid services.
    Incidentally, most of these comments or complaints have 
come from the larger communities in this State, the larger 
population areas. I don't know why that is occurring. I 
understand there's a shortage of primary care physicians in 
this State. That shortage may be contributing to the problem.
    Under these circumstances, I am concerned that the quality 
and availability of Medicare medical services for seniors in 
Alaska is declining, that seniors may have difficulty getting 
their prescription filled if they cannot find a primary care 
physician who will sign off on their refill.
    Poor or inadequate healthcare may lead to illnesses, and 
more costly long-term care, and the State and the Federal 
Government may have to shoulder the burden of these costs. 
Seniors with resources may decide to move to the Lower 48, 
where they can obtain medical care, thus removing your economic 
benefit to the State.
    I read a national editorial recently that suggested 
Medicare reimbursement rates were a form of price control, but 
that so far, it hasn't reduced the supply of medical services. 
With the elimination of the Alaskan differential on Medicare 
reimbursement rates, we may have reached the point where those 
controlled rates are reducing the supply of services in Alaska.
    I think the issue is one of many healthcare-related 
problems we have facing this Nation. We hear of such large 
numbers of uninsured citizens. We also read how increasing 
medical costs are becoming a burden to businesses.
    I encourage the Senate to not only address the Medicare 
issue, but examine some form of comprehensive medical coverage 
that will deal with our broader healthcare problems. Thank you.
    Senator Murkowski. Thank you, Mr. Appel.
    And, let's next go to Mr. Carl Berger, the Executive 
Director at the Lower Kuskokwim Economic Development Council. 
Welcome, good morning, and your comments, please?

 STATEMENT OF CARL BERGER, EXECUTIVE DIRECTOR, LOWER KUSKOKWIM 
              DEVELOPMENT COUNCIL, BETHEL, ALASKA

    Mr. Berger. Thank you, Senator Murkowski. And thank you for 
the opportunity to speak at this meeting this morning.
    I didn't come with any prepared statement, I, in fact, just 
found out about the location of this hearing about an hour ago. 
But, I wanted to come because I've recently turned 65, and I 
had looked forward to getting on to the Medicare program, I'm 
also a retired State employee, although I continue to work at 
another job, and I have a good medical coverage plan for 
working for the State of Alaska, but I don't have a G.P., I 
don't have a physician. My physician that I have gone to for 
over 20 years, here in Anchorage, retired, Dr. J. Caldwell. And 
I have not been able to find anybody else to take his place.
    I guess I have to say, lucky for me--I have a heart 
condition. So, I'm seeing another physician whose specialty is, 
you know, seeing me for my heart condition. But I'm just 
baffled by the fact that in this State, you know, what 
physician in their right mind would want to see me when they 
can only be reimbursed 40 percent of their usual cost. That's 
just, you know, it doesn't jive at all with the way things 
should be.
    I was pleased to see that there was a program in place, up 
until the beginning of this year, I believe, or last year, to 
allow for better reimbursement to physicians. I pointed this 
out in a letter to you and to the other members of the 
congressional delegation, that we must do something about this. 
I'm not speaking only for myself, I'm actually in pretty good 
shape, I do have medical insurance, but there are other people 
in the bush who do not.
    It's difficult to find a physician, even at the Yukon-
Kuskokwim Health Corporation, because they are fully booked, as 
well. And as a non-Native person, I'm not really eligible to be 
seen there, except as an emergency situation. So I don't think 
that's the solution, either. I'm willing to pay my way into 
Anchorage to see a physician. But right now, I can't find one, 
and that's wrong, that needs to be fixed. Not just for me, but 
for a lot of other people around the State.
    So, I guess I'll leave my comments at that, and be happy to 
answer any questions you may have. Thank you for the 
opportunity to speak.
    Senator Murkowski. Thank you. I appreciate the comments 
from all three of you.
    It's one thing to have statistics, it's another thing to 
have the real stories on the ground. And whether they're as 
unscientific as a group of folks sitting around a kitchen table 
talking about what has happened, in terms of denial to access--
these are real-live stories, these are Alaskans that do not 
have access. And, it makes our statistics all that more 
compelling.
    Mrs. Hatch, let me ask you--you'd indicated that you kind 
of conducted a telephone survey of the facilities in Anchorage 
to kind of determine who was accepting new Medicare patients. 
How long ago was this? Or, are you still doing it now?
    Ms. Hatch. This is ongoing.
    Senator Murkowski. You're still doing it now. And, that's 
how you have come to your number of----
    Ms. Hatch. Well, there's three questions we ask. We ask, 
Are you taking new Medicare patients now? Are you taking new 
Medicare patients? Do you take assignment of Medicare? And we 
generally try to get the billing person, or whoever's in charge 
of the bills in the office. And we can call at 1 a.m., and they 
say, ``yes, they are taking new Medicare patients,'' and you 
can call them back in the afternoon to get another telephone 
number, or an address, and they say, ``no, we're not taking 
them.'' So, it's incredible.
    Senator Murkowski. And, as you're kind of acting as a 
facilitator for some of the seniors that you're working with, 
you've suggested that if they can't get into a practitioner, 
that a nurse practitioner is the next best option. But, what 
happens if their medical needs go beyond what a nurse 
practitioner can provide?
    Ms. Hatch. Nurse practitioners usually work with a doctor, 
and they can usually get them in to see a doctor.
    Senator Murkowski. So, we're not seeing the same wall, 
then?
    Ms. Hatch. There's not the same wall. Because if a nurse 
practitioner asks you to, you know, refers you to a doctor, 
they'll generally take them.
    And that's the same with specialists, too. If a doctor 
refers you to a specialist, that specialist will generally take 
you.
    Senator Murkowski. Right.
    Ms. Hatch. As a Medicare patient.
    Senator Murkowski. Mr. Appel, you've mentioned that you 
have--through the Commission--been in conversation with many 
seniors that are focused, and very concerned, on this same 
issue. Is it fair to say that the situation that we're seeing 
here in Anchorage is replicated around the State? Or, do you 
have conversations with folks outside the Anchorage area?
    Mr. Appel. Well, we've had conversations with people in 
some of the smaller communities of this State--Ketchikan, 
Juneau, specifically--because we've held meetings there 
recently. And, it doesn't appear to be as much of an issue in 
those communities. And I can't speculate why that is, but it 
could be that those communities are more insular or more 
intimate, and so physicians may be reluctant to refuse services 
in a smaller community.
    But, most of our comments come from the Rail Belt area--the 
Matsu, Anchorage, and Fairbanks--the larger population areas. 
But, we have not explored this issue in the rural community, so 
I would hesitate to comment and say----
    Senator Murkowski. Does the Commission on Aging do a 
similar thing that Mrs. Hatch has described, in terms of trying 
to do an assessment of who is available to take new Medicare 
patients? Are you involved in that at all?
    Mr. Appel. Well, we examined some of the State 
organizations. At a meeting we had in November, one of the 
Medicare-coordinating agencies for the State suggested they had 
a list of physicians that accepted Medicare, but we found out 
that that was not the case. And so we couldn't--because we 
wanted to advise seniors where they could obtain services. So, 
we have been unsuccessful in finding any kind of a list, or any 
kind of a method of identifying physicians who take Medicare.
    Senator Murkowski. Mrs. Hatch, do you want to weigh in on 
that?
    Ms. Hatch. Just another----
    Senator Murkowski. If you can put the microphone----
    Ms. Hatch [continuing]. That list that Frank is talking 
about, it's on the Medicare web page. And it's doctors who have 
taken Medicare, or are enrolled in Medicare. But that doesn't 
mean they're taking new Medicare patients. So, the list is 
really worthless.
    Also, I don't know if you've had anything to do in 
Fairbanks, but I've gotten reports in Fairbanks that doctors 
are asking for a $300 ``retainer,'' just to take you on as a 
Medicare patient.
    Senator Murkowski. Well, I had a series of Town Hall 
Meetings last year on this issue of the physician shortage--one 
up in Fairbanks, one on the Kenai Peninsula, and one down in 
Juneau--and heard very similar comments and concerns about the 
access issue.
    Mr. Berger, from the Bethel area--you've pointed out that 
your situation might, perhaps, be a little bit different, but 
in terms of access in the more rural parts of this State, I'm 
assuming that you're not an isolated instance, that many are 
faced with the same issues that you have described here this 
morning.
    Mr. Berger. I think they are. One thing I didn't mention in 
my earlier comments was the importance of the continuity of 
care. Having a general practitioner for almost 25 years before 
he retired was important to me. I worked hard to get my medical 
coverage with the State of Alaska, it's good coverage. But, 
it's not much use to me if I can't find somebody who will see 
me on a regular basis. I don't want to have to skip around, 
from one doctor to a nurse practitioner, to a physician's 
assistant. I want to establish a relationship with a doctor 
that I can see on a regular basis. And if he's in Anchorage, so 
be it. If he's somewhere else, that's fine.
    But I don't want to have to be forced to go from one person 
to another who doesn't really know me, and never really does 
get to know me and my medical situation. I think that's very 
important. And, as somebody who has established a career, and 
is now getting ready to retire--having just turned 65--I'd like 
to look forward to having good, reliable, steady care from a 
person, a physician, that I can get to know and feel 
comfortable with, and who will take better care of me than 
somebody who sees me once and never sees me again. Or, maybe 
twice, or three times, and then I'm jumped to somebody else, 
and then somebody else after that. And I think there are other 
people in the bush that are in that same situation that I am 
in.
    Senator Murkowski. I'm going to ask one last question of 
all of you, and it will be the same question.
    Given the array of issues and concerns that face us in 
Alaska and in the Nation regarding healthcare, what is the 
biggest problem? What's the biggest problem--is it access? Is 
it the cost? Very briefly--what's the biggest problem with 
healthcare from your perspective?
    Mrs. Hatch, if you can speak into the microphone.
    Ms. Hatch. Access to doctors, I think, is the most 
important thing. Because if you can't find a doctor, what are 
you going to do?
    Senator Murkowski. Right. Thank you.
    Mr. Appel.
    Mr. Appel. Well, I think, certainly access to doctors by 
seniors over 65 is a huge problem, but I think medical costs, 
in general, having been spiraling, and so I see that as a 
problem as well.
    Senator Murkowski. Mr. Berger.
    Mr. Berger. I think it's access to physicians, but I also 
think the insurance companies who provide coverage to Alaskans, 
need to have a better understanding of the cost of care here, 
and that it's higher. I often get my charges rejected, because 
they're above the usual customary charges. And then I ask my 
doctor--the heart doctor that I can see--he says, ``Oh no, 
there's nobody in Alaska who will provide this service at the 
rate they're willing to reimburse.'' And that kind of makes me 
angry, you know, I pay for my health insurance through my 
employment, and so I've challenged the insurance company to 
say, ``Wait a minute, your usual and customary charge isn't 
really the usual and customary charge in Alaska,'' and you know 
what? They back right down. And so far I've had pretty good 
results on getting them to reconsider and pay.
    But that shouldn't be necessary. Insurance companies that 
are based in Seattle or somewhere else should be willing to pay 
what physicians charge here, or what a service like an 
echocardiogram costs in this State. Yes, you can get an 
echocardiogram done in Seattle, but do they really want to fly 
me down there? Oh, no, they surely do not. But they want to pay 
for what an echocardiogram costs in Seattle, not what it costs 
in Anchorage, or somewhere else here in Alaska. So, that needs 
to be addressed, too. Thank you.
    Senator Murkowski. Very good. I appreciate again the 
testimony, the perspective that you bring, and all that you are 
doing individually, collectively, to help make a difference. As 
you point out, we've got some real problems when it comes to 
access, when it comes to costs, and how we explain our higher 
costs in the State. So, thank you for what you're doing, we'll 
keep working on it as well. Thank you for serving on the panel.
    And with that, we will bring the next panel forward, and 
this is the panel that has been asked to speak to the potential 
solutions to the patient access crisis.
    Having heard from users within the system about the 
problems that we face, we now want to hear from some who would 
offer some suggestions.
    We will have Dr. Ross Tanner, Dr. Harold Johnston, Dr. 
Richard Neubauer, Dr. Byron Perkins, Dr. John Coombs and Ms. 
Karen Perdue join us at the table.
    And for the audience, I'll give a little bit of background 
on each of our panelists this morning. Dr. Ross Tanner is the 
President-Elect of the Alaska State Medical Association; Dr. 
Harold Johnston is the Director of the Alaska Family Practice 
Residency program; Dr. Richard Neubauer here in Anchorage is a 
doctor in internal medicine; we have Dr. Byron Perkins, who is 
the President of the Alaska Osteopathic Association; we have 
Dr. John Coombs, who is the Associate Vice-President for 
Medical Affairs, and the Dean for Graduate Medical Programs 
there, the WWAMI program; and we have Karen Perdue, Associate 
Vice-President for Health at the University of Alaska, and the 
one who will explain to us the details and the findings from 
the Alaska Physicians Supply Task Force.
    So with that, if we can move from you, Dr. Tanner, on down 
the line and I will reserve my questions until all of you have 
had an opportunity to present.
    So, thank you for being here.
    Dr. Tanner.

STATEMENT OF ROSS TANNER, PRESIDENT-ELECT, ALASKA STATE MEDICAL 
                 ASSOCIATION, ANCHORAGE, ALASKA

    Dr. Tanner. Good morning, Senator.
    Senator Murkowski. Good morning.
    I'm going to ask everyone to make sure that that mike is 
pulled pretty close up. I understand it's been tough for some 
of the folks in the back to hear. So----
    Dr. Tanner. As the first physician to testify, I'd like to 
request Secret Service agents to protect my well-being before I 
leave here today.
    [Laughter.]
    But I am the President-Elect of the Alaska State Medical 
Association, and as many of you know, the Alaska State Medical 
Association, or ASMA, represents physicians statewide, and is 
primarily concerned with the healthcare of all Alaskans, and 
that's all Alaskans--young, old, and middle-aged. And I don't 
know how to define old age, other than saying Medicare-age.
    ASMA is also federated with the American Medical 
Association. Welcome back to Alaska, it's nice to see you 
again, and thank you for the opportunity to address you today. 
It is, indeed, an honor to be able to address the Senate 
Committee on Health, Education, Labor, and Pensions.
    Last week, I participated and represented the State of 
Alaska at the AMA National Advocacy Conference in Washington, 
DC., which addressed many of the concerns which we will discuss 
here today.
    As President, I receive no remuneration for my services, or 
the time away from my busy medical practice. So, why would 
anybody want to become involved in organized medicine?
    It is the progressive deterioration of access, as well as 
inefficiency of delivery of healthcare to the citizens of this 
State, and also of people of other States, that--in the last 15 
years, I believe that this is continuing to worsen, and I 
believe the prognosis is poor. This is shameful, given our 
intellectual and financial resources we have as a Nation.
    Today, I would like to provide you with a current 
assessment regarding Alaska's chronic, and currently acute, 
shortage of physicians, and to provide you with ASMA's 
recommendations on how you can help us address this critical 
situation that endangers the healthcare of every Alaskan.
    Currently, Alaska has a shortage of 30 percent of 
physicians, or nearly 400 physicians. Alaska has 10 slots per 
year at the University of Washington Medical School program, 
participation with the collaborative effort between the five 
States, the WWAMI program, which is Washington, Wyoming, 
Alaska, Montana and Idaho.
    Alaska has only one residency program, the Alaska Family 
Medicine Residency, which would train a maximum of 12 residents 
per year. Alaska has a physician workforce that has more age 
than most other States, and over the next 20 years, Alaska will 
need to nearly double the number of physicians, just to keep 
pace with the expected population growth. This requires a net 
increase of 50 physicians per year, given the projection of the 
number of physicians who will leave practice, which will 
require approximately 100 physicians per year to be added to 
the workforce currently.
    Alaska has experienced a large number of retired military, 
Medicare-eligible people, seeking treatment by private 
physicians due to the deployment of Alaskan military physicians 
to the Middle East. These numbers were developed by the Alaska 
Physicians Supply Task Force that we heard about earlier. This 
Task Force was convened by the University of Alaska President, 
Mark Hamilton, and Alaska State Commissioner of the Department 
of Health and Social Services, Karleen Jackson.
    The Task Force reported their findings after working for at 
least 6 months in its report, ``Securing an Adequate Number of 
Physicians for Alaska's Needs.'' ASMA was represented on this 
Task Force by our Executive Director, Mr. Jim Jordan, who is 
with us today, and I believe that you all have been provided 
with this report.
    For Senators and people of this committee that come from 
larger States, some of these issues may not seem that large, at 
face. However, when put in perspective to other States, the 
Alaska picture is, indeed, grim. Alaska has the sixth lowest 
physician to population ration in the Nation, as you earlier 
stated. Most physicians practice within 100 miles of where they 
will complete their residency or specialty training.
    Alaska has only one residency program with 12 slots of 
family medicine residents. By contrast, as reported by the 
Texas Medical Association, Texas has nearly 6,400 resident 
slots in multiple specialties. New York has over 15,000 slots, 
California has nearly 9,000 slots, and Pennsylvania has almost 
7,000 slots--just for residencies. If 12 slots were sufficient 
for Alaska's roughly 650,000 population, that would mean in 
comparison, that Texas' 6,400 slots would be adequate for a 
population of 325 million people--very much underserved.
    Alaska has only 10 slots at the University of Washington 
Medical School, coupled with the 12 family medicine residency 
slots, cannot come anywhere near the growing need that our 
public and our citizens of this State need. Alaska's current 
physician workforce is not sufficient to provide the clinical 
teaching resources necessary to expand the residency program 
itself, for a wide variety of needed specialists.
    An increase in the WWAMI Program, or additional slots 
through other medical schools, will not provide any help for a 
minimum of 10 years, because of the duration of medical 
training that all of us went through that are sitting at this 
table.
    Recruitment costs in Alaska range anywhere from $60,000 to 
upward to $200,000 per physician. I think you will agree that 
the current physician workforce environment in Alaska is in a 
crisis, as we've heard from patients, as well as you're hearing 
from physicians today. This is particularly true when taken in 
the context that Alaska needs to recruit physicians from other 
parts of the country at a time when there is also a nationwide 
shortage of physicians, and it's projected to be between 80,000 
to 200,000 physicians--truly, alarmingly large numbers.
    Before I outline what ASMA recommends for ways in which you 
can help Alaskans get the healthcare they need and deserve, I 
would like to briefly describe what we are doing at a State 
level.
    For the past 10 years, ASMA has been instrumental in 
advocating for legislation that would create and maintain an 
environment conducive to attracting, and most importantly, 
retaining physicians. Those successful measures include major 
liability reform in 1997, and again in 2005--and I want to 
thank you for that--enacting an Alaska Bill of Rights, 
protecting patients, enacting fair contracting provisions for 
relationships between physicians and health insurers, enacting 
Health Insurance Prompt Payment Law, and enacting legislation 
that allows physicians to jointly negotiate with insurers for 
everything but their fees.
    These measures, as well as others, were critical for my 
decision to come to Alaska. If you think it's bad in Alaska, go 
to Washington State--it's worse. Since I've last left the area 
around Olympia, there's been 40 physicians leave since I've 
been here, for 2 years, just in that one community. And before 
I got there, there were 50 physicians left in the preceding 
year. It's worse.
    Currently, ASMA--along with other key organizations, such 
as the Hospital and Nursing Home Association, and the 
University of Alaska--is acting as the catalyst to enact a bill 
to double the WWAMI class size from 10 to 20 medical students. 
The State legislature is expected to act on the bill in early 
2007, so that in the fall, a total of 20 qualified Alaskans can 
enter medical school at the University of Washington.
    ASMA is also exploring ways to develop long-term, 
sustainable funding mechanism for physician education for 
qualified Alaskans.
    Here's what I think you can do too at the national level to 
help Alaska--and patients in Alaska--and really, across the 
Nation. No. 1, enact a legislation that permanently, and I 
stress, permanently, fixes the Medicare physician payment 
system so that it realistically reflects the physician practice 
cost. With rising costs, coupled with shrinking reimbursements, 
this leaves less quality time with your doctor, if you even get 
it.
    In general, I will need to see approximately 45 Medicare 
patients in a day, that produces about the same revenue as 20 
insured patients to equal each other. As an internist, I lack 
the ability to generate revenue by procedures, and am 
compensated for cognitive and diagnostic abilities.
    No. 2, if a patient is new to Alaska, or my patients turn 
65 years of age, it will be nearly impossible to find a primary 
care physician, as we've heard today, eloquently placed by 
patients and our Commissioner. My own mother and father 
encountered this problem. It is certainly nobody's fault for 
turning 65 years of age.
    Alaska reportedly has the second-fastest growing elderly 
population, second only to Nevada. Continued year to year, 
uncertainty created by the flawed sustainable growth rate, or 
SGR formulate, has caused a lack of access to care for Alaska 
Medicare beneficiaries. Medicare payments to physicians in 
Alaska represent 37 to 40 percent of the cost of opening our 
doors each day.
    No. 3, we ask that you support and enact legislation that 
provides tax credits for young physicians to practice in 
frontier States, such as Alaska. Your bill, S. 290, is such a 
bill. This will help Alaska, and other frontier and rural 
States, to attract physicians.
    No. 4, support and enact legislation that revamps the 
funding of graduate medical education. Reforms need to be made 
that recognize residencies, like the family practice residency, 
in Alaska, and make them eligible for Federal funding support, 
as well as other mechanisms that would encourage regional 
residencies between States such as Alaska, Wyoming, Montana and 
Washington State. Furthermore, the latitude to work with Canada 
is needed. Alaska could work in conjunction with Canadian 
medical schools, or with residencies in Western and 
Northwestern Canada to develop joint residencies.
    No. 5, develop programs to help medical students cope with 
the enormous debt of going to medical school. Our best and 
brightest students are being disincentivized from going to 
medical school due to the tremendous educational debt 
associated with medical training. For public medical schools, 
it is an average of $125,000 per student, and for private 
medical schools, it is approximately $200,000 to go to school. 
For those bright students not deterred by the debt, it is 
impacting their choice of specialty training. Many physicians 
are choosing their career path, based on potential future 
income.
    So, now students are often going into more lucrative sub-
specialties, than going into family practice or general 
internal medicine. A way to remove these disincentives must be 
found.
    Others here today will speak to many of these same issues 
that I've mentioned, such as Dr. Johnson, on graduate medical 
education, Dr. Neubauer on the practice of internal medicine, 
Dr. Perkins with primary care and family practice, and I hope 
the testimony today by myself, and others, does not fall on 
deaf ears.
    I would also imagine that it is a rare occasion when a 
specific occupation, business, or trade comes and asks you to 
increase competition. And, as I stated in the beginning, the 
physicians are genuinely concerned with the healthcare of all 
Alaskans.
    I'd be happy to address any questions you may have. Thank 
you.
    Senator Murkowski. Thank you, Dr. Tanner.
    Dr. Johnston.

STATEMENT OF HAROLD JOHNSTON, DIRECTOR, ALASKA FAMILY PRACTICE 
                  RESIDENCY, ANCHORAGE, ALASKA

    Dr. Johnston. Thank you, Senator. It's a great pleasure to 
be able to offer testimony to the committee. And I congratulate 
you on all of the work that you've done to help us so far, here 
in Alaska, with our healthcare crisis issues.
    I'm the Director of the Alaska Family Medicine Residency, 
the only graduate medical education program in Alaska, and I 
also have had the distinct privilege to be the co-chair of the 
Alaska Physician Supply Task Force, whose report has been cited 
several times so far today.
    I appreciate the remarks of Dr. Tanner, much of what he 
said were things that I had intended to say, as well, so I'm 
not going to repeat those. But, I want to emphasize a couple of 
points about things that he said.
    One, about physician education in Alaska--indeed, Alaska 
has the lowest, per capita number of medical school slots in 
the United States, we have the lowest number of residency slots 
in the United States, we have the lowest acceptance rate of 
Alaskan medical students, Alaska students into medical school, 
of any population in the United States. And, the fact that we 
are so far behind is contributing to our crisis----
    Senator Murkowski. Can you repeat that last one? We have 
the lowest number of----
    Dr. Johnston. We have the lowest----
    Senator Murkowski [continuing]. Number of students being 
accepted into medical schools?
    Dr. Johnston. We have the lowest acceptance rate of 
students going into medical schools. In other words, of all of 
the Alaska students who apply to medical school, we have the 
lowest rate of acceptance.
    Senator Murkowski. Thank you.
    Dr. Johnston. Those facts are contributing greatly to the 
crisis that we have in physician supply here. As has been 
stated, rural areas are in tremendous shortage. In rural areas, 
and nonrural areas, we have a lot of specialties that are in 
shortage, primary care is in major crisis, particularly in 
Anchorage, general internal medicine is in extreme and dire 
shortage, although many specialties are in shortage here, as 
well.
    I believe that these problems are related to the 
consequences of national trends. Many of those national trends 
are things that can be affected by Congress, especially in the 
Medicare program, but also in other ways.
    One of the national trends is the national shortage. Years 
ago, in the 1980s, multiple specialties societies, and the 
Council on Graduate Medical Education--using flawed 
methodology--concluded there would be a surplus of physicians. 
As a consequence of that analysis, the Association of American 
Medical Colleges reduced the number of medical student slots 
that they were producing--or reduced their growth rate, anyway, 
and Congress in 1997, capped the number of residency positions 
that were available for funding in the United States.
    About a year after Congress capped the number of residency 
positions, the light started to dawn that the analysis had been 
flawed, and actually, in 2005 COGME reversed its position, and 
stated that its previous analysis was wrong, and that actually 
we were facing a shortage of physicians, and that the caps were 
a mistake. The Association of American Medical Colleges around 
the same time, advocated an increase of medical student 
positions of 30 percent over what currently exists in the 
United States, in order to start the valve--open the valve on 
the pipeline of physician production.
    Well, in Alaska, we have always been a net importer of 
physicians. We don't have much training capacity, as I stated 
before, and so in order to supply ourselves with physicians, we 
have had to recruit them from the Lower 48. Well, when the 
Lower 48 has a shortage of physicians, that makes the 
recruitment to Alaska increasingly difficult, and part of the 
reason that we're seeing the cost of recruitment go up, and the 
cost of absent physicians go up so high across the State, is 
because it is becoming more and more difficult to get doctors 
in here. It used to be that the Indian Health Service would 
assign commissioned officers to Alaska, and the military had a 
different process of assigning physicians to Alaska--many of 
Alaska's physicians came from doctors who were in the 
commissioned corps of the military, and then in their assigned 
rotation, here, fell in love with Alaska and decided to stay 
after their obligations expired.
    Currently, that process is no longer effective in Alaska, 
because the presence of the Indian Health Service in the 
commissioned corps, and the military, has been reduced. The 
commissioned corps has been reduced, the military has changed 
its policies, and so the assignments are in a different 
mechanism that I don't fully understand, but it effects the 
ability of military physicians to enter private practice in 
Alaska.
    So, on one hand, the recruitment problem is partly due to 
the national shortage. That can be traced back to the training 
limitations that have been posed by Congress.
    Second, primary care shortage is due partly to the general 
physician shortage, but also to a great degree to the problem 
of getting doctors to go into primary care. Student debt is 
very high, graduating from medical school. And nonprimary care 
specialties pay much better than primary care. Students are 
responsive, to some degree, to the financial incentives that 
they experience as they enter practice. And the effect of that 
has been to diminish the interest in primary care by graduating 
medical students.
    Part of the reason is the debt--part of the reason is that 
payments to primary care doctors are lower than payments to 
nonprimary care doctors. The testimony earlier today from 
people who have been trying to get Medicare patients into 
doctors has stated that they don't have much trouble getting 
patients into specialists. But they have a terrible time 
getting patients into primary care doctors. As a practicing 
physician, that's my experience, as well. When I have--as a 
primary care doctor--made a diagnosis, and advised the patient 
to seek surgery, or a specialty services, I can refer them to 
one of my specialty colleagues, and unfailingly get that 
patient in to be seen. But, getting the patient in the door of 
the primary care office is the big, big problem.
    One big problem for Alaska, now, is related to these caps 
on residencies. We know what works. Our family medicine 
residency program has been a stunning success. We graduate 12 
residents per year--we will be graduating 12, we're in the 
growth phase now, right now we're graduating 10 per year--but 
in another 2 years, we'll be graduating 12 per year. Seventy-
five percent of our graduates practice in Alaska. Fifty-five 
percent of them practice in a rural community. If you count 
Alaska practice, rural practice, or underserved practice--such 
as an Indian health service, or community health center as a 
target--95 percent of our graduates practice in one of the 
socially desirable target practices. We know how to do it. And 
we're doing a good job of it. But, we can't do enough, because 
they have caps. Our residency program, in 2 years, we'll be 
training 36 residents at a time, but our cap for Federal 
payment is at 22. We can't get that cap lifted, and 
consequently, the program is running at a very large deficit, 
which has been sustained by the private business that sponsors 
it, not by the government or the society as a whole.
    We also need lots more residencies in Alaska. Family 
medicine is not the only specialty we need. We desperately need 
residencies in several other specialties which could easily be 
started in Alaska. There are plenty of talented doctors to 
teach, and plenty of interesting patient cases to learn from. I 
think our experience in the family medicine program indicates 
we could be very successful in recruiting students from other 
schools to come to Alaska to train, but none of these programs 
can start in this State, because there's no Federal money to 
pay for the resident FTEs.
    Most of the other specialties, besides family medicine, can 
only be well-trained in a large community, like Anchorage. And, 
hospitals in large communities like Anchorage are capped. So, 
we need to have relief of these resident FTE caps, in order to 
initiate a funding stream that can start training programs for 
the other doctors.
    I think that as we look into the future of physician 
shortages in Alaska, we have to move forward on all fronts--the 
Physician Supply Task Force identifies a number of them, and 
Dr. Tanner has identified most of them in his comments. We have 
to move forward on the front of retention so that we can keep 
the doctors we have practicing longer, and happier, we need to 
move forward on the front of recruitment, because that's the 
short-term way of getting doctors into the State--if we start 
recruitment efforts now, we'll be able to get doctors soon.
    But, those two efforts are not going to be enough, in the 
long run. We have to also start training our own doctors in 
much larger numbers, because as the competition for physicians 
gets tighter and tighter around the United States, unless we're 
training our own, we are always going to be unable to attract 
the doctors that we need for this State.
    With that, I'll conclude my testimony, and answer your 
questions.
    Senator Murkowski. Very interesting comments, thank you, 
Dr. Johnston.
    And next, let's go to Dr. Richard Neubauer. Welcome, and 
good morning.

 STATEMENT OF RICHARD NEUBAUER, INTERNAL MEDICINE, ANCHORAGE, 
                             ALASKA

    Dr. Neubauer. I'm very pleased to give this testimony.
    Besides being a general internist here in Anchorage, I also 
serve on the Board of Regents for the American College of 
Physicians, which is the second-largest physician group in the 
country, representing about 120,000 general internists, and 
other internists. Second only to the American Medical 
Association.
    As I listen this morning, it struck me that one thing that 
hasn't been said is how much joy there is in being a doctor. 
You know, I really love my job, I enjoy being a general 
internist, it's a wonderful job--perhaps the best job in 
medicine. And it's a real tragedy that we have to be here 
talking about the delivery of medical care, or the lack of 
access to medical care, in the way we are.
    So, just prefacing my remarks, I think that this is very, 
very important.
    While there are shortages in many specialties in medicine, 
it's the shortage of primary care physicians--and, 
specifically, general internists--that concerns me the most. In 
my view, these areas of medicine are actually near collapse, 
both here and nationally. And are critically threatened, unless 
there are prompt actions that are taken to reverse these 
current trends.
    When I graduated from medical school at Yale University in 
1976, and then did my internship and residency at the 
University of Michigan from 1976 to 1979, the majority of my 
classmates wanted to be internists of one sort or another.
    Nowadays, that's very different. And, the majority of 
medical school graduates want to pursue careers in radiology, 
ophthalmology, anesthesia or dermatology, because these areas 
of medicine have a kindlier lifestyle, better pay, and are 
perceived to have better prestige than what I do right now. 
This is especially tragic, I think, because with an increasing 
elderly population, the need for general internists who are 
skilled in the management of complex medical problems is 
increasing, and will continue to increase. And, I think the 
testimony that's been given earlier today testifies to that, as 
well.
    After leaving my residency training and completing a 
scholarship obligation with the Indian Health Service in 
Wyoming, I came to Alaska in 1981, and have been in practice 
here since. When I started my career, I typically cared for 10 
or 15 hospitalized patients, took many admissions from the 
emergency room, and worked, as well, full-time in my office, 
and didn't get home until really late at night.
    Over 25 years of practice, I've watched as many of my 
colleagues in internal medicine have retired, moved away, or 
moved on to other things. With very few exceptions, as these 
physicians have left their practices, they have been unable to 
find young physicians to take their place, and have simply 
closed their doors. And, with that, their patients have been 
scattered to the wind, hopefully to find other doctors, 
oftentimes not being able to.
    And, nowadays, when this happens here in Anchorage--
especially if these patients are covered by Medicare, they 
can't find doctors to care for them.
    An example of that was, a physician in my office who 
retired earlier this year, and we've literally had patients 
coming to the front desk in tears, trying to find a physician 
to care for them. And we try to help with that, as much as we 
can, but it's very limited, given limited manpower 
capabilities.
    The reason for this is because these patients have very 
complex problems, that take a lot of time to take care of 
properly. And frankly, the reimbursement for seeing them does 
not even cover the overhead of operating an office.
    So, as has been said by others, these patients are destined 
to use the emergency room for their primary care, and that's 
both inexpensive and inefficient. And, oftentimes, these 
patients may also neglect their problems until they become more 
far advanced, and are thus either harder, or impossible, to 
treat.
    Right now, unfortunately, there's virtually no financial 
incentive for a young primary care physician, in internal 
medicine, to come start a private practice in this city. The 
remuneration for their efforts would simply not be enough to 
justify the work involved, and the overhead of operating an 
office.
    Starting in the mid-1990s, in Anchorage and elsewhere, 
there was an advent of a new area of medicine called 
``hospitalice medicine,'' this is internists who only work in 
the hospital, and this even further changed the dynamics of 
care in Anchorage, and around the country.
    Right now, in general, internists who are coming out of 
training programs are only interested in getting hospitalice, 
and not operating in an office. This is, again, due to the high 
overhead of office practice, the burden of unreimbursed work in 
an office, and the threat of punitive audits, the long hours, 
constant need to be on-call, and low compensation, in general, 
for the work in our current reimbursement system.
    With the ascendancy of hospitalice practice, this has 
certainly benefited functionality of inpatient care, but it 
has, unfortunately, come at the expense of promoting a further 
decline--critical decline--in the interest of providing long-
term management in ambulatory or outpatient settings.
    Right now, in Anchorage, by my count--and I could be off a 
little bit on this--there are about 18 general internists 
working in office settings, and by comparison, there are 
approximately 30 cardiologists in Anchorage. And this is just 
not a healthy mix.
    A sad truth is that if I--at age 57, not quite 65, but 
getting there--were to become incapacitated, or otherwise leave 
my practice, it's highly unlikely that anyone would be around 
to take my place, and my patients would be without a physician.
    Let me just present an example from my own practice of how 
coordination of care of a patient by primary care physicians 
can result in better outcomes, and lower costs, but is actually 
not reimbursed by the current system.
    I currently care for a man in his fifties who, tragically, 
has had a series of strokes and heart attacks at a very young 
age. He suffers with congestive heart failure, but with modern 
medical management, has lived with these conditions for a 
number of years, whereas in the past, he probably would have 
been dead by now. He also has diabetes, hypertension, many 
psychological issues that have complicated his care. And I 
share his care with a cardiologist, but for quite some time, he 
was visiting the emergency room on a regular basis with chest 
pain, was often admitted to the hospital at great cost, and 
with no particular benefit to his care.
    By intervening and allowing him open telephone access to my 
nursing staff, to the physician assistant, who I recently hired 
to help me, and having him come to my office for frequent 
reviews of his medications with my staff, we've been actually 
able to avert most of his emergency room visits.
    This was done with low-cost office visits, unreimbursed 
time in person and on the telephone with him, and the monetary 
savings to the system were tremendous. Whereas the monetary 
benefit to my office was modest.
    What can be done about these problems? I think both here 
and in Alaska and nationwide, a further study of the manpower 
needs for primary care services is sorely needed. In my view, 
the current methods that CMS uses to track access to care are 
very blunt tools that, just frankly, don't reflect reality. 
It's my view that a robust, primary care presence in our 
country will require a restructuring of the payment systems in 
a way that reflects the importance of primary care services, 
with recognition that much of what we currently do is 
unreimbursed.
    I think management fees, above and beyond traditional fee-
for-service reimbursement, would be one step, at least, in 
recognizing the value of primary care of the patient, and needs 
to be strongly considered.
    I think new models of care, such as the advanced medical 
home concept proposed by the American College of Physicians, 
has promised to increase the attractiveness of internal 
medicine as a career. This model relies heavily on electronic 
medical records to improve the functionality and accountability 
of practices, and to improve the delivery of preventive 
services, but the implementation of this technology, namely 
electronic health records, has been hampered by high cost, and 
difficulty of deployment in busy offices.
    We do have an HER, Electronic Health Record alliance here, 
that has been formed by the APS, the Alaska Physicians and 
Surgeons, the Alaska Chapter of the American College of 
Physicians, and the State Medical Association to try and 
address this, and we're trying to get funding for a pilot 
program here to see how we could implement these records 
better.
    I think medical training programs need to be re-designed to 
encourage students to consider careers in internal medicine, 
and primary care, but that has not been happening in a 
concerted fashion, partly due to entrenched interests, and 
perverse incentives. And this certainly needs to change.
    As has been said, students are burdened with so much debt 
coming out of medical training, that they're pushed into higher 
paid specialties by necessity. In an effort to fill positions 
that graduates of American medical schools are not interested 
in, as a Nation, we've been robbing other countries of their 
own talented physicians, but importing foreign graduates, and 
this is certainly not a good, long-term global strategy.
    In summary, I think we stand at a critical time in the 
design of delivery systems within our medical communities. 
Certainly, inaction at this time will have very predictable 
results. A lopsided supply of physicians in very high paid 
specialties, coupled with access to care problems for patients 
who want the guidance of a physician to coordinate their 
medical care.
    There are things we can do to positively shape the future, 
but this will require, I think, courage and conviction, and I 
certainly applaud your efforts in this regard.
    I'll conclude by asking that the HELP committee require a 
study and report on ways that the Federal Government can 
increase the attractiveness of primary care, including 
consideration of programs to eliminate or reduce student debt, 
for those who go into primary care, redesigning Federal support 
for medical education, to expose medical students to well-
functioning models of community-based primary care, and changes 
in Federal reimbursement policies to support the value of 
primary care.
    Thank you very much.
    Senator Murkowski. Thank you, Dr. Neubauer. I appreciate 
your testimony.
    And, let's move over to the other table here, we have Dr. 
Byron Perkins, the President of the Alaska--I was going to say, 
it's not the American Osteopathic Association, you're the 
Alaska rep for the American Osteopath.

 STATEMENT OF BYRON PERKINS, AMERICAN OSTEOPATIC ASSOCIATION, 
   PRESIDENT OF THE ALASKA OSTEOPATHIC MEDICAL ASSOCIATION, 
                       ANCHORAGE, ALASKA

    Dr. Perkins. That's correct. Thank you, Senator Murkowski.
    Senator Murkowski. Thank you, and welcome.
    Dr. Perkins. I am Byron Perkins, and I am a practicing 
osteopathic family physician here in Anchorage, and I am the 
President of the Alaska Osteopathic Medical Association, AKOMA.
    I've had the privilege of working in Alaska 4 years in 
Nome, and 7 years with the Alaskan Native Medical Center, and 
now in primary care/private practice in Anchorage.
    I'm honored to be here today representing the American 
Osteopathic Association, and AKOMA. The AOA represents the 
Nation's 59,000 osteopathic physicians, and over 12,000 
osteopathic medical students, and we applaud your interest in 
this very timely discussion, and important issue.
    Much of my testimony will echo the findings of the Alaska 
Physician Supply Task Force Committee. We applaud their work, 
we were able to participate in testimony on their efforts. Much 
of my testimony will echo some of the testimony already 
presented.
    The AOA recognizes that many communities in the United 
States face limited access to physicians, and physician 
services. We've heard that today, this is especially true in 
rural and frontier communities, and really so in Alaska. And 
for more than 130 years, AOA has been dedicated to training and 
educating the future physician workforce. We have a tradition 
of turning out primary care physicians. More than 65 percent of 
our students, physician graduates, practice in primary care, 
and that trend has been historical.
    In Alaska, there are 115 licensed osteopathic physicians, 
77 of those physicians practice in primary care, roughly 69 
percent. They practice in diverse communities, from places like 
Barrow, and Bethel and Craig and Klowak, Nome, Gotsebu, and 
Anchorage/Fairbanks, Juneau.
    Over the past 15 years, the osteopathic profession has 
enjoyed tremendous growth. We are currently one of the fastest-
growing professions in healthcare. Since 1990, the osteopathic 
physician numbers have increased 67 percent, there are 
currently about 59,000 osteopathic physicians in the United 
States, we are still a minority in physician groups. About 6 
percent of all physicians in the United States are osteopathic 
physicians.
    As our membership grows, the AOA is refocusing our efforts 
on our core mission, which is training physicians who are 
capable and willing to provide high-quality care to our 
Nation's neediest populations, particularly in primary care.
    Many experts believe that we are in a shortfall, we in 
Alaska have made the same conclusion--we are in a physician 
shortage. If we begin to work on that effort now, we can make a 
difference, as we begin to educate and train a larger number of 
physicians in the immediate near future.
    The time it takes to educate and train a physician is 
anywhere from 7 to 14 years, and that means anybody starting in 
school today won't be available to serve for at least 7 years, 
particularly in primary care. And due to the time education 
requirements for future physicians, we believe a concerted 
effort must be made now, and that is what most of my testimony 
is referencing today.
    Today, one in five medical students in the United States is 
in osteopathic medical school. Currently, there are 23 colleges 
of osteopathic medicine, operating on 26 campuses. There are 
two additional colleges that will open within the next 2 years, 
bringing the total number of colleges to 25, operating on 28 
campuses. In 2007, those colleges will graduate approximately 
3,000 new physicians, by 2008, approximately 3,500 physicians, 
and by the year 2015, we are projecting 5,000 new physicians 
per year.
    We, in Alaska, are especially proud of the Pacific-
Northwest University of Health Sciences, projected to open in 
the year 2008 in Yakima, Washington. This has been a 
collaborative effort, and by the five Northwestern States, and 
the associations in those States, we believe the opportunity to 
participate in this will give us more direct influence on the 
number of students, and the type of students that will be 
referring and matriculating to this facility. I'm optimistic 
that when it begins operating, it will be a direct contributing 
factor to Alaska's physician workforce, in the future. And that 
recommendation did come forward in the Physician Supply Task 
Force recommendations.
    Medical schools, and colleges of osteopathic medicine 
traditionally place significant emphasis on an applicant's 
academic achievement. We agree with this, but we also believe 
that medical school should be looking at the whole person, that 
is something that is traditionally done in the osteopathic 
applications process. Particularly, when a student from Alaska, 
or from a rural community, is evaluated--they should meet all 
of those academic requirements, but at the same time, there is 
something desirable about placing a student from a rural 
community into a medical school.
    If two students are equally qualified, we would encourage 
schools to matriculate students from the rural communities. 
Much of the same testimony has come forward.
    Additionally, our medical education system must increase 
its efforts to promote both primary care specialties, and 
experience in rural practice locations. It's already been 
testified to by Dr. Johnston and Dr. Neubauer. The role of the 
family physician and the internal medicine physician generalist 
is less glamorous, less rewarding financially, and yet I would 
echo what Dr. Neubauer said, this is the greatest thing in the 
world to do. I love my work, I wouldn't trade it for anything, 
I am blessed to be an osteopathic physician.
    The issues facing our Nation's rural healthcare system are 
complex, and there are no easy answers. The AOA recommends five 
policy changes that we believe will lead to improved access to 
physician services, and increase the availability of U.S.-
trained physicians. And, I would like to list those now.
    No. 1, the Congress should consider eliminating the cap on 
available, and funded, residency positions in the United 
States. Dr. Johnston spoke to this, there are currently, 
approximately 96,000 funded residency positions. The number of 
funded residency positions has been static since the 1990s, 
when the Balanced Budget Act of 1997 put a cap on residency 
positions. This severely limits our ability to increase the 
residency positions available here, in Alaska--not just Alaska, 
all of the Pacific Northwest.
    The AOA encourages Congress to either remove or increase 
the caps on the number of funded, graduate medical education 
training slots, as established by the Budget Act of 1997. This 
past week, legislations were introduced in the Senate that 
would accomplish this goal. The Resident Physicians Shortage 
Reduction Act of 2007, increases the cap adjustments for 
teaching hospitals in eligible States, where there is a 
demonstrated shortage of resident positions. Alaska is 1 of 24 
States that would benefit from this legislation, and AOA 
supports this legislation, and urges all Senators to go sponsor 
this important bill.
    We would, in that vein, support the Physician Shortage 
Elimination Act that you referenced in your opening statement. 
I think it's the right direction to move.
    No. 2, in addition to expanding the training capacity at 
existing teaching hospitals, we feel desperately, the need to 
create new training hospitals at new hospitals. There is the 
known adage that most physicians will end up practicing within 
100 miles of where they do their postgraduate training. With 
the limited number of postgraduate sites--not only in Alaska, 
but in the Pacific Northwest, that limits the number of 
recruitment opportunities we have in bringing qualified 
physicians to Alaska. And, as previously testified, we are 
always recruiting from outside, we can't produce enough at our 
current levels to sustain our needs.
    Currently, a majority of allopathic and osteopathic 
residency training programs exist in or near the major 
metropolitan cities. Dr. Tanner talked about the large number 
in the State of Texas. And, while those current programs 
continue to excel at producing high-quality physicians, they 
don't adequately distribute physicians to communities across 
the Nation, and particularly to places like Alaska.
    A major obstacle often preventing the establishment of new 
residency training programs, are the costs associated with 
startup. The AOA proposes the creation of a new program that 
would assist communities, and rural hospitals, in their efforts 
to establish new residency training programs.
    Under the Physician Workforce and Graduate Medical 
Education Enhancement Act, the Secretary would be directed to 
establish an interest-free loan program, whereby hospitals 
committed to starting a new allopathic or osteopathic residency 
program, would secure startup funding to offset the initial 
startup costs. Congress would be asked to allocate adequate 
money to establish and fund the program. To be eligible, a 
hospital would demonstrate that they do not currently operate a 
residency training program, and they must commit to operating a 
residency program in one of the five medical specialties of 
primary care--family medicine, internal medicine, pediatrics, 
OB/GYN, and possibly, general surgery. Hospitals securing a 
loan under the program would be obliged to repay the total sum, 
without interest, to the Secretary.
    I was just at a meeting last weekend in Portland, the 
Northwest Osteopathic Conference of States, and there's a small 
hospital in eastern Oregon who is attempting to start a rural, 
community-based family practice residency program. And they 
were there with their CFO, and their hospital administrator, 
and two of their physicians, basically trying to find out how 
they were going to come up with the funding to make this work. 
The desire is there, the need is there. They can't supply their 
physician staff resources, and they thought with residency 
training, not only could they grow their own, but they could 
help offset some of the local physician shortages that already 
exists. Startup costs are prohibitive. As Dr. Harold Johnston 
said earlier, our residency program has been operating at a 
deficit since its inception.
    I would say that the Alaska Family Medicine Program has 
been very kind to us, as an osteopathic professional. They have 
sought our participation from the beginning, and just last 
year, hired an osteopathic Physician Director of Medical 
Education, and that program is now a dually-certified program, 
so osteopathic medical students can do their residency training 
at the Family Practice Program and get dual certification from 
the AOA. And, we are currently, the only operating osteopathic-
approved training program in the entire Northwest, at 
Providence Hospital.
    No. 3, Congress should enact legislation that would 
establish, in statute, clear and concise guidance on the use of 
ambulatory, nonhospital sites in graduate medical education 
programs. While the majority of physician training takes place 
in the hospital setting, it should not be limited to this 
setting. We need to do more to expose medical students--and 
resident positions--to different practice settings during their 
training years. And the Alaska Family Medicine Residency 
Program has done an excellent job of providing that 
opportunity.
    In 2002, the Centers for Medicare and Medicaid Services 
began administratively altering the rules. Began denying the 
time that residents spend in nonhospital settings. As a result, 
hospitals are being forced to train all residents in the 
hospital setting, eliminating the valuable, educational 
experiences offered in the non-hospital training sites. 
Additionally, some teaching hospitals may be forced to 
eliminate programs, as a result of the current CMS policies.
    Allowing hospitals to receive payments for the time 
resident physicians train in a nonhospital setting is sound 
educational policy, and a worthwhile public policy goal that 
Congress clearly mandated. Additionally, it would be good for 
us in rural communities.
    No. 4, Congress should amend the tax code to allow 
practicing physicians in rural communities an annual tax credit 
equal to the amount of interest paid on their student loans. 
Last year, Senate bill 2789 was introduced, directly addressing 
tax credits in that regard. I believe you sponsored that 
legislation. We supported that as an association, and we would 
support that type of legislation in the future.
    We believe this proposal is a direct incentive to young 
physicians, and would assist in the recruitment and retention 
of physicians in rural communities.
    Additionally, Congress should revise current scholarship, 
and loan payment programs, to allow physicians to fill their 
commitment on a part-time basis, as with the National Health 
Service Corps.
    No. 5, Congress should reform the Medicare Physician 
Payment Formula, by eliminating the sustainable growth rate, 
and replacing it with a more equitable, and predictable, 
payment structure. This testimony has already been brought 
forth. Additionally, Congress should make permanent provisions 
that establish a floor of 1.0 for their work, geographic 
practice cost indices, and provide a 5 percent add-on for 
services provided by physicians, in recognized Medicare-
scarcity States, which Alaska certainly is.
    Again, we thank you for focusing your attention on this 
important issue. The AOA, and the AKOMA and our members stand 
ready to assist you and the committee, as you develop policies 
aiming at improving access to physicians and physician 
services. I look forward to your questions.
    [The prepared statement of Dr. Perkins follows:]

                Prepared Statement of Byron Perkins, DO

    Senator Murkowski and distinguished members of the committee, my 
name is Byron Perkins. I am a practicing osteopathic family physician 
in Anchorage and currently serve as the President of the Alaska 
Osteopathic Medical Association. I am honored to be here today 
representing the American Osteopathic Association (AOA). The AOA, which 
represents the Nation's 59,000 osteopathic physicians and over 12,000 
osteopathic medical students, applauds the committee's interest in 
examining this very important issue. Access to physicians and other 
healthcare services for people residing in rural and other underserved 
communities is a serious problem. The AOA believes that access to 
physician services in rural and other underserved communities can be 
improved by increasing training and workforce opportunities along with 
developing new programs that aid in the recruitment and placement of 
osteopathic and allopathic physicians.
    We recognize that many communities in the United States face 
limited access to physicians and physician services. This is especially 
true in rural and frontier communities. We applaud the efforts made by 
State governments, the Federal Government, Members of Congress, and 
rural communities to increase physician access for their citizens. 
However, like you, we believe much more should be done.
    For more than 130 years the AOA and the osteopathic profession has 
been dedicated to educating and training the future physician 
workforce. Consistent with our mission, we remain committed to 
producing primary care physicians who will practice in rural and other 
underserved communities. This mission has been a tenet of the 
profession since it's founding in the late 1800's. Today, more than 65 
percent of all osteopathic physicians practice in a primary care 
specialty (family medicine, internal medicine, pediatrics, and 
obstetrics/gynecology). In Alaska, there are 112 osteopathic 
physicians. Seventy-two of these osteopathic physicians practice in a 
primary care specialty, 59 are family physicians [Maps 4 and 5]. 
Nationwide, more than 100 million patient office visits are made to 
osteopathic physicians each year.
    Over the past 15 years the osteopathic profession has enjoyed 
tremendous growth. We are one of the fastest growing professions in 
healthcare. Since 1990 the number of osteopathic physicians has 
increased 67 percent. Currently, there are 59,000 osteopathic 
physicians in the United States. The number of osteopathic physicians 
in the United States is projected to exceed 90,000 by 2015. Osteopathic 
physicians represent 6 percent of the current U.S. physician workforce 
and over 8 percent of all military physicians.
    Throughout our history, the osteopathic profession has placed an 
emphasis on primary care and rural service. Our commitment to these 
goals is reflected in our membership and in the mission statements of 
the Nation's colleges of osteopathic medicine. Our emphasis on primary 
care and rural practice is reflected by the fact that currently 22 
percent of osteopathic physicians practice in a designated medically 
underserved area (MUA) (Map 1). As our membership grows, the AOA is 
refocusing its efforts on our core mission--training physicians who are 
capable and willing to provide high quality care to our Nation's 
neediest populations.
    The issues facing our Nation's rural healthcare system are complex. 
We do not suggest that there are easy answers, but we do believe that 
change in some policies would increase our ability to meet these needs.
    The following pages outline several recommendations. These 
recommendations would improve the ability of the AOA and our allopathic 
colleagues to meet the needs of rural and other underserved 
communities. We believe that the implementation of these 
recommendations will allow the U.S. medical education system to meet 
its responsibilities of training physicians who will provide quality 
healthcare to all populations regardless of their geographic location.

                          PHYSICIAN WORKFORCE

    Many experts now believe that the United States will face a 
shortfall in its physician supply over the next 20 years. While 
academic and policy experts debate the needs and expectations of the 
future physician workforce, the AOA recognizes that we must begin to 
educate and train a larger cadre of physicians, now.
    The time it takes to educate and train a physician is, at minimum, 
7 years. This means that a student accepted in the matriculating class 
of 2007 will not enter the physician workforce until at least 2014. Due 
to the time required to educate and train future physicians, we believe 
a concentrated effort must be focused on increasing the Nation's 
physician education and post-graduate training capacity over the next 5 
years. If handled appropriately, the country could increase the 
physician workforce dramatically by 2020.
    Reliance upon the J-1 Visa program is neither the most effective 
nor the most desirable way to increase physician supply in rural 
communities, although we recognize that the program can provide short-
term relief. The J-1 program is not capable of meeting the physician 
workforce needs of our Nation and should not be promoted for this 
purpose. Yes, a few States and communities have physician services as a 
result of the J-1 program. However, thousands of rural communities 
remain without physician services. The AOA supports increasing our 
capacity by adopting policies that encourage larger numbers of U.S.-
educated and trained physicians to practice in rural and underserved 
areas. An increase in U.S.-educated and trained physicians, if properly 
selected and trained, will lead to a more predictable and reliable 
physician workforce and is more likely to produce larger numbers of 
physicians who will practice in rural communities.
    Today, one in five medical students in the United States is 
enrolled in a college of osteopathic medicine. Fifty percent of the 
students enrolled in the Nation's colleges of osteopathic medicine are 
women. Currently, there are 23 colleges of osteopathic medicine 
operating on 26 campuses (See Map 2). There are two additional colleges 
that will open within the next 2 years, bringing the total number of 
colleges to 25 that are operating on 28 campuses. In 2007, these 
colleges will graduate approximately 3,000 new osteopathic physicians. 
In 2008, the number of graduates will increase to 3,500. By 2013 the 
number of osteopathic physicians graduating from colleges of 
osteopathic medicine is projected to reach 4,500. Assuming a 
predictable growth pattern, the osteopathic profession should produce 
approximately 5,000 new physicians per year beginning in 2015.
    The current colleges of osteopathic medicine, and those set to open 
in the future, are located in regions that historically have had 
limited access to physician services. Currently, there are three 
colleges of osteopathic medicine in Appalachian region, one in Las 
Vegas and one developing in Denver--two of the Nation's fastest growing 
communities, three colleges in the States of Missouri and Oklahoma, and 
Yakima, Washington--which aims to meet the needs of several Northwest 
States including Alaska. The location of current and future colleges of 
osteopathic medicine reflects the osteopathic profession's commitment 
to rural and underserved communities.
    In Alaska, we are especially proud of the Pacific Northwest 
University of Health Sciences (PNUHS) in Yakima, Washington, which will 
begin classes in 2008. Along with my colleagues in Alaska, I am 
optimistic that PNUHS will begin contributing to Alaska's physician 
workforce in the near future. The AOA urges the Alaska legislature to 
develop new programs that encourage a significant number of Alaska 
residents to pursue their medical education at the PNUHS College of 
Osteopathic Medicine.

                    INTERNATIONAL MEDICAL GRADUATES

    The U.S. healthcare system is widely recognized as the most 
advanced in the world. The rapid development of new diagnoses and 
treatments outpaces those in other countries. We are the world's leader 
in medicine and medical technology. In this role, we should share our 
expertise with the world. For this reason, the AOA supports the 
continued acceptance of international medical graduates (IMGs) into the 
U.S.-graduate medical education system. By training international 
physicians, we can improve the healthcare delivery systems around the 
world by improving the quality of the physicians. However, this 
transfer of knowledge and skills cannot take place if international 
physicians do not return to their home countries.
    The United States should not be an importer of physicians. The 
majority of international physicians should come to the United States 
to train and then return home. The ``brain drain'' in many countries is 
well documented. Many countries lose their best and brightest young 
physicians to the United States and other English-speaking countries. 
International physicians should come here to train and should not be 
encouraged to stay upon completion of their training. In fact, we 
should require that they return to their home countries and practice 
medicine for an extended period of time before they are eligible to 
petition for a visa, J-1 or otherwise.
    In 2006, almost 9,000 IMGs participated in the National Residency 
Matching Program (NRMP). Of these applicants, approximately 6,500 were 
not U.S. citizens and 2,500 were U.S. citizens who attended a foreign 
medical school. Almost 50 percent of all IMGs match to first year 
residency positions. In 2006, the total number of IMGs who matched to 
first year positions increased to 4,382.
    Of the 6,500 IMG participants who were not U.S. citizens, 3,151 
(48.9 percent) obtained first year positions. 2006 was the fifth 
consecutive year that the number of non-U.S. citizen IMGs matching to 
first year positions increased. Of the 2,500 U.S. citizen IMG 
participants, 1,231 (50.6 percent) were matched to first year 
positions. 2006 was the third consecutive year that the number of U.S. 
citizen IMGs matching to first year positions increased. The total 
number of IMGs filling first year residency positions will be much 
higher than the approximate 4,400 who secured positions through the 
NRMP. Many IMGs are able to secure residency training positions outside 
the match.

                       RECRUITMENT AND PLACEMENT

    Medical schools and colleges of osteopathic medicine traditionally 
place significant emphasis on an applicant's academic achievement--
grade point average, undergraduate degree program, and scores on the 
Medical College Admission Test (MCAT). While we would never suggest 
that the academic standards required for admittance be lowered, we do 
recommend that the Nation's medical education institutions begin 
evaluating ``other'' factors. An evaluation of the student's life, 
including an evaluation of where the student was raised, attended high 
school, and location of family members, provides an indication of where 
a future physician may practice. For example, an applicant from 
Manhattan, New York is less likely to practice in a rural community 
than an applicant from Manhattan, Kansas. If the two applicants are 
equally qualified, we should encourage our schools to matriculate the 
student from Manhattan, Kansas, an individual more likely to return to 
rural Kansas once education and training is completed.
    Our medical education system must increase its efforts to promote 
both primary care specialties and experience in rural practice 
locations. Over the years, the role of the rural family physician 
became less glamorous than that of the urban subspecialist. Far too 
many medical school students want to be an ``ologist'' instead of a 
general surgeon, family physician, general internist, or pediatrician. 
Our Nation's healthcare system needs specialists and subspecialists, 
but we need far more primary care physicians. Our medical education 
system must place greater emphasis on educating and training primary 
care physicians and general surgeons. These physicians are more likely 
to practice in a rural or small community hospital and are far more 
likely to practice in rural America.
    The AOA believes that programs funded and operated under Title VII 
of the Public Health Service Act are essential to achieving the goals 
outlined above. Over the past 5 years, title VII programs have seen a 
dramatic decrease in both support and funding. We urge Congress to 
reverse this trend and place greater emphasis on these important 
programs.

                       INCREASE TRAINING CAPACITY

    Currently, there are approximately 96,000 funded residency 
positions in the United States. The number of funded residency 
positions has been static since the late 1990's when Congress, as part 
of the Balanced Budget Act of 1997, placed a limit or ``caps'' on the 
number of funded residency slots any existing teaching program may 
have.
    The residency caps were established at a time when the general 
consensus was that the country had an adequate supply of physicians. We 
now recognize this is not correct. The residency caps established by 
the BBA limit the ability of teaching hospitals to increase training 
programs, thus preventing responsible growth capable of meeting our 
future physician workforce needs. The AOA encourages Congress to either 
remove or increase the caps on the number of funded graduate medical 
education training ``slots'' as established by the Balanced Budget Act 
of 1997.
    This past week, Senators Harry Reid and Bill Nelson introduced the 
``Resident Physician Shortage Reduction Act of 2007.'' This legislation 
authorizes the Secretary of the Department of Health and Human Services 
(HHS) to increase the number of residency cap positions for which 
Medicare payments will be made if certain criteria are met. The 
increases or cap adjustments target teaching hospitals in eligible 
States where there is a demonstrated shortage of resident physicians. 
States would be considered to have a shortage of resident physicians if 
its ratio of allopathic and osteopathic physicians training in ACGME or 
AOA approved residency and/or fellowship programs is below the national 
median number per 100,000 population. According to current statistics, 
the national median number of resident physicians per 100,000 
population is 25. Teaching hospitals in 24 States would be allowed to 
increase their FTE cap under the proposed formula.
    The AOA supports this legislation and urges all Senators to 
cosponsor this important bill. Furthermore, we call upon the Senate to 
approve this legislation this year.

                    IMPROVE RURAL TRAINING PROGRAMS

    There is an old saying in medical education circles that physicians 
will practice within 100 miles of where they train. While the validity 
of this saying either in a world that is limited to the United States' 
borders or alternatively in an era of globalization is unproven, its 
message rings true. Physicians are more likely to practice in settings 
where they have the most experience. While a majority of physician 
training takes place in the hospital setting, it should not be limited 
to this setting. We need to do more to expose medical students and 
resident physicians to different practice settings during their 
training years.
    A valuable component of graduate medical education is the 
experience of training at nonhospital ambulatory sites. These sites 
include physician offices, nursing homes, and community health centers. 
Ambulatory training sites provide an important educational experience 
because of the broad range of patients and conditions treated and by 
ensuring that residents are exposed to practice settings similar to 
those in which they ultimately may practice. This type of training is 
particularly important for primary care residency programs since a 
majority of these physicians will practice in nonhospital ambulatory 
clinics upon completion of their training. This training also is 
essential to improving access to care in rural communities.
    Congress has long recognized that a greater focus should be placed 
on training physicians in rural and other underserved communities. In 
the 1990s, Congress began to fear that the current graduate medical 
education payment formula discouraged the training of resident 
physicians in ambulatory settings. This opinion was based upon the fact 
that the payment formula only accounted for the resident training time 
in a hospital setting.
    Through the Balanced Budget Act of 1997, Congress altered the 
payment formula, removing the disincentives that existed for training 
in nonhospital settings. We accomplished this goal by allowing 
hospitals to count the training time of residents in nonhospital 
settings for the purpose of including such time in their Medicare cost 
reports for both indirect medical education (IME) and direct graduate 
medical education (DGME) payments.
    This change in the payment formula was designed to increase the 
amount of training a resident physician received in nonhospital 
settings, enhance access to care for patients in rural and other 
underserved communities, provide an additional education experience for 
residents who are considering practicing in rural communities, and 
provide a recruitment mechanism for rural and underserved communities 
in need of physicians.
    The program appeared to be working as intended. However, in 2002 
the Centers for Medicare and Medicaid Services (CMS) began 
administratively altering the rules and regulations in respect to this 
issue. As a result, CMS intermediaries began denying the time residents 
spent in nonhospital settings. In many cases, hospitals were forced to 
repay thousands of dollars as a result of this administrative change in 
regulations.
    Many Members of Congress urged CMS to work with interested parties 
to resolve this issue by developing new regulations that clarify the 
appropriate use of nonhospital settings. Unfortunately, these 
conversations have not produced policies that meet the original intent 
of Congress as established in 1997. As a result, hospitals are being 
forced to train all residents in the hospital setting, eliminating the 
valuable educational experiences offered in nonhospital training sites. 
Additionally, some teaching hospitals may be forced to eliminate 
residency programs entirely as a result of current CMS policies.
    Allowing hospitals to receive payments for the time resident 
physicians train in a nonhospital setting is sound educational policy 
and a worthwhile public policy goal that Congress clearly mandated in 
1997. Additionally, it is good for rural communities.

                 DEVELOPMENT OF NEW TEACHING HOSPITALS

    In addition to expanding the training capacity at existing teaching 
hospitals, we desperately need to create new training programs at new 
hospitals. Currently, a majority of allopathic and osteopathic 
residency training programs exist in or near the major metropolitan 
cities on the east coast, west coast, and Great Lakes region. While the 
current programs continue to excel at producing high quality 
physicians, they do not adequately distribute physicians to communities 
across the Nation.
    As we outlined previously, it is well documented that physicians 
establish practices near the location of their training program. 
Assuming this to be true, the Nation desperately needs new training 
programs in many States, especially those in the Midwest, Southwest, 
Northwest, and Rocky Mountain regions. By providing greater number of 
residency training programs in these areas, the physician workforce 
shortage could be reduced greatly for many States.
    A major obstacle often preventing the establishment of new 
residency training programs are the costs associated with the creation 
of such programs. Under current law, a hospital starting a new 
residency program is not eligible for direct graduate medical education 
(DGME) or indirection medical education (IME) funding until they have 
filed their initial cost-report with the Centers for Medicare and 
Medicaid Services (CMS). Initial cost reports are filed following the 
completion of the first year the residency program is in operation. The 
first payments from CMS to hospitals with new residency programs 
typically occurs around 16 to 18 months after the program is started. 
This financing arrangement presents challenges for hospitals that 
operate on narrow margins, especially community hospitals that lack 
adequate reserve funds to offset the financial commitments associated 
with starting a new residency program.
    The AOA is working with Members of Congress to develop a new 
program that would assist community and rural hospitals in their 
efforts to establish new residency training programs. Under the 
``Physician Workforce and Graduate Medical Education Enhancement Act,'' 
the Secretary would be directed to establish an interest-free loan 
program whereby hospitals committed to starting new osteopathic or 
allopathic residency training programs could secure startup funding to 
offset the initial costs of starting such programs. Congress would be 
asked to allocate adequate money to establish and fund the program.
    To be eligible, a hospital must demonstrate that they currently do 
not operate a residency training program, have not operated a residency 
training program in the past, and that they have secured preliminary 
accreditation by the American Council on Graduate Medical Education 
(ACGME) and/or the American Osteopathic Association (AOA). 
Additionally, the petitioning hospital must commit to operating an 
allopathic or osteopathic residency program in one of five medical 
specialties or a combination of these specialties: family medicine, 
internal medicine, emergency medicine, obstetrics/gynecology, or 
general surgery.
    A hospital may request funding to assist in the development of a 
residency training program. We suggest that the financing be limited to 
no more than $1 million. Funding could be used to offset the costs of 
residency salaries and benefits, faculty salaries, and other costs 
directly attributable to the residency program.
    Hospitals securing a loan under the program would be obligated to 
repay the total sum, without interest, to the Secretary. Hospitals 
would have two repayment options--repayment in full or repayment 
through a financing mechanism. The AOA looks forward to working with 
Members of the U.S. Senate on this concept and is optimistic that this 
type of a program would enhance the disbursement of physicians to 
communities in need.

       EXPAND PROGRAMS THAT PROVIDE INCENTIVES FOR RURAL PRACTICE

    There are numerous existing programs that provide scholarships and 
loan repayment for physicians who choose to practice in rural 
communities. These programs include the National Health Service Corps, 
Public Health Service, Indian Health Service, and many programs 
operated by State governments. The AOA supports these programs and 
encourages Congress to continue funding them at levels that facilitate 
greater numbers of physicians practicing in rural and other underserved 
communities.
    Additionally, we believe that some consideration should be given to 
allow physicians to participate in the programs on a part-time basis. 
There are numerous communities that need physician services, but they 
may not need them full time. We believe that modifications should be 
made to Federal loan repayment and scholarship programs that allow 
participants to repay on a part-time basis in exchange for a longer 
term of service. For example, if a physician participates in the 
National Health Service Corps and agrees to a 3-year commitment in a 
rural community--why not allow the physician the option of committing 
to 4 or 5 year's service on a part-time basis. We believe this would 
encourage more physicians to participate in these valuable programs 
without jeopardizing the underlying mission.
    The AOA also proposes a change in the tax code that would provide 
physicians practicing in designated rural communities with a tax credit 
equal to the amount of interest paid on their student loans for any 
given year that they practice in such a community, or until their loans 
are paid in full. Under current law, individuals may deduct up to 
$2,500 in interest paid on student loans from their Federal income 
taxes. However, the income thresholds associated with this provision 
often prevent physicians from qualifying. Our proposal would provide a 
direct link between practice location and the tax credit. A physician 
practicing in rural Wyoming who pays $8,000 in interest on her student 
loans in year one would get an $8,000 tax credit for that year. The 
program would continue until the physicians had retired her student 
loan debt or when she departed the rural community. We believe that 
this proposal provides a direct incentive to young physicians and would 
assist in the recruitment and retention of physicians in rural 
communities.

                   IMPROVE THE ECONOMICS OF MEDICINE

    The current practice environment physicians face is challenging. 
Over the past decade escalating professional liability insurance 
premiums, decreasing reimbursements, and expanded regulations have made 
the practice of medicine more frustrating for all physicians. These 
issues are compounded in rural communities where physicians are often 
in solo practice or small group practices, unable to benefit from 
economies of scale that larger group practices in urban areas enjoy.
    According to a 2004 Health Affairs study, more than half of all 
practicing physicians are in practices of three or fewer physicians. 
Three-quarters are in practices of eight or fewer. They face the same 
economic barriers as every other small business in America. Costs 
associated with staff salaries; health and other benefits, basic 
medical supplies, and technology, all essential components of any 
business, continue to rise at a rate that far outpaces reimbursements. 
When facing deep reductions in reimbursements at the same time that 
their operational costs are increasing, it is safe to project that most 
businesses will not be able to continue operation. While most 
businesses increase, or have the ability to increase, their prices to 
make up the differential between costs and reimbursements, physicians 
participating in Medicare cannot.
     Physician Payment--Since 2001, Medicare physician payment 
rates have fallen greater than 20 percent below the Government's 
measure of inflation in medical practice costs. In 2002, physicians' 
payments under Medicare were cut 5.4 percent.
     If the projected cuts are implemented, the average 
physician payment rate will be less in 2007 than it was in 2001. 
Additionally, two provisions included in the Medicare Modernization Act 
(MMA), which provide increased reimbursements for physicians in rural 
communities, will expire over the next 2 years.
     In 2002, physician payments were cut by 5.4 percent. 
Congress acted to avert payment cuts in 2003, 2004, 2005, 2006, and 
2007 replacing projected cuts of approximately 5 percent per year with 
increases of 1.6 percent in 2003, 1.5 percent in 2004 and 2005, and 0 
percent in 2006 and 2007. Even with these increases, physician payments 
fell further behind medical practice costs. Practice costs from 2002 
through 2006 were about two times the amount of payment increases. The 
long-term projections are even more startling. Under the current 
formula, physicians face cuts of greater than 30 percent over the next 
8 years.
     Since its inception in 1965, a central tenet of the 
Medicare program is the physician-patient relationship. Medicare 
beneficiaries rely upon physicians for access to all other aspects of 
the Medicare program. This relationship has become compromised by 
dramatic reductions in reimbursements, increased regulatory burdens, 
and escalating practice costs. These projected cuts come at a time when 
the number of Medicare beneficiaries is projected to grow from the 
current 43 million to more than 71 million. Additionally, since many 
healthcare programs, such as TRICARE, Medicaid, and private insurers 
link their payments to Medicare rates, cuts in other systems will 
compound the impact of the projected Medicare cuts. Medicare cuts 
actually trigger cuts in other programs.
     Additional cuts in Medicare physician payments threaten 
Medicare beneficiaries' ability to access to physician services. These 
access problems are compounded in rural communities where the loss of a 
single physician can equate to no access for beneficiaries in that 
community. These problems will only increase if additional cuts are 
implemented.
     Furthermore, reduced payments hamper the ability of 
physicians to purchase and implement new technologies in their 
practices. According to a 2005 study published in Health Affairs, the 
average costs of implementing electronic health records was $44,000 per 
full-time equivalent provider, with ongoing costs of $8,500 per 
provider per year for maintenance of the system. This is not an 
insignificant investment. When facing deep reductions in 
reimbursements, it is safe to project that physicians will be 
prohibited financially from adopting and implementing new technologies.
     Physician payments should reflect increases in practice 
costs. Now is the time to establish a stable, predictable, and accurate 
physician payment formula that reflects the cost of providing care.
     Congress must act to reform the Medicare physician payment 
formula. Continued use of the flawed SGR formula will have a negative 
impact upon patient access to care. Additionally, Congress should act 
to extend expiring provisions that provide incentives to physicians in 
rural communities. The Medicare Modernization Act (MMA) altered the 
Medicare physician payment formula by establishing a 1.0 floor for the 
work geographic practice cost indices (GPCI) under the Medicare 
physician fee schedule and created a 5 percent add-on payment for 
physicians practicing in recognized Medicare physician scarcity areas. 
The MMA reversed years of inequities in payments between rural 
physicians and those in larger urban communities. Congress extended the 
1.0 floor for the work GPCI as part of the ``Tax Relief and Health Care 
Act of 2006'' (H.R. 6111). However, both the GPCI and Medicare scarcity 
provisions expire on December 31, 2007 unless Congress acts. We believe 
that these are essential and positive Medicare payment policies that 
should be extended, if not made permanent. Both provisions will enhance 
beneficiary access and improve the quality of care available.
     Medical Liability Reform--As you know, the Nation's 
medical liability system is broken. In recent years physicians across 
the Nation have faced escalating professional liability insurance 
premiums. According to the National Association of Insurance 
Commissioners (NAIC), between 1975 and 2002 medical liability premiums 
for physicians increased, on average, 750 percent. These premium 
increases are related directly to an explosion in medical liability 
lawsuits filed against physicians and hospitals and the rapid increase 
in awards. The Government Accountability Office (GAO) confirms this. In 
a 2003 report, the GAO stated that losses on medical liability claims 
are the primary driver of increases in medical liability insurance 
premiums.
     As a result of a broken medical liability system patients 
face reduced access to healthcare, the overall costs of healthcare 
increases, and the future supply of physicians is threatened. Many 
physicians no longer provide services that are deemed high-risk, such 
as delivering babies, covering emergency departments, or performing 
certain surgical procedures. This crisis also impacts primary care 
physicians, especially those in rural areas who are often the only 
physician practicing in a community. As a result, patients have seen a 
decrease in the availability of physician services. Additionally, the 
medical liability crisis has a significant impact upon the career 
choices of future physicians. In a recent poll conducted by the AOA, 82 
percent of osteopathic medical students stated that the cost and 
availability of medical liability insurance would influence their 
future specialty choices, while 86 percent stated that it would 
influence their decision on where to establish a practice once their 
training was complete. This trend in career choices is disturbing and 
will have a long-term impact upon the healthcare delivery system in the 
years ahead.

                                SUMMARY

    Again, the AOA appreciates the opportunity to share our views on 
this important issue. We remain committed to working with Congress to 
enact legislation that will ensure access to quality physician services 
for all Americans, regardless of where they reside. In closing we would 
like to highlight five recommendations made in our testimony that we 
believe will lead to improved access to physician services, increase 
the availability of U.S.-trained physicians, improve the quality of 
training for future physicians, and improve the recruitment and 
retention of physicians in rural communities.

    1. Congress should consider eliminating the cap on available and 
funded residency positions in the United States. This cap hinders the 
ability of osteopathic and allopathic medical schools to educate and 
train larger numbers of physicians. To meet the healthcare needs of our 
growing population we must have the capacity and financing to train a 
larger number of physicians. The AOA supports the ``Resident Physician 
Shortage Reduction Act of 2007'' and urges the Senate to approve this 
legislation in 2007.
    2. Congress should establish and fund a new interest-free loan 
program to assist in the creation of new residency training programs at 
hospitals that have not operated teaching programs previously. By 
expanding opportunities to new hospitals, Congress can facilitate the 
training of physicians in new geographic regions that currently have 
limited access to physicians.
    3. Congress should enact legislation that would establish, in 
statute, clear and concise guidance on the use of ambulatory 
nonhospital sites in graduate medical education programs. If enacted, 
it will preserve the quality education of resident physicians 
originally envisioned by Congress in 1997.
    4. Congress should amend the tax code to allow physicians 
practicing in rural communities an annual tax credit equal to the 
amount of interest paid on their student loans. We believe that this 
proposal provides a direct incentive to young physicians and would 
assist in the recruitment and retention of physicians in rural 
communities. Additionally, Congress should revise current scholarship 
and loan repayment programs to allow physicians to fulfill their 
commitment on a part-time basis.
    5. Congress should reform the Medicare physician payment formula by 
eliminating the sustainable growth rate and replacing it with a more 
equitable and predictable payment structure. Additionally, Congress 
should make permanent provisions that establish a floor of 1.0 for the 
work of GPCI and provide a 5 percent add-on for services provided by 
physicians in recognized Medicare scarcity areas. 




    Senator Murkowski. Thank you, Doctor.
    Next, let's go to Dr. Coombs, University of Washington 
School of Medicine. Tell us a little bit about WWAMI this 
morning.

STATEMENT OF JOHN COOMBS, ASSOCIATE VICE-PRESIDENT FOR MEDICAL 
AFFAIRS, ASSOCIATE DEAN FOR REGIONAL AFFAIRS, RURAL HEALTH AND 
GRADUATE MEDICAL EDUCATION, UNIVERSITY OF WASHINGTON, SEATTLE, 
                             WASHINGTON

    Dr. Coombs. Thank you, Senator Murkowski. And I want to 
also express my appreciation on the part of the HELP 
Committee--Health, Education, Labor, and Pensions--for inviting 
testimony today from the WWAMI program. I want to try to 
summarize some of my written comments that I have brought 
forward, in the interest of also having questions that you 
might bring forward, and to address beyond what we have said 
today.
    What is really remarkable to me is that when I began at the 
WWAMI Program at its inception, actually, 35 years ago, I was a 
practicing rural family physician in a very small community in 
north-central Washington, a National Health Service Corps 
volunteer, and someone who now has built upon that experience 
to continue to pledge our efforts, in terms of the University 
of Washington School of Medicine and WWAMI, into meeting future 
needs for physicians practicing in those areas.
    In your opening comments, you mentioned that the size of 
the rural population in the United States is roughly about 21 
percent of our total population. In the WWAMI area, that 
number, actually, is 35 percent, and in Alaska, it's greater 
than 50 percent of the population of the State of Alaska, who 
live in rural communities, and in Wyoming, Montana and Idaho, 
the number is even greater than 50 percent. So, this is a 
significant issue, in terms of the WWAMI Program.
    The thing I want to emphasize today, is the success of the 
WWAMI Program has been, really, predicated by partnership. The 
partnership that has existed between the Alaska State 
legislature, and the other legislatures across the five States 
among the institutions of higher education, such as the 
University of Alaska, Anchorage. Also, among practicing 
physicians, such as the Alaska State Medical Association and 
the volunteerism that goes forward to teach our students and 
residents. Also, among the hospitals within the State, who have 
put forward resource and energy to allow for the training of 
future physicians within those areas, as well as direct support 
for programs such as residency training. And also, among the 
partnership that exists between WWAMI and the Federal 
Government. And that really is the issue that I'd like to 
specifically center on today.
    Over the course of the past decade, the number of 
physicians entering family medicine from the WWAMI Program has 
gone from 36 percent of the graduating class, to this year, an 
anticipated 12 percent. Similarly, during that time, primary 
care has dropped from over 60 percent, to now just greater than 
38 percent. As a consequence, as you can see, the shortage that 
we're facing, we're not directing physicians in the way that we 
intend to, which is toward careers in primary healthcare.
    And why is this? Many of these issues have been mentioned 
today, but the mounting student debt, the shortage of really a 
critical unit in terms of being able to have adequate 
physicians within isolated communities, as well as large, urban 
communities. In addition to the absence of adequate applicants 
to residency programs who have done their training in the 
United States, which now, across the Nation, is less than 49 
percent of U.S. medical school graduates now fill our Family 
Practice Residency Programs, as an example.
    This is a significant issue. What can we do about this, in 
terms of the restoration of this in terms of the Federal 
partnership that we have within WWAMI? First of all, we need to 
restore and enlarge support for student debt relief. I think 
the National Health Service Corps--and particularly, I was 
pleased in your opening comments to hear you say, ``the 
relationship between academic training programs, and community 
health centers''--there needs to be a stronger community/
academic partnership which is developed that will allow for the 
training of family physicians, primary care internists, general 
pediatricians, general surgeons, and psychiatrists within 
settings such as that, to meet future needs, and access to care 
for people in isolated areas.
    The second thing is, that we need to fix the overall 
healthcare delivery system to create greater incentive for 
primary care physicians, and this has been mentioned by my 
colleagues who have testified before.
    At the present time, the financial incentive, or 
disincentive, to enter into primary care is very remarkable, in 
terms of the onus that this places upon medical students who 
are now facing, on our situation, $94,000 debt from people who 
graduate from the WWAMI Program who are from Alaska, in 
comparison to $125,000 that was mentioned earlier from public 
medical schools, and between $150,000 and $200,000 from private 
medical schools.
    We need to maintain and to incent training for primary 
care, and the essential specialties. And to do this, I want to 
make 8 points from the Federal perspective, that would help.
    First, is to eliminate caps for these primary care 
specialties in areas such as the critical things such as 
general surgery, and psychiatry. To enable hospitals and people 
who support graduate medical education, to build additional 
capacity in that respect.
    Second, not to allow for further reduction, and to restore 
reductions in Medicare and Medicaid that support graduate 
medical education, and medical education in general. This also 
includes the appropriated funds for pediatric training, and 
graduate medical education, which are currently scheduled for 
substantial reduction in this year's considerations.
    We need to increase the training for opportunities for 
residents in the critical needs specialties, and to build upon 
things--even in States like Alaska that do not, perhaps, have 
their own programs--we need to be innovative in terms of 
placing general surgeons, psychiatrists and internists, such as 
we have done in the State of Idaho, for instance, through the 
WWAMI Program, to bring them to Alaska as well, and to create 
innovative programs that will allow us to do that.
    We need to restore title VII funding. Currently that is 
pegged with the budgetary considerations to basically be 
eliminated this year. And this is something which supports our 
residency training, our medical student training, our faculty 
development, and a number of other areas which are essential, 
as far as the success that WWAMI has created over the course of 
the past 35 years.
    We need to restore the Health Careers Opportunities 
Program, HCOP, so that we can take people who come from 
underserved communities such as many of the areas in Alaska, to 
bring them to medical school, and to bring them into the health 
professions. Currently, in Dr. Johnston's program, there are 
two people who have participated in the HCOP Program within 
WWAMI who are now residents here. But, that program now has 
been eliminated. And so, what are we going to do to reach out 
to Alaska's communities, to bring people to healthcare careers 
in the future, and to just tell them, simply, ``You can do 
it.'' And we're here to help them make that happen.
    We need to expand funding for the National Health Service 
Corps Scholarship Program, which has been very effective. Dr. 
Johnston was also a National Health Service Corps volunteer, 
and someone who was brought into medicine through that 
mechanism. We need to restore funding for the Bureau of Health 
Professions, for the Center for Health Workforce Studies across 
the country, such that we can evaluate innovative programs and 
estimate the needs. That has now been eliminated over the 
course of the past 2 years, through the Bureau of Healthcare 
Professions.
    And, finally, I want to come back to creating this academic 
community health center alliance, where we can begin to have 
training programs within these CHCs, to be able to bring 
trainees to them, and to actually create the success that I 
think can be done in that respect.
    This is a long list of things, in terms of the Federal 
support. But, it is something that I want to return to the fact 
that, partnership has been the thing that has led to the 
success of WWAMI.
    I've provided in my written testimony, information which is 
available to you, and other members of the HELP Committee, 
including our continuum of medical education, which really 
brings out all of the programs which rely upon Federal support 
in terms of their continuance. Much of which, now, has been 
eliminated.
    Finally, now, I just want to briefly touch upon the success 
that WWAMI has created. The Program has been successful, not 
only because of this partnership, but it's bringing incredibly 
capable students from States such as Alaska into the 
opportunity to achieve publicly-supported medical education. 
We're joined today, if they could stand, by the students who 
are currently in the pipeline of WWAMI from Alaska, who are 
going to be the future of healthcare delivery in Alaska.
    [Applause.]
    For every student who just stood, there are six other 
qualified students who could be here today, if there was just 
the resources to be able to bring them into the pipeline. And 
also, to be able to enlarge upon the graduate medical education 
programs that exist within the State.
    The student return rate for WWAMI is 61 percent who return 
to WWAMI to practice medicine. This is a remarkable thing, 
especially when you look at the State of Alaska, where 47 
percent of those who start in the State of Alaska return, but 
84 percent of the positions, the 10 positions per year, are 
filled by students who have graduated from WWAMI, who return to 
the State to practice.
    The second thing is that WWAMI is very cost-effective. Our 
tuition, the $15,900 per year, is $4,000 below the National 
average for public medical schools. And so, not only is that 
something that is cost-effective, but also, the total cost of 
educating students of--what seems like an enormous amount of 
money--of $57,000, is far below the average of $60,000 to 
$120,000 nationally, to educate medical students.
    We've been fortunate to be named the number one primary 
care medical school in the United States by U.S. News & World 
Report, for the last 13 years. No. 1 in family medicine, number 
one in rural health. But, I think the critical issue is, we 
need to have the support of all of the partners to be able to 
continue to do this.
    We've been fortunate that through the program, such as Dr. 
Johnston's Family Practice Residency Program, 77 percent of the 
350 residents who are part of that Program, have returned to 
practice in WWAMI. And, among those, 30 percent in communities 
of less than 25,000, 15 percent in communities of less than 
5,000. So, we need to continue to be able to innovate.
    So, I'd like to just conclude by saying, again, thank you 
very much to the HELP Committee for allowing me to come and 
testify, and share with you some of the success of WWAMI, but 
also, to encourage us to return to the partnership that has 
made us successful, and has benefited the people of, not only 
the State of Alaska, but across the WWAMI region, and the 
Nation, in terms of the preparation of future family 
physicians, and physicians in other specialties.
    Thank you.
    [The prepared statement of Dr. Coombs follows:]

               Prepared Statement of John B. Coombs, M.D.

    My name is John Coombs and I am a physician on the faculty at the 
University of Washington School of Medicine. As a family physician and 
pediatrician and as a member of the Dean's office, my responsibilities 
include the oversight of the WWAMI Program.
    Today it is my privilege to testify before you from my leadership 
position in the WWAMI Program. As I will outline below, WWAMI 
(Washington, Wyoming, Alaska, Montana, Idaho) has accomplished much in 
its nearly 35 years of serving the region. From a Federal perspective, 
I can say that we have only been able to accomplish this record with 
continuing Federal support. We have partnered with the Federal 
Government all along the way and I want to begin by thanking this 
committee and the programs it funds for the support you have given to 
WWAMI over the years.
    At the end of my testimony, I will suggest specific ways that we 
together can reinvigorate our partnership. Recent years have seen a 
decline in Federal support for what we do. While we appreciate the 
realities of the Federal budget, I hope to convince you that your 
investments in support of medical education are key to managing the 
physician crisis in rural America, the subject of this hearing.
    WWAMI stands for Washington, Wyoming, Alaska, Montana and Idaho. 
The University of Washington School of Medicine is the only medical 
school and academic medical center within this five-State area. The 
region comprises approximately 27 percent of the total land mass of the 
United States. The approximately 10 million people in the region 
constitute 3 percent of the population in the United States. Thirty-
five percent of the people living within this five-State region live in 
rural communities. This year we are celebrating the 35th anniversary of 
WWAMI, and are acknowledging the remarkable interstate partnership that 
has been developed to allow for public access to medical school for the 
citizens of the five States. This has only been possible through the 
cooperative relationship between the people of the five States and the 
medical school. This is a relationship which has evolved between 
institutions of higher education, physicians in practice, hospitals, 
and the State legislatures as we work together to support, in an 
enduring fashion, this remarkable partnership.
    In each of the past 14 years, the University of Washington School 
of Medicine and the WWAMI Program have been recognized by U.S. News & 
World Report as the No. 1 Medical School in the United States in 
primary care as well as in rural health and Family Medicine. Though the 
program began with a focus solely on training medical students, our 
evolution has been toward the development of a continuum of educational 
services (represented in the attachments as the ``WWAMI Educational 
Continuum'') that begins before medical school and extends into 
community service. It has also evolved into the creation of graduate 
medical education programs that have allowed for graduates of WWAMI to 
continue on with their training within the five-State area in family 
medicine, pediatrics, internal Medicine and psychiatry. In 2002, the 
Association of American Medical Colleges recognized WWAMI with its 
prestigious Outstanding Community Service Award, applauding the 
partnership between the UWSOM and communities within WWAMI.
    The material that I have provided to you as part of this testimony 
is the current Executive Summary of Activities in the States of Alaska 
and Wyoming over the past 12 months. The insert to both of these 
reports provides a State map, which allows for visual representation of 
communities where the WWAMI program is based within the States. In 
addition, on the back of the map page is a pictorial representation of 
the WWAMI Educational Continuum. This material will give the reader an 
in-depth glimpse of exactly what WWAMI does within the States of Alaska 
and Wyoming.
    Overall, the outcomes of the program are substantial. Sixty-one 
percent of our medical students have returned to practice within the 
five-State WWAMI area. This compares favorably to the national average 
return rate (for all medical schools) return rate of 41 percent. In 
addition, over the course of the past 20 years, approximately 40 
percent-55 percent of graduates have entered into residencies in 
primary care (national average, 7 percent-10 percent). Over a similar 
timeframe, 15 percent-30 percent of WWAMI graduates have chosen to 
establish practices in rural and medically underserved areas. Hence, 
WWAMI ranks highly among the States with regards to return of graduates 
to practice within the communities where they trained. Similarly, WWAMI 
ranks highly in providing well-trained physicians ready for primary 
care careers in rural and medically underserved communities. The Family 
Practice Residency Network, which is affiliated with the University of 
Washington and brings together 17 Family Practice Programs across the 
five States (one of which is here in Anchorage), has a return rate of 
77 percent of graduates to practice within the five-State area. Of 
these graduates, 30 percent practice in communities of less than 25,000 
and 15 percent in communities of less than 5,000 people--most often in 
communities that are medically underserved and/or rural. Additional 
information is provided on the State-specific Fact Sheets that are 
attached to this testimony in conjunction with the Executive Summary 
Reports.
    The WWAMI Program is remarkably cost-effective. The total cost to 
States averages between $45,000-$55,000 per student, per year for 
medical student education within WWAMI. This compares favorably to 
national averages of $60,000 and $120,000 per student, per year in 
medical schools in States outside of the WWAMI region. In addition, the 
tuition that is paid by students at the University of Washington School 
of Medicine is $15,900 per year, approximately $4,000 less than the 
national average among publicly supported medical schools. This cost 
effectiveness is consistent with one of the original 1970 goals of the 
WWAMI Program which was to assist WWAMI States in avoiding duplicative 
capital costs and the expenses of hiring new faculty. The WWAMI Program 
would not have been able to accomplish this without cooperation of 
universities such as the University of Alaska-Anchorage and the 
University of Wyoming in Laramie. It truly has been an enduring and 
effective partnership.
    The above summarizes the accomplishments of WWAMI. Now let me focus 
on some of the challenges we face in preparing the future rural health 
workforce.
    Over the course of the past 5 years, WWAMI has seen a drop in 
student interest in selecting residencies in primary care. We have gone 
in 1996 from approximately 36 percent of students entering into family 
practice to approximately 12 percent estimated this year. This 
remarkable decline has resulted from a variety of factors including 
rising student debt, student interest in assuring that there will be 
adequate time for personal as well as professional pursuits and changes 
in the healthcare delivery system. As we look to the future, the effect 
of this decline in student interest in primary care will be devastating 
for rural and medically underserved communities.
    Looking deeper into the underlying reasons as to why this drop has 
occurred, we cite the following issues:

     Reduced student interest in primary care.--Long hours, 
limited pay, and reduced personal time have discouraged students from 
pursuing careers in primary care. There is frustration among many 
students that the current healthcare delivery system does not allow the 
students, once they become doctors, to pursue the principals of primary 
care, which include continuous patient-centered, comprehensive, 
compassionate, and coordinated care. The prevailing practice of primary 
care at the present time also discourages students away from primary 
care because of the limited time and infrastructure upon which to 
implement exceptional management of chronic diseases. This is of 
particular concern with an aging population and the increased incidence 
of chronic disease among the elderly population. Contributing to this 
reduction in student interest is also the increasing requirement for 
more positions in the current healthcare delivery system in the United 
States. The Association of American Medical Colleges now recommends 
that there be a 30 percent increase across the country in the number of 
medical students we train. With this increased demand, students now 
have many other options in healthcare that allow them to direct their 
interests away from primary care.
     Increasing Student Debt.--Over the past decade there has 
been a remarkable increase in student debt upon graduation from medical 
school. The national average is currently $125,000 per student from 
public schools, and $150,000+ from private schools. Students in WWAMI 
from Alaska currently graduate with $94,000 debt per student, with 100 
percent of graduating students incurring debt. Over the past 6 years, 
this is up from $50,000 per student with approximately 75 percent of 
students graduating with debt.
     Loss of Federal funding at the University of Washington 
School of Medicine/WWAMI.--The following factors have contributed to 
undermining of support for our programs that are aimed at enhancing 
student interest in careers in primary care.

          Loss of title VII funding. This loss has led to cuts 
        in residency training in programs in Alaska and Wyoming, 
        reduced support of Family Medicine Student Training Programs, 
        the loss of residency faculty development fellowships, and 
        reduced support for the underserved pathway within WWAMI.
          Loss of the Health Careers Opportunity Program (HCOP) 
        Grant funding ($1.2 million over 2 years) at the University of 
        Washington. This has led to a severe reduction in our summer 
        UDOC Program which is designed to encourage students from 
        medically underserved areas to follow their interests in health 
        careers.
          Loss of Center of Excellence for Native American and 
        Native Alaskan funding. Over the past 2 years, $647,000 has 
        been cut from this program. At the present time, three WWAMI 
        graduates from this program are residents at the Anchorage 
        Family Practice Residency Program, an affiliate of the 
        University of Washington Family Practice Network. A similar 
        loss in Center of Excellence funding in Montana occurred in 
        Pharmacy.
          Loss of funding for the WWAMI Center for Health 
        Workforce studies and the Rural Health Research Center. These 
        programs fund the creation of vital sources of information 
        (across WWAMI and the Nation) concerning the programmatic 
        effectiveness in rural programs. In addition, they inform us 
        concerning workforce needs in rural areas. Funding here has 
        been reduced in the last 2 years from approximately $2 million 
        per year to $0.6 million per year. This has resulted in our 
        staff declining from 21 researchers to six within our 
        Department of Family Medicine.
          Reduction of support for National Health Service Core 
        Scholarships.

     The creation of caps on Graduate Medical Education (GME) 
funding as a result of the Balanced Budget Act of 1996.--This has 
imposed a freeze on GME positions within the WWAMI area. Across the 
five States, the number of GME positions per 100,000 population is far 
below the Nation's average per State of 34 positions per 100,000 
population. In WWAMI, this number is closer to 15 positions per 
100,000. Currently the State of Alaska has only 4 residency positions 
per 100,000.
     Perpetuations of GME losses currently proposed in the 
President's fiscal year 2008 budget.

          Medicare IME (Indirect Medical Education) payment 
        reduction, a proposed cut from the GME payments that are 
        attached to the Medicare Advantage Plan payments. There is also 
        a potential proposed cut (as recommended by MedPac) of an 18 
        percent reduction in the IME portion going from 5.5 percent to 
        4.5 percent.
          Proposed Medicaid cuts, including the elimination of 
        GME payments currently provided within Medicaid payments to 
        hospitals. If this is allowed to occur, the anticipated impact 
        will be a loss across the country of $1.76 billion over the 
        next 5 years.
          Nearly complete elimination of title VII--The 
        President has proposed that title VII funding be reduced from 
        $185 million in fiscal year 2007 to $10 million in fiscal year 
        2008. This is a perpetuation of significant reductions in title 
        VII over the past 6 years.
          Reduced support for payoff of student debt by 
        reduction of funding for the National Health Service Core from 
        $125 million in fiscal year 2007 to $116 million in fiscal year 
        2008.
          Children's Graduate Medical Education appropriation 
        reduction from $297 million to $110 million (a 63 percent 
        reduction).

    All of these reductions (and proposed reductions) have 
significantly influenced the ability of WWAMI and other similar 
programs across the country to continue to support the preparation and 
training of physicians to practice in rural and medically underserved 
areas and to achieve our remarkable outcome record. To successfully 
turn this around, interventions will be required in which we enhance 
student interest in primary care and support the continuation and 
expansion of programs like WWAMI.
    I would strongly recommend that this committee consider support of 
the following Federal initiatives as a way to restore efforts on the 
part of programs such as WWAMI. This will assist us in continuing to 
provide effective medical education programs that are consistent with 
the workforce needs within the five States, and across the Nation.
    Specifically, I would recommend the following measures be 
considered and taken:

     Address the reduction in student interest and create 
financial incentives to entering primary care residencies and practice. 
To successfully do this over time, the reimbursement for primary care 
physicians and physician practices will need to be enhanced far above 
where it is today. This reimbursement and support for primary care 
practices (such as the institution of measures to create medical homes 
for all patients, electronic medical records, and the establishment of 
evidence-based approaches to disease management among others) will need 
to occur. Specifically,

          Encourage the increased number of medical students in 
        training by increasing the Nation's medical school capacity 
        consistent with the AAMC's recommendation of a 30 percent 
        increase. Within the WWAMI States, we are currently 
        anticipating an increase of 22 percent in seats for medical 
        students over the course of the next 2 years. This includes 10 
        additional seats from the State of Alaska, 6 seats from the 
        State of Wyoming, and 20 seats within the State of Washington. 
        In addition, discussions of increases in seats for medical 
        students are currently underway in Montana, and to a lesser 
        degree in Idaho.
          Encourage students to enter primary care residencies 
        through tuition support programs like the National Health 
        Service Core to offset the increasing amount of student debt, 
        and to reduce financial disincentives to entering into primary 
        care.
          Restore Federal support for educational programs for 
        physicians in training, giving particular attention to those 
        programs that address the shortage of doctors in rural and 
        medically underserved areas. This can be best done by 
        restoration of title VII, HCOP and Center of Excellence 
        Funding. We should also direct assistance to medical schools 
        and residency training programs that promote (and are held 
        accountable for) physicians entering practices in primary care 
        and other needed specialties (such as general surgery and 
        psychiatry) particularly in medically underserved areas.
          Eliminate caps within the Medicare Program for 
        primary care residency positions and rural track programs in 
        specialties needed in rural America. Besides family medicine, 
        general internal medicine and general pediatrics, this should 
        also include innovative programs in rural track training in 
        general surgery and in psychiatry. Many of these programs may 
        be urban-based in addition to having rural locations in the 
        program.
          Expand training opportunities in rural and medically 
        underserved communities. This should include the support for 
        graduate medical education programs which combine urban and 
        rural training (such as in rural track training). Enhance the 
        supply of future accountable rural practitioners and increase 
        access to rural and medically underserved citizens to top 
        quality healthcare. Current examples of this in WWAMI include:

                  1. The continuation of rural track training with the 
                WWAMI Family Medicine Network.
                  2. The development (currently being considered) for 
                rural track training in general surgery.
                  3. Support for rural-track psychiatry programs such 
                as our programs based in eastern Washington, Idaho and 
                Wyoming. This last example is of particular importance 
                given the burgeoning problems in mental health, 
                including meeting the needs of veterans who have 
                returned from National Guard duty to rural communities 
                over the past 10 years.

     Continued support for Area Health Education Center (AHEC) 
funding and programs that promote recruitment of high school students 
into health careers.--Programs such as the AHEC currently in place 
within WWAMI provide infrastructure and allow physicians in training to 
do community-based rotations in rural and medically underserved areas. 
This support needs to continue.
     Encourage programs that promote educational relationships 
between Community Health Centers (CHCs) and academic medical centers.--
Within WWAMI we are currently exploring community academic linkages 
that would allow for increased educational opportunities within CHCs 
that serve rural and medically underserved populations. CHCs are 
rapidly becoming the greatest provider of primary care in rural and 
underserved urban communities, yet the supply of physicians to meet 
this need is far below demand. This would allow for greater 
opportunities to train students and residents within CHCs, and would 
help to alleviate the workforce shortages that challenge the CHCs.
     Restore funding for the Office of Rural Health Policy, 
Rural Health Research Centers and the Bureau of Health Profession 
Centers for Health Workforce Study across the country.--The absence of 
funding for these programs has severely limited our ability to evaluate 
and assess efforts that are currently in place to craft innovations 
that address many of the needs that I have addressed today. In 
addition, funding for the Nation's Centers for Health Workforce Studies 
(CHWS) (which has been completely eliminated within the Bureau of 
Health Professions) needs to be restored such that regions can have at 
hand the ability to assess current workforce needs.

    In conclusion, it has been my privilege to present this information 
to you today and to provide, in a short period of time, advice to 
policymakers and leaders as to how we might best face the future 
challenges of providing for physician needs within rural and medically 
underserved communities. The University of Washington School of 
Medicine and WWAMI have long appreciated the support provided by the 10 
U.S. Senators serving our five-State region, along with your colleagues 
from the House of Representatives. WWAMI stands ready to build upon 
this remarkable partnership. We will need your continued help and 
support in order to accomplish this task.
    I look forward to answering questions that you might have around 
specific issues. I pledge to you to continue to provide support to this 
committee and your staff as we move ahead in the Federal agenda to 
support educational solutions to future workforce needs within the 
United States.
    Thank you for your attention.

    Senator Murkowski. Thank you, Doctor, and I appreciate you 
making the introduction of the young men and women who are 
involved in the program now. It's a delight to have you here. I 
hope you're hearing the message that we need you.
    And with that, let's go to Karen Perdue, the Associate 
Vice-President for Health at the University of Alaska, who has 
been coordinating the Task Force Report. And, I would like to 
note that a full copy of the Task Force Report will be included 
as part of the committee record.

    So, with that, Ms. Perdue.

STATEMENT OF KAREN PERDUE, ASSOCIATE VICE PRESIDENT FOR HEALTH, 
            UNIVERSITY OF ALASKA, ANCHORAGE, ALASKA

    Ms. Perdue. Thank you, Senator Murkowski. Again, I echo the 
appreciation that you have, the attention that you've given to 
this issue. Not only today, but in the last couple of years.
    What I want to say, and I want to be brief, myself, because 
I do know that we need to have a dialogue, but Alaska has 
always had a physician shortage. I think those of us who have 
grown up here know that this is not a new phenomenon that we 
are facing.
    So, the question that we were interested in, at the 
University of Alaska, in partnership with the State Health 
Department was, what's changed? Why is this--why are patients--
anecdotally, we heard so much more access problems--has there 
been a change in the reimbursement climate? Are expectations of 
consumers higher? Do we have fewer physicians overall? The 
solutions for all of these things are quite expensive. The 
public investments that are needed for correcting the problems 
are expensive. So, I think it's been important to take the time 
to study the issue, and to give policymakers such as yourself, 
verifiable information that you can rely on. And, I do believe 
this Report does do that.
    The Report--the Task Force was appointed by the President 
of the University, and the Commissioner of the State, of our 
State Health Department. Half of the people on it were 
physicians, and half were not. And I think that was important, 
because we all came with our own questions, and our own sets of 
information.
    We spent half of our time looking at the numbers, because--
believe it or not--it's not that easy to determine how many 
physicians we actually have in our State, given the fact that 
we have many physicians who are retired, or who aren't actively 
practicing, this question of the military has been brought up--
you know, so how many people are actually caring for patients?
    I think the conclusion of the Task Force was--by the way 
that number was about 1,343 physicians was what we determined 
were practicing. I think the determination of the Task Force 
was that we do have a shortage. Frankly, the shortage wasn't as 
great as many of us expected, numerically, when we walked in 
the door. But, we are going to have a growing shortage, and 
that, I think, was the revelation of the Task Force that was 
probably most compelling. If we do nothing, if we do not act in 
a very aggressive way, we will have a growing crisis.
    It is expensive to do nothing. We have learned from reports 
that we saw that--and we've heard earlier, over $24 million in 
costs are borne by our healthcare system, just the ones we're 
able to document--in recruiting temporary workers, and in the 
cost of recruitment and vacancy. One hundred and twenty five 
thousand dollars is spent to replace a physician in our State. 
Those are costs, those are funds that could be going into the 
remedies for the shortage, if we could just get ahead of the 
game.
    So, the Physician Supply Task Force, of course, concluded 
that we needed immediate action, but probably--to reach an 
adequate supply by 2025, which was the planning horizon we 
used--that we would have to add a net of 59 physicians a year. 
Now, that doesn't seem like much when you look at the number, 
but it has to be every year. Each year, until 2025. This is a 
50 percent increase in what we are gaining now.
    So, what do we need to do? We need a sustained and 
strategic set of actions, and there's no one thing that will 
solve this problem, and that is, of course, a very complicated 
thing in public policy, because I think it's a tendency to look 
at a problem, address it in one way, and then say, ``OK, I've 
got to go on to another issue.'' And, I say to our legislature, 
State legislature and our policymakers--this is not a short-
term assignment that we're taking on. It's a very big job.
    So, we recommended policies in four areas, and we've 
mentioned most of them here, so I won't go over them in detail, 
but I will go over them, in general.
    We have to increase the in-state production of our Alaskans 
who go to medical school. We've heard about the WWAMI Program, 
we looked at those numbers, we concur that that program is 
extremely effective, and we're very lucky to have it. We need 
more slots. We said that we actually wanted 30 slots, 20 slots 
is--going from 10 to 20 slots is what's in front of the 
Legislature today, but I think, in the long run, we would like 
to go beyond that, in the Task Force Report we mention that. I 
think there's a need to keep our eye on that ball, because the 
University of Washington faces this pressure from every State. 
So, we need to act with due diligence on that.
    And, of course, the residency program, we looked at that, 
those numbers, they were very effective, and we need more 
residency training.
    Dr. Johnston gave us quite a lot of sobering information 
about how hard it is to create a residency program, how many 
sick people you need, and how much quality assurance you must 
have. So, it's not going to be an easy task, and it's not going 
to be cheap. But, it is definitely a highly effective way, 
later on in medical training, to get doctors in our State.
    And finally, we looked at the issue of other medical 
schools, because we do have Alaskans who go to other medical 
schools. And Dr. David Head, who was on our Task Force, was 
particularly interested in this question, because he went to 
school at the University of Arizona. We used to have, through 
WHICHE, an arrangement where Alaskan students could participate 
in a subsidized way. And we believe that that should, that kind 
of an arrangement should come back to our State, but we also 
believe it should have a service obligation. And the poor 
record of return, in the old days, I think was related--in our 
view--to the fact that we didn't have such a service 
obligation.
    Of course, all of that's a long timeline, so 
simultaneously, we must be beefing up the recruitment of 
physicians in our State. And, we believe that there should be a 
centralized place in State government where recruitment of 
physicians is something that people do when they get up every 
morning. In other words, they're not actually recruiting the 
physicians, but they're assisting the practices, the 
communities, the hospitals, and perhaps the legislative bodies 
in making this more effective.
    Legislation, such as the ones that you sponsored--the loan 
repayment or the tax incentives--these are also effective for 
that recruitment phase, once the student has finished their 
medical school, and we found that was very important.
    Also, we have a very strong commitment to mid-levels in our 
State--nurse practitioners, and physicians assistants, the 
University of Alaska trains them, we feel that that's important 
to maintain and to enhance.
    And, finally, the area I want to touch on, the third area, 
was the medical pipeline that you've mentioned. The University 
of Alaska is very serious in assisting in the math and the 
science and the interest of young people in getting into 
medical careers, and particularly, to become physicians.
    We have--the University of Alaska, over the last 5 years, 
has beefed up their medical education and pipeline programs. 
And through title VII, we gained many different competitive 
grants, to work on this area. We lost $1.4 million in effort 
last year, when Congress defunded that title VII, those title 
VII programs.
    These are programs out in communities helping our students, 
and also working on rotations, and clinical placements for 
students in rural settings.
    We are really anxious to work with your office and your 
legislation to strengthen title VII funding, I think that will 
have a long-term effect. Alaska does now have its own AHEC, and 
the partners in that Area Health Education Center include the 
Yukon/Kuskokwim Health Corporation, the Family Practice 
Residency, and the Fairbanks Memorial Hospital. These are 
organizations that will be going out every day and working on 
these problems.
    So, Senator Murkowski, thank you very much for hearing 
about the Physician Task Force Report. We do believe that this 
can be turned around. We do believe--we're Alaskans, so we have 
to believe that we can solve these problems, that it's not 
hopeless. But, we will have to keep our eye on the ball, and we 
will have to do many things at one time.
    [The prepared statement of Ms. Perdue follows:]

                   Prepared Statement of Karen Perdue

    Thank you for inviting me to participate in this field hearing on 
the important topic of the physician shortage and its impact on access 
to medical care in Alaska. In my current position at the University of 
Alaska, I work on a daily basis to ``grow our own'' healthcare 
professionals. These professionals are needed to fill the thousands of 
healthcare positions vital to the health of our Alaskan communities.
    Recently, I also had the pleasure to be appointed by Secretary 
Leavitt as a member of the National Advisory Committee on Rural Health 
and Human Services and in that capacity I look forward to working on a 
national solution to the growing crisis of the shortage of health 
professionals, including physicians, in rural America.
    The University of Alaska is playing a critical role in meeting the 
workforce needs of one of Alaska's most important industries. My 
comments are organized into the following areas:

    (1) Documenting Alaska's Health Workforce Needs
    (2) Alaska's Physician Supply Task Force
    (3) Expanding and Strengthening Health Workforce Programs
    (4) Recommendations

              DOCUMENTING ALASKA'S HEALTH WORKFORCE NEEDS

    The development and maintenance of the health workforce requires 
resources--resources to understand needs, develop strategies, and 
implement programs.
    Federal funding to understand the health workforce, to track 
fluctuations and gaps over time, has been limited, but we have 
accomplished some important efforts.
    Over the past 5 years, the University of Alaska has successfully 
partnered with the Alaska Department of Health and Social Services to 
support some health workforce assessments. The resultant data clearly 
point to huge gaps in Alaska's health workforce. Demand exceeds supply 
in almost every health profession.
    Through 2010, the U.S. Department of Labor predicts that the top 30 
fastest growing jobs in the Nation will be in the field of allied 
health. This finding is mirrored in Alaska, where 30 percent of the 
jobs created in the past 5 years are in healthcare. Further, the 
healthcare jobs in Alaska make up 8.3 percent of the wage and salary 
employment, and that may continue to grow as the population ages 
relative to the Lower 48 and Alaska develops more comprehensive 
services.
    The Status of Recruitment Resources and Strategies (SORRAS) study 
commissioned by the State of Alaska's Department of Health and Social 
Services and conducted by the Alaska Center for Rural Health at UAA 
(Alaska's AHEC), documented recruitment expenditures for 13 health 
occupations, including oral, behavioral and physical health.\1\ 
Specific occupations included: physicians, pharmacists, physician 
assistants, nurse practitioners, nurses, dentists, hygienists, 
psychiatrists, clinical psychologists, masters-level therapists, and 
licensed clinical social workers.
---------------------------------------------------------------------------
    \1\ http://nursing.uaa.alaska.edu/acrh/projects/report_sorras-05-
06.pdf.
---------------------------------------------------------------------------
    The 2006 study documented a staggering $24 million spent by 
Alaska's hospitals, community health centers, and tribal health 
facilities in recruiting providers for their most recent fiscal year. 
Of that sum, $12.9 million or 54 percent is attributed to itinerant 
providers.
    This $24 million is lost to direct patient care, driving up the 
cost of doing business, compromising continuity of care and forcing 
organizations to make decisions on the allocation of precious 
resources. Equally important, the salaries to itinerant providers 
represent an economic loss to the communities, as itinerant providers 
do not buy homes or otherwise invest in the local economy.
    Focusing on those occupations in the study that are supported by 
the National Health Service Corps, we know that respondent 
organizations spent an average of:

     $126,782 for the recruitment of each physician (MD or DO);
     $25,655 for the recruitment of each physician assistant 
and nurse practitioner; and
     $35,542 for the recruitment of each dentist.

    The University of Alaska is now commissioning the Alaska Center for 
Rural Health to conduct a statewide Health Occupations Vacancy Study, 
looking at vacancies for over 100 occupations in Alaska's hospitals, 
nursing homes, tribal health organizations, behavioral health 
facilities, public health nursing, school districts, medical clinics, 
dental clinics, pharmacies, rehabilitation (PT, OT, Speech) clinics, 
diagnostic imaging clinics and medical laboratories. The resultant data 
will inform our program planning efforts.

                      PHYSICIAN SUPPLY TASK FORCE

    Alaska has historically experienced a shortage of physicians, but 
stories from patients, providers and health policy experts seemed to 
point to a worsening problem.
    That is why in January 2006, University of Alaska President Mark 
Hamilton, along with Commissioner Karleen Jackson empanelled a group of 
experts to take the first ever comprehensive look at Alaska's physician 
supply. The report of the panel, issued in August 2006 paints a 
challenging picture of the job in front of us: to address a current and 
looming physician shortage in our State. If we do not act quickly, we 
will face an evergrowing crisis.
    The Alaska Physician Supply Task Force called for immediate action 
to increase the supply of physicians in Alaska. In order to reach an 
adequate supply of physicians by 2025, Alaska needs to add a net of 59 
physicians per year, every year, starting immediately. This is a 50 
percent increase in new physicians.
    While these numbers may seem small at first blush, they are 
daunting considering the following:

     It takes between 7-10 years to train a physician.
     Only 10 Alaskans a year are currently admitted to the 
Alaska/University of Washington Medical School Partnership known as 
WWAMI. The seats have not been expanded since the program's inception 
in 1971.
     Alaska has only one Residency program--a common tool for 
recruiting new physicians.
     Competition for physicians across all disciplines will 
increase as shortages occur across the Nation.

    Sustained and strategic action is needed to meet the growing 
shortage of physicians. No one strategy will meet the need. The Task 
Force recommended improvements in four areas (selected strategies 
listed):

    (1) Increase the in-state production of physicians by increasing 
medical school slots and graduate medical education opportunities in 
Alaska.

          Increase State-subsidized medical school positions 
        through WWAMI.
          Support and enhance residency training in Alaska.
          Support, with service obligation, Alaskans attending 
        other medical schools.

    (2) Increase recruitment of physicians.

          Create a statewide entity with resources to help 
        communities with recruitment.
          Provide recruitment incentives like loan repayment 
        and tax incentives to physicians who practice in rural 
        communities.

    (3) Expand and support programs that prepare students for medical 
careers.

          Support college prep programs in math and science, 
        internships, scholarships.
          Support Alaska's AHEC, which is a system devoted to 
        attracting and retaining Alaskans into health careers.

    (4) Increase the retention of physicians by improving the practice 
environment.

          Practice environment index.
       expanding and strengthening health workforce programs \2\
    The University of Alaska recognizes the growing demand for health 
careers academic programs and continues to innovate to make programs 
available throughout Alaska, and in communities where people reside.
---------------------------------------------------------------------------
    \2\ University of Alaska Health Programs: Pathways to Alaska Health 
Careers.
---------------------------------------------------------------------------
    Growing Enrollments: In the last 5 years, enrollment in health 
programs at the University of Alaska increased by 66 percent and the 
number of our graduates has grown by 55 percent.
    Expansion of Distance Education: Training Alaskans in their 
communities for Alaska's thousands of good healthcare jobs is the only 
long-term solution to shortage. However, until recently, Alaska's vast 
geography has been a barrier to the creation of learning cohorts. That 
changed in 2004 with the formation of the Health Distance Education 
Partnership.
    In its first 3 years of operation, the Health Distance Education 
Partnership has created over 50 distance-delivered courses covering 
eight occupational areas, serving over 1,000 students. Distance is not 
a barrier to learning. It is the future of its delivery.
    National exams show that students taught by distance in nursing 
perform equal or out perform their own campus peers.
    Doubled Nursing Supply: In 2002, the University/Industry Task Force 
established the goal of doubling the number of basic nursing graduates 
(AAS and BS programs) from the UAA School of Nursing by 2006. This goal 
has been met and exceeded, growing from an annual graduation of 96 to 
215 students. Industry partners have given more than $4 million so far 
to support the expansion. Further, those industry partners also provide 
clinical rotation space in their hospitals. Nursing education is 
available in 11 Alaskan communities, enabling students to learn in the 
communities where they live.
    Alaska WWAMI Program Expansion: Alaska WWAMI students are able to 
spend 3 of their 4 years of medical school in Alaska. This corresponds 
with the validated research that people practice where they are 
trained. The University of Alaska strongly supports the expansion of 
the Alaska WWAMI program, expansion from 10 to 20 first-year students 
in the coming year. The Legislature is currently considering this 
expansion.
    Strengthening Mid-level Academic Programs: Alaska has and should 
maintain a higher ratio of mid-level providers (advanced nurse 
practioners and physicians assistants) to physicians than the national 
average. The University of Alaska offers Nurse Practitioner education 
through the School of Nursing and a Physicians Assistant Completion 
Program in collaboration with the University of Washington's MEDEX 
Northwest Physician Assistant Program. These programs should be 
strengthened and supported.
    Alaska Area Health Education Center (AHEC) Program: Because Alaska 
does not have a stand alone medical school, in September 2005, Alaska's 
School of Nursing became the first in the Nation to have an Area Health 
Education Center (AHEC). All other AHEC programs in the country are 
housed in Schools of Medicine. Funded by the DHHS Health Resources and 
Services Administration,\3\ the program is responsible for 
strengthening the health workforce via collaborations with regional 
partners, called AHEC Centers.
---------------------------------------------------------------------------
    \3\ http://bhpr.hrsa.gov/ahec/
---------------------------------------------------------------------------
    The Alaska AHEC supports strengthening the physician workforce, and 
does so with the following activities:

     Support of a summer program encouraging high school youth 
into medicine and other fields;
     Support of the WWAMI R/UOP Program, a summer experiential 
rotation for first year medical students;
     Support of clinical rotations for medical students 
throughout Alaska;
     Representation of the UW WWAMI Medical School on the AHEC 
Board of Directors; and
     Alaska Family Practice Residency serves as a host 
institution for the South Central AHEC Center.
     Fairbanks Memorial Hospital and the Yukon Kuskokwim Health 
Corporation also house AHEC centers.

                            RECOMMENDATIONS

    The Federal Government has a critical role to play in addressing 
the physician supply issue. We make the following additional 
recommendations:
    First, we applaud Senator Murkowski's Physician Shortage 
Elimination Act, which proposes to:

     Double funding to the National Health Service Corps;
     Expand current medical residency programs;
     Reauthorizes some title VII programs; and
     Bolster Community Health Centers.

    Second, we strongly support the preservation of AHEC funding and 
other relevant Federal programs under title VII.
    The University of Alaska system is severely hampered in its efforts 
to improve the volume and distribution of health workers due to Federal 
cuts that occurred in fiscal year 2006 and are being sustained in 
fiscal year 2007. Broadly referred to as Title VII of the Public Health 
Service Act, and housed in DHHS Health Resources and Services 
Administration's Bureau of Health Professions, these competitively 
awarded grants to the University of Alaska are collectively valued at 
$1.4 million per year and included:
     Geriatric Education Centers, to train physicians and other 
health workers in the provision of geriatric care;
     Health Careers Opportunities Program, to expose youth from 
disadvantaged backgrounds to careers in medicine and other health 
fields;
     Health Education and Training Centers, to expose village 
high school students to careers in health, including medicine; and
     Quentin Burdick Rural Interdisciplinary Training, to 
support interdisciplinary clinical rotations in geriatrics and 
behavioral health.

    All these efforts came to a halt when Congress defunded large parts 
of title VII last year.
    Alaska's AHEC provides a golden opportunity to build a statewide 
system of programs that work on the ground to recruit, train and retain 
Alaskans into health careers. Funds for this program should be 
enhanced.
    Third, we support Federal legislation to address the rural 
physician shortages like the recently introduced Senate bill 498, 
Medicare Rural Equity Act, introduced by Senator Collins and Senator 
Feingold, which provides:

     Rural representation on the Medicare Payment Advisory 
Commission;
     Funding for quality demonstration projects in health 
information technology;
     Funding for hospital-based clinical rotations in 
underserved areas; and
     Elimination of the geographic physician work adjustment 
factor in the Medicare physician fee schedule.

    Fourth, we recommend the U.S. Department of Labor include the 
health industry in list of ``high growth fields.''
    Senator Murkowski, we look forward to working with you as you 
introduce the Physician Shortage Elimination Act and thank you for your 
leadership in addressing the physician shortage crisis in Alaska and 
our Nation.

    Senator Murkowski. Thank you, Karen. You do point out the 
reality, for as long as most of us have been in Alaska, we've 
had a physician shortage issue, and it just depended on what 
part of the State that you were from, as to how acute it was.
    But, I think we're hearing a different level of concern 
now. The second panel, listening to Mrs. Hatch's comments, Mr. 
Appel, and then Mr. Berger. The need is very immediate. And 
very real. When you have to make 100-plus phone calls out of 
the Yellow Pages to find somebody that will take your mother, 
we have very serious and immediate concerns that we must 
address.
    In listening to the very distinguished panel we have here 
in front of us, we recognize that so many of these solutions 
are long-term solutions. We talk about the need to grow our 
own, and Dr. Johnston, I so appreciate what the residency 
program is doing, Dr. Coombs, what we're able to take advantage 
of with the WWAMI Program. But, we recognize that, for these 
young people, from the time that they've indicated an interest 
in going into medicine, and going into a program, it's going to 
be a few years before we're going to see them working for any 
of you.
    So, the first question that I would throw out to those of 
you practicing, currently, or the others--how do we make sure 
that Mr. Berger finds a physician? And I know, I appreciate 
there are no easy answers, there's no one single solution, but 
let's, for discussion purposes at this moment, talk to the 
short-term. Is there anything that we can do for the short-
term, while we work harder for the long-term solutions to do 
more about growing our own? Mr. Tanner, Mr. Neubauer, Mr. 
Perkins, anybody have any good short-term solutions?
    Dr. Tanner. I came to Alaska 2 years ago after an inability 
to sustain a practice in the State of Washington. So, a lot of 
the people have been here a long time, I'm relatively new to 
the State, I got nominated to--as President of the Alaska State 
Medical Association--things develop very quickly.
    My experience within, as a general internists--I specialize 
primarily in the field of diabetology, and also lipidology, 
which is preventative cardiology, basically, there's not really 
a defined specialty within that. But, the complexity of the 
patients that I see everyday, it's very time-consuming.
    In order to make a practice work in the State of Alaska, 
you'd have to average seeing a patient every 7 minutes. I can't 
say ``hello'' in 7 minutes, let alone, review medications, and 
``Oh, by the way,'' you know, you've got multiple problems.
    In 1 year, before I got here, with my mother being my 
receptionist, my wife being my office manager, and being very 
efficient at managing my office, in 1 year, my net income was 
nothing. It's hard to believe that I could make more money 
working at Chuck E. Cheese, than I could actually operating in 
a practice. There's a conflict between the doctor and the 
patient--that the doctor and patient are being thrown into, in 
that in some way we're looking like the bad guys--that we're 
not accepting patients. And in any trade, when you increase the 
cost of doing business--my receptionist needs benefits, my 
office manager now needs to have a salary for her children. My 
nurse needs to have a salary--as everything is going up and 
reimbursements are going down, what that means is, you need to 
see more and more patients, and that time--the valuable time 
that you spend with your doctor where you sit down and analyze 
what is exactly going on--is going out the window.
    So, in order for me to stay financially soluble, I need to 
be paid for what I do--just like the electrician, just like the 
plumber, just like anybody that has a trade that they offer.
    And so, as the reimbursements continue to go down, and 
continue to be threatened to be cut even further, it's going to 
get worse. And, you just have to pay for what you're getting, 
and there's a value to things and goods that are delivered in 
other professions, but this is a right that everybody should 
have, is going to the doctor. And, I'm with the fellow from the 
western part of the State, in Bethel, in saying you need to 
have that continuity, that's why I went into internal medicine.
    I actually was groomed, you know, when I was going through 
my program, ``Oh, you're really, you know, you're a good 
doctor, we want you to be a cardiologist, we want you to be a 
gastroentologist,'' always this push to be a sub-specialist. 
No, I want to be a general internist. I like the continuity of 
knowing patients over a number of years. But, you do get 
disincentivized because you're not being paid. And then you 
hear a lot of doctors that are upset, and daily focus on this. 
And it's like, you know, I do have the best job in the world. 
To sit down with a patient and make a difference in their lives 
and saying, if I have the time--and it's not a narcissistic 
thing--I can prevent you from having many devastating things 
happen in your life.
    And it impacts other things, I talked to a fellow coming 
back from Washington, DC., when I saw you, he's over 65 years 
of age, and I say, ``What do you do for a doctor?'' And he 
goes, ``I just go to the emergency room.'' I mean, that is not 
an appropriate way of handling--but he says he has no choice.
    So, the money's being spent elsewhere, when really, the 
money should be spent with the primary care doctors. And, I'm 
the cheapest thing that Medicare can spend their money on. Labs 
are very expensive. One hour with a cardiologist, doing a 
procedure--extremely expensive. Going to the emergency room--
extremely expensive. But, the total cost for me, in a year, is 
probably less than $500, and I can prevent a lot of those 
things from happening.
    So, that's how you immediately can fix it--is we have to be 
paid. And, it's not a greed thing, I don't have a bunch of 
money in a room, I just go run into and jump in every day----
    [Laughter.]
    Dr. Tanner [continuing]. It is a problem of being able to 
keep the doors open to my practice because I can't pay 
everybody, and then the bureaucracy that goes along with 
insurance companies, and getting things authorized and those 
things--it takes staff, just to get things authorized through 
an insurance company. My authorization should be me signing my 
name on a prescription, that's my authorization.
    Senator Murkowski. You point out that a doctor has the--
certainly the right to be compensated, just as an electrician 
or a plumber, and I don't think that if a plumber were to have 
expenses of 100 percent, he would accept compensation at 40 
percent, and yet that's what we're asking of those docs who do 
see the Medicare patients.
    Dr. Neubauer, do you want to jump in? Short-term solutions.
    Dr. Neubauer. Yeah, I think that partly the answer depends 
on what your definition of short-term is. If you mean, in the 
next couple of years, I think it's likely that things are going 
to get worse before they get better. Because there's--it's 
almost like a perfect storm right now--the capacity in private 
practice, to add new physicians here who do what I do, is very 
limited. And partly that is because general internists in this 
town have--as a rule--pared down their practices to bare bones. 
You know, they work in small offices that have very little 
capacity to add another physician, and they've pared down their 
expenses, in an effort to survive, so that they can keep going.
    So, the surge capacity in the private world is very limited 
right now.
    You know, I think that in the sort of longer short-term, 
there's more hope. And that is that I think there's a lot of 
willingness on the part of young people coming up and training 
to do the work. I'd be interested in what the students here 
would say, but I think the attractiveness of being a doctor--I 
mean, you know, seeing patients, thinking, trying to solve 
their problems--is great. And the push to go into fields of 
medicine that are highly technical, highly compensated, is 
primarily a financial one.
    I think there would be a much more even spread of what 
people went into, if there weren't these gigantic differences 
in what a highly paid technical physician makes, versus 
somebody who does what I do, and what Dr. Tanner does, which is 
sit in an office and think. You know, it's a lot of fun to 
think, and it does a lot of good, and I think there's a lot of 
attractiveness to it. It's a different kind of work than 
reading an echocardiogram, or sitting and reading x-rays all 
day--which is also very important. But, I think there needs to 
be a bigger spread of what people go into. And right now, 
there's a tremendous push to go into the higher paid things.
    One thing that I think needs to happen is for there to be a 
continuity of things, that when a physician leaves practice, 
that somebody else wants to come and do their work and take it 
over, not just have it end. And that, unfortunately, has been 
the model here, as I mentioned in my testimony. It's a huge 
tragedy, when I see a physician retire here, and, as I said, 
close their doors, charts go in storage, patients scattered to 
the wind. That's absolutely wrong. There should be a 
willingness of somebody young to come and take on that 
practice, and right now, there's just no incentive to do that. 
It's not looked at as something of value.
    And I can cite to you example after example of physicians 
who have left here over the last 25 years I've been observing 
and that that has happened. It's an extreme tragedy.
    Senator Murkowski. Let's just focus on the recruitment 
issue for a second, because that's--as you point out, an area 
where we're not able to provide for the continuity of care that 
I think we would all like to see. When you have somebody who's 
retired, or you've got an expanding medical practice, and 
you've got room to take on more, if you could find the 
physician to come in.
    I understand that here in Anchorage, where we've got our 
only rheumatologist in the State, we've got one rheumatologist 
who's been trying to retire for years, but he can't do it 
because there's nobody who will step up and take his practice, 
and his commitment to his practice is such that he doesn't want 
to leave them in the lurch.
    But, yet at some point in time you've got to have that 
backfill, if you will, you've got to have those reinforcements 
to step up.
    When we did the Town Hall meetings last year, the stories 
that I was hearing about the medical practices that had been 
looking for 18 months to fill a slot for an internist, 2 years 
to fill a slot for an internist--what else are we doing wrong 
that we can't attract them?
    Part of it, as I recall, was the great lure of coming to 
Alaska, and the adventure of being here. But, I guess the 
adventure of being in Alaska, is outweighed by the fact that 
you might not be able to afford your Alaskan adventure, is that 
still our situation?
    Dr. Neubauer. Well, you know, I think more money is always 
good.
    Senator Murkowski. Money always helps.
    [Laughter.]
    Dr. Neubauer. And I think that is one solution, honestly. 
But, I think there are a few others. I think that Electronic 
Health Records have great promise. I think that if an office 
has a robust Electronic Health Record, that's a saleable point 
for somebody coming in, wanting that practice. And, I think in 
general, across the country, it's almost expected for young 
physicians, the few that are going into primary care practices 
right now, to want that and have it as a requirement.
    So, I think that's very important. And, that's something 
that, I mean, this is a wealthy State, we should be supporting 
physicians in ways that we can, by giving them subsidies to put 
in place Electronic Health Records, and I mean the physicians 
who are in practice now. Because I think that would not only be 
a recruitment point, but also something that would make it much 
more likely that when they leave practice, that somebody would 
be there to take their place.
    So, more money, and Electronic Health Records, that would 
be a good start. And, I think, increasing the pipeline of 
people coming in is extremely important. I mean, if there's 
nobody interested in taking the job, you're sunk in the water. 
So, you have to have people coming up in the pipeline who want 
to be there.
    But, then you have to incentivize for them to want to do 
that, and be able to do that. Because, I think, when you're 
saddled with $150,000 to $300,000 of debt, you're not going to 
do what I do for a living. It's, you've already bought two 
houses before you're going into practice.
    Senator Murkowski. Dr. Coombs.
    Dr. Coombs. Well, I'd like to make a couple of comments. 
First of all, I think we've heard from the panel, but also I 
think the students in the audience would agree that they are 
going into medicine because of the fact that they want to make 
a difference. That they are very happy with a professional life 
and the kinds of things that they can do for others, that's not 
the issue.
    I think the issue is dealing with the stark realities that 
we enter into, in terms of both--two things. First of all, once 
you have a shortage of people, then you never have enough to be 
able to meet the needs, and that is something that preys upon 
your private life, in addition to your professional life. 
Especially in isolated, small communities.
    The second thing is, dollars. Fund it, and they will come. 
If you look at, as an example, two things that I'll give you an 
example of--in Washington State where I practice, currently 
private insurance pays up about $56 per relative value unit to 
take care of a patient. Medicare pays about $36. Medicaid pays 
about $22. It's impossible to meet the overheads, which are now 
60 to 70 percent in a primary care office, to be able to 
provide for just the care that you have to provide, and the 
staff that you have to provide to achieve that.
    In addition to that, you have debt, and other 
considerations. So, the unfortunate thing, is that students and 
many professionals now run into the stark reality, which is 
something where they have to do something which really is 
survival mode, in terms of the ability to keep the door open, 
to allow patients to come in the door. And that means, 
restricting the patients that they see.
    It's not something that's part of the Hippocratic Oath. It 
is not something that we went into medicine to do. It's just 
reality.
    Senator Murkowski. I'm going to go a little out of line 
here, a little unorthodox for a hearing, but I'm going to ask 
some of you students who are part of the WWAMI Program, what 
would incentivize you to stay here in the State, to go into the 
areas of--as Dr. Neubauer has indicated--into the primary care, 
internist areas? What's it going to take to keep you here, to 
provide the level of service that we would like to see for 
Alaskans? And, if I can just ask you to stand if you want to 
share a thought with us, and speak loudly so that we can pick 
you up on record.
    What have we got? Probably better if you could come up to 
the mike; you don't even need to get fancy.
    Melissa. My name's Melissa, and part of it for me is, you 
know, I'm facing $100,000 of debt, and that's really scary. I 
want to know that I'm going to be able to, you know, pay that 
back. And, for me, it does come down to money, and being able 
to deal with my loans, and sort of having help with assisting 
that, and incentive programs to come back here.
    Senator Murkowski. Where are you from, Melissa?
    Melissa. I'm from Eagle River.
    Senator Murkowski. We want you to come back.
    Melissa. I want to come back. I mean, Alaska is a great 
place to grow up, so I'd love to come back here, so hopefully 
it will work out.
    Senator Murkowski. OK, we'll work on that.
    Who else has a--what would allow you to continue to stay 
here in Alaska?
    Ross Baldwin. Ross Baldwin from Kenai, Alaska.
    I'm actually not too concerned about the whole debt thing, 
because I'm interested in surgery, and I'm going to get a lot 
of dirty looks right now.
    But, one thing that does concern me, as these guys 
addressed over here, and I actually got to spend some time 
working under Dr. Perkins--he's an amazing guy--but, the lack 
of residency programs in the State, or that feed into residency 
programs in the State, is a huge concern for me.
    If I want to do a surgical residency, which is roughly 7 
years, 6 or 7 years from my understanding--I can't be in Alaska 
for those 6 or 7 years. So----
    Senator Murkowski. So, 7 years, you're gone.
    Ross Baldwin. Right.
    Senator Murkowski. What happens if you fall in love with 
somebody who doesn't want to come back to Alaska? What do we do 
to make sure that we can have residency programs for somebody 
like you?
    Ross Baldwin. I don't have any excellent solutions, because 
I don't have enough knowledge about residency programs at this 
point.
    [Laughter.]
    Senator Murkowski. Then we're just going to have to hope 
that you find a young woman here.
    Ross Baldwin. Right.
    Part of the problem is that we have a small population 
base, and a lot of the surgical residencies are uncomfortable 
with putting forward a residency program with that small 
patient base.
    I think that there's some innovative solutions out there, 
I'm not qualified to offer any of those, but I definitely think 
that there could be something done to increase residencies, not 
just in the surgical area, but beyond basic family practice. 
Internist residency, I think, would be an excellent addition to 
the State.
    And also, just to kind of give you some additional 
perspective from our community. I grew up in Kenai, and I went 
to a clinic there where there was a primary care physician, and 
he just closed his doors, and there's no one coming in to 
replace him. The need is real, it's very, very real.
    So, thank you for your time.
    Senator Murkowski. Thank you, Ross.
    The statistics that we have out there are so troubling, 
though, when you recognize that the majority will stay in 
practice, what is it, within 100 miles of where they have done 
their residency. So, that just automatically precludes so many 
of the young Alaskans, if you're going to go outside for 6 or 7 
years to do that residency.
    What do we do, Dr. Johnston?
    Dr. Johnston. Well, I think there's, really logically, only 
a couple things that can be done. The range of possibilities is 
not huge. We can have residencies here in Alaska, or we can 
have branches of residencies here in Alaska. And, really, those 
are about the only two ways that you're going to have that 
final phase of graduate training in the State.
    The data that you cited that depends on specialty a little 
bit--but around 70 percent of residency graduates practice 
within 100 or 150 miles of where they train--are based upon 
graduates of full-fledged residencies, where the resident does 
their whole 3 years in that program, such as our program here 
in Alaska.
    There are other possibilities where residencies in other 
States, such as Washington, could have residents rotate in 
Alaska for a period of time, as a way for us to make them fall 
in love with the State, so that after they graduate from their 
residency in Washington they would want to come up here and 
practice. I don't know that there's any data on how effective 
that is in attracting people to ultimately practice in the 
State, maybe Dr. Coombs knows more, because he's involved with 
graduate medical education on a larger scale than I am.
    But the University of Washington, WWAMI program has 
proposed to us, on several occasions, to try to develop those 
kinds of programs with the idea that it would allow Alaskans an 
opportunity to do at least some of their surgical residency 
here in their home State. If that's going to keep them from 
falling in love with a woman from Washington, I don't know. 
But, maybe we can have a parade of young ladies there that----
    [Laughter.]
    Senator Murkowski. That's not going to be part of our 
medical solution.
    Dr. Coombs.
    Dr. Coombs. I'd just like to make a comment on Dr. 
Johnston's--I was in Boise, Idaho last week, and we were just 
establishing a psychiatry residency, actually, in Idaho, that 
will be shared 2 years in Seattle, 2 years in Boise, which is a 
combination between the Boise V.A. and the two downtown 
hospitals in Boise.
    We've had success, since 1991, with psychiatry residency 
like that model in Spokane, and I know Senator Murray is on 
your committee, where we've had 2 years Seattle, 2 years 
Spokane--64 percent of its graduates have gone into practice in 
the Greater Spokane area, 84 percent in eastern Washington. And 
mental health is a huge issue in that respect. I know that's 
something that, in Idaho, they're delighted to see that.
    In general, internal medicine, we have had a program, 
again, in conjunction with the Boise V.A.--I mention the V.A., 
because the V.A. right now is in the process of increasing by 
almost 1,000 residency slots nationwide, in terms of increasing 
the amount of residency positions which are supported. I'd love 
to see that come to fruition here in the Greater Anchorage 
area, to engage the V.A. in terms of residency training.
    But our internal medicine program, again, based at the 
Boise V.A., has been responsible, with over 80 percent of its 
graduates going into practice within the WWAMI area, including 
within the State of Idaho, 57 percent. So, those are general, 
internal medicine, primary care, and total medicine residents. 
There are models, it's a matter of having, I think, the 
flexibility within the GME process to be able to do that. Not 
only in funding, but also in the accreditation cycle.
    Senator Murkowski. Now, Dr. Johnston, you had mentioned 
that Alaska has the lowest number of students coming, of being 
accepted into the medical schools, if I remember that recap.
    Ms. Perdue, we recognize, and our Task Force has been 
looking at the shortage, is--from the University perspective, 
should we be doing more to encourage, at the high school and 
the college level, the interest in getting into this healthcare 
pipeline? I mean, we acknowledge that we don't have a lot of 
folks here in the State, but our reality is that we should be 
doing a little bit better about growing our own, but if we 
don't have people that are interested in getting in that 
pipeline at all, it's going to be tough to achieve what many of 
you have suggested. Are we pursuing that, at all, through the 
University?
    Ms. Perdue. Well, the University, as I mentioned, has been 
focusing on beefing up all of its healthcare opportunities, 
from nursing to----
    Senator Murkowski. You've been very successful with the 
nursing component.
    Ms. Perdue. Correct. So, we find the interest is there, but 
we find that the need for the math skills, and the science 
skills and so on, you know, really must be taken care of, 
hopefully not after the student starts to apply for the 
program. In other words, there are summer opportunities, and if 
you can't get those programs in your high school, they can be 
supplemented--those are all things that many of the title VII 
programs that we talked about, are meant to enhance in our 
State. Not that that's solely the responsibility of the Federal 
Government--certainly the school districts and the University 
working together have a need for that.
    Because it's not only for students going into medical 
careers, it's engineering, and other areas where we need those 
technical skills. But, we need those internships, we need those 
summer programs, we need that exposure for rural students, and 
urban students alike. And we are very anxious to do more of 
that.
    Senator Murkowski. I've got a whole host of questions, I 
could keep you here all afternoon, but we only have the hearing 
room until noon today, and we do have some additional folks 
that have indicated they would like a couple minutes at the 
microphone, so I want to give them that opportunity.
    I think it was you, Dr. Tanner, who mentioned that with the 
recent military deployment there has been even further pressure 
on the local practitioners to pick up the patients of those who 
were being seen by some at the medical unit there at Elmendorf. 
Can you give me a little bit more in terms of background on 
that, and how it has affected the practice here in the area, 
and the pressures?
    Dr. Tanner. What I can respond to is what happens in my 
office, and people calling my office daily. And it seems, we 
get more questions with regard to taking some of the military-
sponsored insurances as they're supplemental insurances, as 
well as, the numbers have increased since we've seen the 
conflict in the Middle East. The specific numbers, I'm not sure 
of.
    Senator Murkowski. Any--Dr. Neubauer, are you getting the 
same inquiry?
    Dr. Neubauer. I'm not sure. What I do know is that my 
office gets, probably 10 to 20 calls a day for new patients 
that want to come into my practice, and the others in my 
office, and we take some of those.
    One of the things, just to mention, that I think that 
there's a tremendous willingness on the part of doctors to try 
and do the right thing. You know, I think there have been a 
number of doctors in Anchorage that have opted out of Medicare 
altogether, and that's not healthy when you have such a small 
number of doctors.
    Tri-Care, I'm not sure what's going on with taking Tri-Care 
patients right now. But, I do know that between all of the 
patients seeking care, there's just no way that primary care 
doctors who are here can do all of what needs to be done.
    Senator Murkowski. Do I understand correctly that, if you 
are going to accept Medicare patients, you basically have to 
opt-in or make a statement that you will be accepting those 
patients, and you essentially make that statement on an annual 
basis. And if you decide at the beginning of 2007 that you are 
not going to be taking any Medicare patients, you may not take 
any for the duration of that year?
    Dr. Neubauer. There's three ways you can handle the 
Medicare program. One, is by being a participating physician, 
which means that when you see a Medicare patient, you can't 
bill the patient at all, you bill the Medicare program and are 
reimbursed directly from Medicare.
    You can be what is called a nonparticipating physician, 
which is kind of a misnomer. And what that basically means is 
that when you see a Medicare patient you can bill the patient, 
and you're allowed to bill them up to the Medicare-allowable 
rate, which is actually a little bit more than you get if you 
just get paid by Medicare. And you can collect from the 
patient, and then the patient can collect from Medicare to be 
reimbursed part of that fee.
    And, so it's not really nonparticipation, it's just a 
different kind of participation. And then you can opt-out, 
which means you do all the things to basically say, ``I'm going 
to have nothing to do with the Medicare program,'' and then you 
can bill the patient whatever you want. And that's something--
as I say, I think--two physicians that I know of, two 
internists in Anchorage have done.
    That's pretty extreme, and basically, I know in my patient 
population, that would essentially disenfranchise most of my 
patients. I mean, I have a few wealthy patients who could pay, 
you know, huge fees if I wanted to charge them, but most of my 
patients are just struggling along, and so, I just, frankly, 
couldn't do that to them.
    But, there are a few physicians who have taken that route, 
just kind of in disgust, I think, over what's going on.
    The 40 percent number is real--I've just looked at what my 
charges are versus what I get from Medicare, and it's 40 
percent. And, I can tell you, it's very, very difficult. I 
mean, we struggle on a day-to-day, month-to-month basis to just 
pay the bills. And I don't make an extravagant salary at all. 
So, it's just very difficult to run a business that way. In 
fact, it's getting more difficult, and it may get close to 
impossible, if it gets worse.
    Senator Murkowski. Dr. Tanner, and then I want to ask Dr. 
Johnston a question.
    Dr. Tanner. One thing is that, there are physicians that 
can opt out, but the patient can't opt out. If you turn 65 
years of age, you have to take Medicare as your primary unless 
you are full-time employed.
    There are patients that would like to opt-out and use their 
State benefits as an insurance, to be their primary carrier, 
but they don't have that opportunity.
    The other thing is there's a misconception amongst a lot of 
patients that, if they have a deductible that it pays the 
physician the difference between the routine fees and Medicare 
fees. And that's not allowed. There, it's paid at the hospital, 
they pay their labs, but the secondary insurance pays nothing 
to us. And so, just a couple things where they're, they could--
actually just allowing patients to opt-out of Medicare would 
eliminate some patients off the Medicare roll, so to speak, and 
then----
    [Applause.]
    Dr. Tanner [continuing]. And then allowing Medicare to 
allow a secondary insurance to pay the difference and just 
those two things right there would allow the physicians, 
actually, to incorporate Medicare back in their practice. 
Because it may come close to what we normally would be paid by 
insured patients, but it allows a little bit more flexibility 
rather than just making everybody do it. Thank you.
    Senator Murkowski. Very good point.
    Dr. Johnston, I wanted to ask you about the caps. You had 
mentioned that--if we were able, if we could remove those caps 
that are in place--were we to do so, how many new residents 
could we bring into the residency training program?
    Dr. Johnston. Well, currently our residency program is 
planned around having 36 residents, that's 12 per year for a 3-
year program, and our cap is about 22. We can't really--we're 
already operating at a substantial deficit.
    If the caps were lifted so that we could count all 36 of 
our residents, that would just about fix the biggest part of 
our current deficit.
    The controlling factor--if there were no caps at all--the 
controlling factor and the size of the residency would be such 
things as teaching opportunities, the size of the facility 
where the residents practice and train, and those sorts of 
things.
    You know, just off the top of my head without planning it, 
I would say our program could probably go to maybe 15 per year 
from the 12 that it is now, which would be a significant 
increase. But the interesting thing about lifting the caps, 
would be then it would create the opportunity for us in Alaska 
to start opening other residency programs. You know I have a 
pro forma that I'm going to be discussing about starting a 
psychiatry residency program here. A general internal medicine 
residency would be something that could easily be done in a 
place like Providence, because we have the quality teachers, we 
have the quality physicians and we have the patient base. Parts 
of a surgery residency could be done here in Alaska. A 
pediatric residency would be possible. But we can't do any of 
those now because residency education is so expensive, that 
without a funding stream to support, no institution is going to 
go out on a limb and start a residency program. Right now 
Providence Hospital, the only sponsoring institution for a 
residency in Alaska, is losing $2 million a year to keep our 
program going. They're not going to start another program 
that's going to lose them another $2 million a year, so they 
have to have a funding stream.
    And so the caps--my feeling is that if our residency 
program as it is now or slightly larger--operates for a number 
of years, we will be satisfying the need for primary care, for 
family physicians for Alaska. Because we're the biggest 
residency program in the Northwest, in the WWAMI region right 
now. We're the biggest family medicine residency program of all 
the WWAMI States. But we're not going to solve the physician 
problem in Alaska by just pumping out more family doctors. We 
have to be able to produce the other specialties that are 
really needed in the State and we can't even touch that until 
we can get the caps lifted.
    Senator Murkowski. Well, and when we figure we need 59 new 
physicians a year for--through the year 2025 to just become on 
par with the population-to-physician ratio in the Lower 48. 
Even adding those additional slots, it just seems like you 
can't get ahead of the wave here.
    Dr. Tanner. Can I comment briefly on a question you asked 
earlier, which is what can we do immediately to fix the 
problem? And the problem seems to be that there just aren't 
doctors out there that want to come to Alaska, and join Dr. 
Neubauer or the other practices that are, that would be able to 
recruit and have these physicians if they were around.
    I think the problem is that shrinking supply nationally--
and in a world of a shrinking national supply--you have to be 
extremely competitive in order to be able to draw the few that 
are available to your place as opposed to having them practice 
somewhere else. We're not very competitive in recruitment right 
now. Because the people who are trying to recruit are docs, 
like Dr. Neubauer who are in small offices. They don't have the 
resources just to keep their doors open hardly, let alone 
advertise, go on trips to residency programs in the other parts 
of the United States to solicit, pay recruitment sign-on 
bonuses, guarantee the salary for the first couple years, pay 
the recruitment trips where they come up and interview and meet 
the docs and everything--they don't have the resources to do 
that. So we're totally noncompetitive in that.
    Some of the hospitals are stepping up to that plate trying 
to help out. Their budgets for that are very limited as well. 
If you want an immediate solution to the problem of physician 
shortage, we have to get organized and get aggressive about a 
recruitment process and that has to be done on a much larger 
scale than the individual practices. Which is one of the 
reasons that the Physicians Supply Task Force made a 
recommendation for a statewide office to help support those 
activities. But that's going to have to be funded, because 
there's a significant amount of cost that goes into those kinds 
of activities. And if anything can be done on the Federal level 
to help fund that I think that would be very beneficial.
    Senator Murkowski. Very constructive.
    Excellent comments. I appreciate the input from each of 
you. It's quite apparent that there is passion at all levels, 
whether within your respective practice or what you're doing to 
cultivate those physicians who will be serving us.
    But I appreciate, again, all that you have provided us with 
here today, in terms of your insight and the possible 
solutions, both long- and short-term. I thank you.
    And we now will have an opportunity for individuals to make 
very brief comments. I'd ask that you try to limit your 
comments to no more than a couple minutes. And I realize you 
may feel that that's not fair because these folks had a good 
opportunity to present theirs, but I do want to be able to hear 
from everyone.
    I do have a sign in sheet that we will follow off of. The 
first person that we will hear from is Diane Holmes. The second 
is Diane DeSanto, and then we will go to Jenna Lundy. So if 
those of you who are not on a list wish to testify, I would 
just ask that you line up there toward the back.
    Ms. Holmes, welcome.
    Ms. Holmes. Senator, my comments are of course directed to 
you, but also if they'll stick around, to the WWAMI students.
    I'm a detail person and I do have some solutions that I 
hope you will hear me out including how to get or keep people 
here, good medical people here.
    There's unnecessary shortcomings to this system. The first 
situation I'd like to bring to your attention is that Medicare 
regulations actually cause higher costs. I am discouraged from 
getting lab work at the cheapest, but quality, lab in this town 
because Medicare--I can not submit Medicare forms, because my 
lab will not submit Medicare forms--and the regulations that 
might allow me to be reimbursed are beyond ridiculous.
    Why can't the reimbursement procedures be streamlined so 
that I can submit my $35 lab fee that gives me three times the 
amount of tests than a somewhat similar one at the hospital? 
Granted, I was not a Medicare patient at the time. However, 
there is a page in the Medicare Web site, and I have an 
outdated form that should allow me to submit my claims and be 
reimbursed myself, but it is so ridiculous. I can not do this 
until 15 months have passed. There needs to be something done 
so that I can do this myself.
    Regarding the web information, you're not the webmaster and 
I won't bore you with the details, but it is inaccurate, and I 
could do a much better job, and I hope you will put me to the 
right person.
    Are you aware about the contracts? There are doctors in 
this town who require their Medicare customer to sign a 
contract to be seen. I'm told by my secondary insurance----and 
by that I mean the company, actually the State, secondary 
insurance that pays the paltry 20 percent of the remaining 
Medicare allowable fee--that if I sign a contract they will not 
pay that 20 percent. I don't know how they're going to find out 
if I have paid that or not, but, and I don't even know if I can 
submit to Medicare after I have paid that, but these are things 
that need to be looked into.
    No. 3, the bill. There's a bill that the doctors could 
charge me 115 percent of what is allowable for a Medicare CPT 
code procedure. Why can't I just pay the difference between 
that and the regular bill, as you just heard some of the 
doctors say? I could get my miles and submit my own claim.
    [Applause.]
    I have been doing that for a long time, and as long I have 
the grey matter to fill out the forms, why not let me? And if 
by doing this, this would allow some Medicare customers to be 
seen by the doctors because those of us that may be able to pay 
the full difference, can. And we would be, then, a regular 
paying customer.
    And the last thing I'd like to say, how do you get more 
doctors to stay here? I'm afraid you have to look beyond 
medicine. You have to look as to what makes a healthy 
community, and a healthy person. And that is, we want to make a 
livable city so that these--I call them kids, they are pretty 
young--will want to come back. We need a walkable city, and we 
have to make sure that we have a city that has good northern 
climate land use designs.
    And it's very appropriate right now because we have title 
21 coming up and this Administration and the people in Juneau 
can do an awful lot to making good northern city communities, 
particularly with the $93 million sitting there now to be given 
probably, unfortunately to Anchorage for a bridge to nowhere, 
very soon.
    Senator Murkowski. Thank you Ms. Holmes.
    Diane Santo. Oh, okay.
    Welcome Mr. Jesse.
    Mr. Jesse. Thank you, Senator. Again, our appreciation for 
holding this hearing. Diane DeSanto, unfortunately, had to go 
back down to the Mayor's office.
    Well, certainly this is an issue for many of us, 
particularly around psychiatry and particularly around 
children's psychiatry. Listening to the testimony about doing 
residencies and partial residencies, all of those opportunities 
I think are very positive. If we could set that sort of thing 
up in Alaska, particularly now with our Bring the Kids Home 
initiative, where we are building in-state capacity and 
partnership with the University on workforce issues--I think if 
we are able to develop that kind of a connection between those 
people that have these skills and are interested in serving 
this population--I think this could be a very positive thing. 
Certainly the Mental Health Trust Authority would be interested 
in partnering and developing that kind of residency program 
within the State.
    So with that, good luck, and thank you very much.
    Senator Murkowski. Thank you, we appreciate what you do 
with the Mental Health Trust Authority.
    Next we have Jenna Lundy, and following Jenna we have Chad 
Whitaker, and then Wayne Westburg.
    Ms. Lundy. Senator Murkowski, I'm really nervous, but 
thanks for letting me speak. I'd like to respond first of all 
that I do not think that there's a quick fix.
    I have here a teacher orientation book from 1968 that was 
produced by the Bureau of Indian Affairs. My family came to 
Alaska at that time and let me just read for a moment, the 
section on village health states,

          ``The teacher plays a major role in disease prevention. Good 
        health practices are learned chiefly in the school. The teacher 
        has an obligation to become acquainted with prevalent health 
        problems, and methods of prevention. Medical personnel should 
        be consulted, and practical health routines developed, which 
        can be observed in the home as well as in school. Some common 
        health problems: eye and ear infections, respiratory ailments, 
        skin infections, dental cavities, stomach and intestinal 
        disorders.''

    Any of you that practice medicine in this room today knows 
that those are the things that the people in our villages face 
now. So next year will mark 2008. In 40 years, this list has 
not changed. Forty years. Is there a quick fix?
    And then this report that, actually I just browsed through 
while I was sitting here, but one of the other concerns that I 
have just from comments that were made--it says real clearly 
here that healthcare workers who grow up in a rural location 
are more likely to be recruited to rural practice. Can we, 
indeed, bring people from the Lower 48 to places, perhaps 
Anchorage, perhaps Girdwood--but can we bring someone to Bethel 
where I grew up? Can we bring someone to Hooper Bay? Can we 
bring someone to the Village of Napakiak, to Fairbanks, to Tok 
where I was last week, but only because I had canceled the 
previous trip because it was 52+ below? How do we bring someone 
from the States to practice medicine in a place like Tok where 
it does, you know, reach 52+ below? Anchorage is pretty mild. 
Homer, the Kenai--pretty mild climates.
    We have trouble maintaining physicians out in rural Alaska. 
We don't have any, at all. The wait time is 3, 4, 6 months out 
before someone can see a specialist.
    I recently had a very, very close friend who went to ANMC 
here, in Anchorage, and was not referred to a specialist, 
because her condition wasn't chronic. When Dr. Neubauer spoke 
of a person in his practice who retired, that person came to 
this lady's aid, and because he was willing to do--come out of 
retirement--that woman is alive, today, literally. He saved her 
life.
    But, that isn't actually what I came to--what I asked to 
speak to today. I'm an educator by training, and so I can also 
relate to being paid for the services that you're providing, 
equitably. And I do understand that there are many physicians 
that go into the practice of medicine not merely because of the 
amount of money that they're going to make, but because of the 
human service that they're going to provide.
    Out in the Bethel area, we are blessed with Dr. Carpenter, 
who is a dentist. He did fall in love with Bethel, he did fall 
in love with the people of the YK Delta, and he chose to stay 
there and serve those people.
    Dr. Breneman, I'm sure that there are other doctors that 
could be listed, from around the State--but those people have 
either passed on, or they've retired. And, these young people 
that are sitting here--I hope that they are going to step into 
those shoes. When I hear of the young man that's from Kenai, I 
hope that he chooses to go back to practice in Kenai.
    I know the allure of the States, as I keep saying, but the 
allure is great. And many of our retirees are leaving, also, 
because it's great. But, I would like to say that two of my 
colleagues are here with me, and we work with Head Start, and 
we work with an organization that has 24 Head Start programs 
across the State, and we have five early Head Start programs. 
We serve 161 children in the early Head Start program--that's 
birth to three. And, of those 161 children, only 64 of them are 
up to date on their well-child screenings. And, I have numbers 
and statistics that I won't go on and on about, but thank you 
for listening.
    Senator Murkowski. Thank you, I appreciate it. Thank you 
for giving us that rural perspective.
    Jed Whitaker, followed by Wayne Westburg.
    Mr. Whitaker.
    Mr.Whitaker. Thirty-one cents of every healthcare dollar 
goes to the paperwork and administrative costs of a healthcare 
system convoluted by insurance. The high cost of healthcare is 
due to the inefficiency and greed of the insurance industry.
    You are quoted as saying we are facing a physician shortage 
crisis in Alaska. Your solution, like any good Republican, is 
to give a tax cut of $1,000 a month to doctors to entice them 
to service Alaska. Doctors, who are already in the highest 
income bracket, bribed to practice medicine in Alaska. Solid 
Republican rhetoric, because Republicans understand bribes.
    Solid Republican rhetoric that asks us to support the war 
criminal in the White House, and the trillion dollar costs of 
fighting a war that cannot be won, fighting a people who did 
not attack America. Rhetoric that says, ``Support the troops,'' 
with one tongue, while the other tongue cuts Veterans' 
benefits, and Medicare. Rhetoric that eliminates the Estate 
Tax, a tax which frees just one family, the Waltons, heirs of 
Wal-Mart, a $32 billion windfall, with one tongue, while the 
other tongue cuts Medicare by $28 billion. Solid Republican 
rhetoric that would have us believe that tax cuts for the rich 
are good for the country, while the cost of going to college 
has risen 35 percent in the last 4 years. Rhetoric that opposes 
a living minimum wage, let alone a minimum wage that could pay 
for the cost of attending medical school. Solid Republican 
rhetoric that equates military might with national security, 
while the health of Americans--the real national security--
fails.
    The annual cost of the war in Iraq is approximately $120 
billion a year. Supplemented by sole-source contracts, to 
Christian right private army corporations, like Blackwater, and 
friends of Cheney, like Halliburton, who approach a total cost, 
to date, of close to a trillion dollars. A trillion dollars to 
fight a war that cannot be won, killing a people who did not 
attack America. That $120 trillion a year could pay for 
universal healthcare, for all Americans, not just Alaskans. It 
could also pay for a free college education, and the cost of 
medical school for at least two--if not more--people from every 
village and city in Alaska.
    If you are really serious about solving a physician 
shortage crisis in Alaska, stop funding the War in Iraq, and 
start funding a program to help the people of Alaska become 
doctors.
    To have this hearing today, you did not do your job. There 
was a nonbinding resolution opposing the escalation of the War 
in Iraq. You didn't even--you weren't even there to vote, to 
allow that debate to continue. Shame on you.
    That is the reason why we have a shortage. We are not 
investing in our people. Instead, we are conducting wars that 
are illegal and immoral all across this world at a tremendous 
cost. Giving tax cuts to the rich, and creating big budget 
deficits. And now, with the Democrats pay-go, all the ideas 
that were presented to you by all of the esteemed panelists 
cannot be funded--cannot be funded--because the Democrats are 
going to insist that the budget be balanced. And the only way 
that you're going to be able to balance that budget, is to end 
the War in Iraq.
    Senator Murkowski. Thank you, Mr. Whitaker.
    Mr. Wayne Westburg.
    Wayne Westburg. Thank you for being here, Senator.
    I'm 68 years old, and I work full-time, and I've, in the 
last 6 months, had an interesting education. My doctor in--and 
I'm sorry, some of this is redundant, but I think it's worth 
emphasizing--my doctor informed me he was retiring. 
Consequently, I've spent about the last 6 months calling 
clinics, doctors all around town, and have found that nobody--
virtually nobody--is taking new Medicare patients.
    And, I don't believe it's because of the workload. Being 
the individual that I am, I got into some intense questioning 
of office personnel and that--I never really did get through to 
talk to a doctor--and the reason that they're unable to 
accommodate new Medicare patients is pure and simple, money. 
That, and a second issue is paperwork, and the bureaucratic 
hassle of trying to collect from Medicare, which apparently is 
quite a problem, also.
    I even offered, naively, to pay the difference. I feel 
that's a right that we should have, and they can't legally 
accept any additional payment for Medicare-reimbursed services.
    Interestingly, I just had a colonoscopy, and I had no 
problem finding a specialist to do it, who would handle, who 
would take Medicare. I'm in the process of shopping for new 
knees, and I have no problem coming up with specialists to do 
that stuff. It would appear that the problem is Medicare 
payment on general practitioners. And, I hesitate to use the 
term discriminatory--I don't know if it's purposeful, but for 
some reason, they're just not reimbursing the GPs what they 
need, and the constant statement is, ``It doesn't even cover 
our overhead.''
    Now, I have actually come up with a solution to the 
problem, and it may be one that more and more seniors are going 
to have to take, and that is, I've gotten with a nurse 
provider. And I'm very happy and very satisfied, and they're 
enthusiastic, and appear to be very knowledgeable. And that 
appears to be a workable alternative.
    The only other thing that I would say is, and I've 
complained to AARP and whoever else I could think of, but this 
is a situation which--I consider myself to be a well-read 
individual, and I walked right into it, 3 years after I was 65 
years old, not knowing about the issue, and it appears that--
from the calls that I've made around, that the issue, or the 
problem, is well-known nationwide, it's just that very few 
people are talking about it, or addressing it. And that's all I 
have to say. Thank you.
    Senator Murkowski. Thank you, Mr. Westburg, I appreciate 
that. I think you're right. I think a lot of people get to that 
Medicare-eligible age, and realize that this is a problem 
that's been out there, but they just were simply not aware of 
it, and now they're in the middle of it.
    I want to thank all of you for being with us this morning. 
We were scheduled to be out at noon, and it's noon straight up, 
so again, I want to thank you. There are some others who have 
indicated that they would like to submit testimony, and again, 
as I indicated this morning, we'll keep the record open here 
for several weeks for you to do that. I think we've received 
some written testimony already this morning, that will be 
included as part of the record.
    Senator Murkowski. But, I appreciate the perspective that 
so many of you have lent, whether it's from the consumer 
perspective, or whether from the provider perspective. And 
again, to those of you who are part of the residency program, 
part of the training program now, we welcome you, we thank you 
for your commitment to serve, and we wish you well. And we do, 
plead with you, to come back. We need you here.
    And with that, we'll conclude the hearing.
    [Additional material follows.]

                          ADDITIONAL MATERIAL



                            Acknowledgements

    The Alaska Physician Supply Task Force wishes to thank the staff 
for their time, diligence, and expertise provided throughout this 
project. We also thank all those who contributed their knowledge and 
expertise in providing information and comments on our report.

Task Force Members

    Richard Mandsager, MD, State of Alaska Director of Public Health 
(Co-Chair)
    Harold Johnston, MD, Director, Alaska Family Medicine Residency 
(Co-Chair)
    Rod Betit, President, Alaska State Hospital and Nursing Home 
Association
    Jan Gehler, Ph.D., Interim Provost, University of Alaska Anchorage
    David Head, MD, Medical Director, Norton Sound Health Corporation, 
and Chair, Alaska State Medical Board, representing Alaska Native 
Tribal Health Consortium
    Jim Jordan, Executive Director, Alaska State Medical Association
    Karen Perdue, Associate Vice President for Health Affairs, 
University of Alaska
    Dennis Valenzeno, Ph.D., Director, Alaska WWAMI Biomedical Program

Staff

    Patricia Can, Alice Rarig, Joyce Hughes, Stephanie Zidek-Chandler, 
and Jean Findley, from Health Planning and Systems Development Unit, 
Alaska Department of Health and Social Services, staffed the Task Force 
and coordinated production of the report.

Project Funding and Support

    Funding to support the Alaska Physician Supply Task Force was 
provided by the University of Alaska Statewide, Office of the Associate 
Vice President for Health through Federal grants from the Health 
Resources and Services Administration, Office of Rural Health Policy, 
Special Projects (#D1ARH00052) and Centers for Disease Control (#H75/
CCH024673-01). Additional funding for staff time was provided through 
the Department of Health and Social Services: Health Planning and 
Systems Development's Alaska Office of Rural Health (HRSA #H95RH00135), 
State Planning Grant (HRSA #PO9HSO5505), Primary Care Cooperative 
Agreement (HRSA #U68CSO0157), and Rural Hospital Flexibility Program 
(HRSA #H54RH00014).
    The Task Force members acknowledge the resources that were provided 
by our own organizations. Our organizations have supported our time, 
travel and related in-kind resources for the project.

    (Cover photo: Foreground, Andrew Janssen, M.D., a 2005 graduate of 
the Alaska Family Medicine Residency Program, examines 6-month-old 
Cooper Baines at the Providence Family Medicine Center in Anchorage, 
Alaska. Paul W. Davis, M.D., is shown in background. Photo by Greg 
Martin, 2005, courtesy of Providence Family Medicine Center.)
      Securing an Adequate Number of Physicians for Alaska's Needs
            report of the alaska physician supply task force
    (Prepared for Mark Hamilton, President, University of Alaska and 
Karleen Jackson, Ph.D., Commissioner, Alaska Department of Health & 
Social Services August 2006)

                            TABLE OF CONTENTS
                                     Executive Summary.....        76
I..................................  Overview: The                 80
                                      Physician Supply Task
                                      Force Approach.
II.................................  Background: State and         81
                                      National Trends in
                                      Understanding
                                      Physician Supply and
                                      Demand.
III................................  The Alaska Story:             82
                                      Historical and
                                      Current Information
                                      on Physician Supply.
                                     A. Emerging Trends and
                                      Issues Related to
                                      Physician Supply.
                                     B. Forecasting the
                                      Need for Physicians
                                      in the Next Two
                                      Decades.
                                     C. Reasons for Taking
                                      Action to Assure an
                                      Adequate Physician
                                      Supply.
IV.................................  Findings and Methods          88
                                      for Forecasting
                                      Supply and Demand to
                                      2025 in Alaska.
                                     A. Demographic Profile
                                      of Alaska through
                                      2025.
                                     B. Projected Demand
                                      and Supply of
                                      Physicians through
                                      2025.
V..................................  Overview of Alaska's         102
                                      Current Health Care
                                      Workforce Development
                                      and Training
                                      Activities.
                                     A. Medical School
                                      Opportunities for
                                      Alaskans.
                                     B. Graduate Medical
                                      Education in Alaska--
                                      the Alaska Family
                                      Medicine Residency.
                                     C. State, Federal and
                                      Tribal Efforts to
                                      Support Health Care
                                      Workforce Development.
                                     D. Lessons from Other
                                      States and from
                                      National Studies.
VI.................................  Closing the Gap:             111
                                      Strategies for
                                      ``Growing Our Own''--
                                      Training, Recruiting,
                                      and Retaining
                                      Physicians for Alaska.
                                     A. Context and Process
                                      for Selection of
                                      Strategy
                                      Recommendations.
                                     B. Goals and Strategy
                                      Recommendations
                                       Goal 1. Increase the
                                      in-state production
                                      of physicians by
                                      increasing the number
                                      and viability of
                                      medical school and
                                      residency positions
                                      in Alaska and for
                                      Alaskans.
                                       Goal 2. Increase the
                                      recruitment of
                                      physicians to Alaska
                                      by assessing needs
                                      and coordinating
                                      recruitment efforts.
                                       Goal 3. Expand and
                                      support programs that
                                      prepare Alaskans for
                                      medical careers.
                                       Goal 4. Improve
                                      retention of
                                      physicians by
                                      improving the
                                      practice environment
                                      in Alaska.
VII................................  Areas that Warrant           129
                                      Further Consideration.
VIII...............................  Appendices............       129
                                     A. Data Details.
                                       1. Matriculants in
                                      Medical Schools by
                                      State.
                                       2. Specialty
                                      Distribution
                                      Comparison (2004)
                                      Alaska and US.
                                     B. Strategies
                                      Preferences
                                      Scoresheet.
                                     C. Physician Study
                                      Annotated Reference
                                      List.
                                     D. Resource List......
                                     E. Individual
                                      Contributors, Persons
                                      Consulted,
                                      Commenters,
                                      Reviewers, and
                                      Persons who Attended
                                      Task Force Meetings.
                                     F. Acronym List.......



                             LIST OF FIGURES
Figure A.                            Gain in Alaskan               78
                                      Physicians.
Figure 1.                            A First Look at               83
                                      Physician Count in
                                      Alaska.
Figure 2.                            Distribution of Alaska        84
                                      Physicians by City
                                      and Percent in
                                      Primary Care.
Figure 3.                            Change from Prior Year        85
                                      in Total Physicians,
                                      by Practice Type.
Figure 4.                            New Licensees Annually        85
                                      1996-2005 by Type.
Figure 5.                            A Linear Growth               86
                                      Scenario for
                                      Physician Supply.
Figure 6.                            Population Projection         89
                                      for Alaskans over Age
                                      65.
Figure 7.                            Alaska Population             90
                                      Projection by Age and
                                      Male/Female, 2024.
Figure 8.                            Active Physicians by          92
                                      Degree Type.
Figure 9.                            Alaska's National             93
                                      Ranking in MDs per
                                      1000 Residents.
Figure 10.                           Physicians,                   93
                                      Podiatrists,
                                      Physician Assistants,
                                      and Paramedics.
Figure 11.                           Alaska Physicians' Age        94
                                      Distribution.
Figure 12.                           U.S. Physicians' Age          94
                                      Distribution.
Figure 13.                           Age Distribution of           95
                                      Physicians (MDs and
                                      DOs) in Alaska.
Figure 14.                           Age Distribution of           95
                                      Physician's
                                      Assistants in Alaska.
Figure 15.                           Age Distribution of           96
                                      Advanced Nurse
                                      Practitioners in
                                      Alaska.
Figure 16.                           Age at Expiration of          96
                                      License.
Figure 17.                           Age of 1998 Cohort            97
                                      ``Stayers'' and
                                      ``Leavers''.
Figure 18.                           Age at Expiration of          97
                                      License of Non-
                                      Current Physicians.
Figure 19.                           Age of Current Active         98
                                      AK Physicians.
Figure 20.                           Count of Current,             98
                                      Active AK Physicians
                                      by Length of Service.
Figure 21.                           Alaska Mid-levels by          99
                                      Type and Year
                                      Licensed as of
                                      January 1, 2006.
Figure 22.                           MDs and DOs by Year           99
                                      Licensed.
Figure 23.                           Alaska 2004 Patient          100
                                      Care Physicians (MDs)
                                      by Specialty.
Figure 24.                           Physicians by Practice       100
                                      Type in Alaska.
Figure 25.                           Physician Need               101
                                      Forecasts for 2025.
Figure 26.                           Gain in Alaskan              102
                                      Physicians (MDs):
                                      Static Doctor to
                                      Population Ratio vs.
                                      Desired Growth.
Figure 27.                           WWAMI Outcomes Flow          103
                                      Chart.


                           Executive Summary

    The Alaska Physician Supply Task Force was commissioned in January 
2006 by the President of the University of Alaska and the Commissioner 
of the Department of Health and Social Services to address two 
questions:

    1. What is the current and future need for physicians in Alaska?
    2. What strategies have been used and could be used in meeting the 
need for physicians in Alaska? Strategies of interest are:

     programs to attract and prepare students for health 
careers;
     medical school opportunities;
     graduate medical education; and
     recruitment and retention of physicians.

    The Task Force has met regularly and drawn on a wide variety of 
sources of information, including public participation. The consensus 
of the Task Force is that this report represents the best answer 
possible to these questions, within the constraints of time and budget, 
and the inherent uncertainties of available data and predictions. The 
major conclusions and reasoning of the group are summarized here, and 
detailed in the body of the report.
    Alaska has a shortage of physicians.\1\ Although not at crisis 
levels, the shortage is affecting access to care throughout the State, 
and increasing cost to hospitals and health care organizations. Up to 
16 percent of rural physician positions in Alaska were vacant in 2004. 
Patients with Medicare are having difficulty finding a primary care 
physician. Several important specialties are in serious shortage in 
Alaska.
---------------------------------------------------------------------------
    \1\ Unless otherwise specified, ``physician'' in this report means 
medical doctor as well as doctor of osteopathy.
---------------------------------------------------------------------------
    The shortage is very likely to worsen over the next 20 years as the 
State's population increases and ages. Physician supply nationwide is 
entering a period of shortage, according to the best current 
predictions. Physicians in Alaska are aging and one-third may be 
retiring in the next 10-15 years. The new generation of physicians 
wants a more balanced life, meaning fewer hours on duty and more 
predictable schedules. These trends mean that more physicians will be 
required to serve the same population. Technology and scientific 
advances have increased the amount of medical care available, adding to 
the need for physicians, as the patients expect more care than 
previously.
    As the national supply of physicians shrinks, recruitment will 
become more competitive. Alaska's traditional system of recruiting 
physicians from Federal assignment in the military and Indian Health 
Service is much less effective with changes in these systems. Although 
Alaska has two very successful programs to produce its own physicians, 
the Alaska WWAMI medical school program and the Alaska Family Medicine 
Residency, Alaska is far behind the other States in production 
capacity. These two programs, even if expanded, cannot meet the need.
    The current trend in physician growth in Alaska is inadequate to 
keep up with basic population growth and to correct the current 
deficit. Unless changes are made in the systems used to increase 
physician numbers, the deficit will worsen, with significant 
consequences for access and quality of care for Alaskans, as well as 
increased cost for health care delivery systems.
    The time frames to increase physician supply are long; it takes 
from 7 to 13 years from entry into medical school to entry into 
practice. The time it takes to develop new or expanded programs adds to 
this delay. It is important to act quickly to begin the programs that 
will yield more physicians in the next two decades. Delay will only add 
to the cost and worsen the deficit to recoup.
    Responses to this problem involve preparing and attracting Alaskan 
youth so they can enter medical careers, improving recruitment of 
physicians to practice in Alaska, and retaining the physicians who 
currently practice here. The Task Force recommends specific strategies 
and action steps to achieve four goals related to assuring an adequate 
supply of physicians to meet Alaska's need.

    Goals:

    1. Increase the in-state production of physicians by increasing the 
number and viability of medical school and residency positions in 
Alaska and for Alaskans.
    2. Increase the recruitment of physicians to Alaska by assessing 
needs and coordinating recruitment efforts.
    3. Expand and support programs that prepare Alaskans for medical 
careers.
    4. Increase retention of physicians by improving the practice 
environment in Alaska.
    The following sections summarize the findings of the Alaska 
Physician Supply Task Force supporting these goals. The body of the 
report contains the full discussion of the goals, strategy 
recommendations, and the rationale behind the recommendations.
    Assessment of need. The Task Force estimates that Alaska has a 
shortage of 375 physicians, based on the conclusion that Alaska should 
have 110 percent of the current national average physician-to-
population ratio. In order to correct the deficit and reach an adequate 
supply of physicians by 2025, Alaska needs to add a net of 59 
physicians per year, starting immediately. Alaska currently gains 78 
physicians per year but loses 40 physicians yearly for various reasons. 
In order to improve its doctor to population ratio, and assure having 
an adequate supply in 20 years, the current net gain of 38 physicians 
per year will need to increase to 59 per year, more than a 50 percent 
increase. If the loss each year is greater than the recent average of 
40 per year, Alaska will need more than 90 physicians to enter practice 
in Alaska each year.
    These conclusions are supported by the following findings.

    Finding 1. The ratio of physicians to population in Alaska is below 
the national average at 2.05 MDs per 1,000 population vs. 2.38 MDs per 
1000 population in the United States.
    Finding 2. Alaska should have 10 percent more physicians per 
population than the national average because Alaska's rural nature, 
great distances and severe weather result in structural inefficiencies 
of the health care system. Alaskan physicians' administrative and 
supervisory responsibilities in addition to patient care contribute to 
the need for more physicians to provide patient care services.
    Finding 3. Competition for physicians will intensify since the 
entire Nation is expected to experience a shortage of physicians, 
associated with the aging of the population and an inadequate 
production of physicians.
    Finding 4. Retirement and practice reductions of aging physicians 
in Alaska and elsewhere, as well as changing preferences of physicians 
for more limited work hours, add to the need for more physicians.
    Finding 5. Alaska has and should maintain a higher ratio of mid-
level providers (advanced nurse practitioners and physician assistants) 
to physicians than the national average, in order to make it feasible 
to provide high quality and timely care to the population. Without 
these providers the need for physicians would be even higher.
    Finding 6. Shortages are most apparent in internal medicine, 
medical subspecialties and psychiatry. It is important to evaluate the 
need for specialty types and distribution throughout Alaska, in order 
to plan for physician recruitment.

    Over the next 20 years, nearly twice as many ``physicians in 
practice'' will be needed--about 1,100 more than the current 1,347 MDs 
in patient care--to meet expected demand as the State's elderly 
population triples and as medical practice patterns change. This 
projection assumes that doctors of osteopathy, advanced nurse 
practitioners and physician assistants will continue to increase 
proportionately over time.



    Basis for strategies for meeting the need for physicians for 
Alaska's health care system. After investigating the supply and need 
for physicians and reaching Findings 1-6, the Task Force shifted its 
focus to investigating strategies for meeting the need. The Task Force 
drew on the knowledge of in-state professionals and educators, and of 
national experts, to identify lessons and information that form the 
basis for recommendations for action, as well as for further 
investigation and monitoring. The Task Force's selection of strategies 
is based on the following findings.
    Finding 7. Alaska is one of six States without an independent in-
state medical school. Alaska funds 10 state-supported ``seats'' at the 
regional WWAMI medical school, administratively centered at the 
University of Washington School of Medicine. This number (10 seats) 
represents fewer seats per capita than all but five of the 50 States.
    Finding 8. Residency programs are one of the most effective ways to 
produce physicians for a State or community. Alaska has only one in-
state residency, the AFMR, which places 70 percent of its graduates in 
Alaska. Maintaining and expanding residency opportunities will be 
critical in augmenting Alaska's physician numbers.
    Finding 9. Over the last 10 years, an increasing number of Alaskan 
students have applied to medical schools; the average number of 
applicants has been 65. In 2005, 29 of 73 applicants were admitted into 
medical school. Ten per year attend WWAMI and the remainder attends 
medical schools without State support from Alaska. Since 1996, only 
WWAMI has had Alaska-supported seats. Prior to 1996, Alaska supported 
programs for medical and osteopathic students through the WICHE program 
and student loans.
    Finding 10. Recruitment for physicians is facilitated by the 
availability of loan repayment programs such as the IHS and NHSC loan 
repayment programs. Service obligations related to student loans have 
historically accounted for some recruitment and should be explored.
    Finding 11. There are several initiatives to increase interest in 
medical careers among Alaskans, including efforts by the tribal health 
care system, hospitals, the University of Alaska's newly funded Area 
Health Education Center (AHEC) and the UA Scholars Awards, school 
system initiatives for improvement of math and science programs, and 
programs that encourage students to go into health careers. 
Collectively, these initiatives generate qualified applicants to 
medical schools, but too few applicants matriculate to replenish 
Alaska's shortage, and there is inadequate diversity.
    Finding 12. Medical practice environments in Alaska have positive 
and negative aspects that affect the recruitment and retention of 
physicians.
    Finding 13. Surveys of providers (physicians and mid-levels) by the 
AMA and many States have provided data on practice characteristics, 
preferences, and retirement plans.
    Finding 14. Workforce development activities exist in multiple 
locations including the tribally managed system, private sector, and 
various State and Federal agencies. However existing programs are not 
monitoring or analyzing specialty distribution or needs, changing roles 
of mid-level providers, or potential impact of electronic health 
records on all providers. Coordination of the efforts, and research and 
analysis of relevant trends, should inform policy.
    In view of these findings, the relevant literature, and the 
experience of other States, the Task Force developed the following 
goals and strategies to respond to the physician shortage. The 
strategies are chosen because of their likely effectiveness, cost-to-
benefit advantages, and achievability. Each strategy is discussed with 
respect to the time frame in which it will be effective, and the 
average expected cost to the State to produce each practicing 
physician, where such information is reasonably accessible. The listing 
below gives a brief identification of each goal and strategy. Full 
discussion of the strategies is included in the body of the report.

                Goals and Strategies for Securing an Adequate Physician Supply for Alaska's Needs

              Major goal                       Strategy           Timeline for impact         Estimated cost

1. Increase the in-state production    A. Increase the number   Medium.................  $250,000 per practicing
 of physicians by increasing the        of state-subsidized                               physician.
 number and viability of medical        medical school
 school and residency positions in      positions (WWAMI) from
 Alaska and for Alaskans.               10 to 30 per year.
                                       B. Ensure financial      Short..................  $60,000 per practicing
                                        viability of the AFMR                             physician.
                                        through State support
                                        including Medicaid
                                        support.
                                       C. Increase the number   Short..................  $100,000 per year plus
                                        of residency positions                            $30,000 for planning
                                        in Alaska, both in                                in year 1 & 2.
                                        family medicine and
                                        appropriate additional
                                        specialties.
                                       D. Assist Alaskan        Medium.................  (i) $550,000 per
                                        students to attend                                practicing physician
                                        medical school by: (i)                            for WICHE;
                                        reactivating and                                 (ii) cost unknown at
                                        funding the use of the                            time of PSTF report.
                                        WICHE Professional
                                        Student Exchange
                                        Program with a service
                                        obligation attached,
                                        and (ii) evaluating
                                        the possibility of
                                        seats for Alaskans in
                                        the planned
                                        osteopathic school at
                                        the Pacific Northwest
                                        University of the
                                        Health Science.
                                       E. Investigate           Medium.................  Unknown at time of PSTF
                                        mechanisms for                                    Report.
                                        increasing Alaska-
                                        based experiences and
                                        education for WWAMI
                                        Students.
                                       F. Maximize Medicare     Short..................  Zero cost to the State.
                                        payments to teaching
                                        hospitals in Alaska.
                                       G. Empanel a group to    Long...................  Undetermined at time of
                                        assess medical                                    PSTF Report.
                                        education in Alaska,
                                        including the
                                        viability of
                                        establishing an Alaska-
                                        based medical school.
2. Increase the recruitment of         A. Create a Medical      Short..................  $250,000 per year.
 physicians to Alaska by assessing      Provider Workforce
 needs and coordinating recruitment     Assessment Office to
 efforts.                               monitor physician
                                        supply and facilitate
                                        physician recruitment
                                        efforts.
                                       B. Research and test a   Short..................  $65,000 per physician.
                                        physician relocation
                                        incentive payment
                                        program.
                                       C. Expand loan           Short..................  Undetermined--need to
                                        repayment assistance                              consult with other
                                        programs and funding                              States.
                                        for physicians
                                        practicing in Alaska.
3. Expand and support programs that    A. Expand and            Medium.................  Up to $1,000,000 per
 prepare Alaskans for medical careers.  coordinate programs                               year.
                                        that prepare Alaskans
                                        for careers in
                                        medicine.
4. Increase retention of physicians    A. Develop a physician   Short..................  $100,000 to develop
 by improving the practice              practice environment                              index; $20,000
 environment in Alaska.                 index for Alaska.                                 annually to update.
                                       B. Develop tools that    Short..................  $50,000 per year.
                                        promote community-
                                        based approaches to
                                        physician recruitment
                                        and retention.
                                       C. Support Federal tax   Short..................  Zero cost to the State.
                                        credit legislation
                                        Initiative for
                                        physicians that meet
                                        frontier practice
                                        requirements.


    Adoption of these strategies will depend on further analysis of 
resources and a balancing of effectiveness and achievability. 
Strategies to recruit and retain physicians promise the earliest 
positive results, but probably have a relatively low benefit ceiling, 
in that the maximum number of physicians achievable by those strategies 
will soon be reached. The strategies likely to produce significant 
numbers of doctors over time are those designed to train physicians in 
Alaska, i.e. medical school and residency programs, but the time to 
realize the benefit in most cases is longer.
    Implementation strategy--next steps for key policymakers. The 
shortage of physicians and other health care providers creates one of 
Alaska's most challenging public health and higher education issues. To 
ensure the work of the Task Force is carried forward, it is recommended 
that the President and Commissioner establish permanent structures to 
implement these recommendations. One component of this action would be 
creation of a Medical Provider Workforce Assessment Office (Strategy 
2A).

     SECTION I. OVERVIEW: THE PHYSICIAN SUPPLY TASK FORCE APPROACH

    In December 2005, University of Alaska President Mark Hamilton and 
Alaska Department of Health and Social Services Commissioner Karleen 
Jackson appointed the Alaska Physician Supply Task Force to answer two 
primary questions.
    1. What is the current and future need for physicians in Alaska?
    2. What strategies have been used and could be used in meeting the 
need for physicians in Alaska? Strategies of interest are:

     programs to attract and prepare students for health 
careers;
     medical school opportunities;
     graduate medical education; and
     recruitment and retention of physicians.

    The Task Force as a group of experts, was charged by President 
Hamilton and Commissioner Jackson to recommend the most appropriate and 
effective response to a persistent physician supply shortage within 
Alaska, spiraling costs of recruitment, effects on Alaska of projected 
national shortfalls, and the need to develop a workable plan to meet 
physician workforce needs throughout the State from now through 2025.
    The Physician Supply Task Force worked through two phases:

     Phase I (December 2005--March 2006); and
     Phase II (February 2006--August 2006).

    During Phase I the Task Force identified and analyzed the data 
regarding medical provider counts for the State and compared it to data 
from other States and nationwide. This phase assisted in evaluating the 
scope of the problem. The Task Force also considered the expertise of 
its members, and the knowledge of other advisors and consultants from 
Alaska regarding State programs for encouraging students to enter 
health careers, for subsidizing or contributing to training programs, 
and for supporting students through scholarships and loans.
    In Phase II the Task Force chose to focus on developing short, 
medium and long term recommendations to meet physician supply 
requirements in Alaska through 2025. They also considered the impact of 
their recommendations on training, recruitment and retention of 
physicians. The Task Force prioritized and grouped strategies based on 
reports from other States, Alaska's experience, and expected 
feasibility and effectiveness in the current environment.
    Task Force members chose to operate under a consensus model related 
to findings and strategies. During their work, the Task Force members 
used scoring methodologies, expert testimony, and staff consultation to 
reach their findings and recommendations.
    Task Force members and invited guests shared their expertise 
regarding training of physicians. Presentations included those from 
WWAMI (Washington, Wyoming, Alaska, Montana and Idaho) regional medical 
school based within the University of Washington School of Medicine, 
and the AFMR in Anchorage.
    Staff contacted experts from the Center for Health Workforce 
Studies at the University of Washington, the North Carolina Rural 
Health Research Program and Program on Health Policy Analysis at the 
University of North Carolina at Chapel Hill, the Utah Medical Education 
Council, and other State and national programs. Reports of the several 
Centers for Health Workforce Studies, U.S. Bureau of Labor Statistics, 
Health Resources and Services Administration, and other States that 
have addressed physician workforce issues were studied. A review of the 
literature focused on assessing and forecasting physician supply and 
demand at State and national levels, and on strategies being used to 
increase physician supply. Current status of recruitment and retention 
efforts and programs such as student loan programs and loan forgiveness 
options that have been used in Alaska and elsewhere were reviewed.
    The Task Force met monthly from December 2005 to August 2006. 
Public comment was encouraged throughout the process. Meeting 
announcements were publicly posted and time was set aside at each 
meeting for public comment. In addition to monthly meetings, a longer 
meeting was held March 27, 2006 to discuss, enhance and prioritize 
recommendations. This meeting included a broad group including 
stakeholders, members of the public, and Task Force and project staff. 
The draft report was distributed for review and comment to over ninety 
individuals who have expertise and interest in this issue.
    The next three sections of the report describe current information 
from diverse sources in Alaska about trends and issues related to 
physician supply and recruitment, distribution, and factors in Alaska 
that may need to be considered in forecasting need, followed by more 
detailed information about the data that can be used to forecast 
supply. This material provides the basis for the ``findings'' relating 
to the first question asked of the Task Force: ``What is the current 
and future need for physicians in Alaska?'' Section V provides the 
information gathered to answer the second question: ``What strategies 
have been used and could be used in meeting the need for physicians in 
Alaska?'' Section VI contains detailed discussions of the goals and 
strategies proposed by the Task Force. Section VII includes a listing 
of areas that warrant further consideration, in that they were 
discussed by the Task Force but not researched or thoroughly documented 
in this report.

  SECTION II. BACKGROUND: STATE AND NATIONAL TRENDS IN UNDERSTANDING 
                      PHYSICIAN SUPPLY AND DEMAND

    Alaska's health care organizations are facing major difficulties 
and great expense in recruiting and retaining physicians. Both private 
and public health care agencies have pointed out to State policymakers 
and the University of Alaska that they are spending increasing time and 
money seeking doctors to staff their services. A looming national 
shortage is already affecting Alaska's service delivery. Indeed, a 
review of the literature finds that the United States is experiencing a 
shortage of physicians which is predicted to rise due to the needs of 
an aging population, increases in physician retirement, restricted 
production of new physicians nationally, insufficient GME training 
capacity, and changes in practice patterns. By 2020, a deficit of 
96,000 to 200,000 doctors is anticipated nationwide (Cooper, 2004).
    History of national physician shortage. The current shortage can be 
traced back to a response to a series of influential reports published 
between 1981 and the mid 1990s, which inaccurately predicted that the 
Nation would experience a large surplus of physicians by 2000. The 
reports were written by national advisory groups, including the 
Graduate Medical Education National Advisory Committee (GMENAC) and the 
Council on Graduate Medical Education (COGME), that were tasked with 
making policy recommendations regarding the adequacy of the supply and 
distribution of physicians (Cooper, 2004).\2\ Their information was 
driven by an opinion that health maintenance organizations (HMOs) would 
decrease physician demand by promoting preventive care and reducing 
tests and procedures.
---------------------------------------------------------------------------
    \2\ Richard Cooper MD has written extensively on the evolution and 
effect of these positions and reports. See Annals of Intern Med 141, 
2004, p. 705.
---------------------------------------------------------------------------
    Subsequent to these reports, allopathic medical schools around the 
country voluntarily capped the production of new physicians. However, 
residency programs and osteopathic medical schools did not heed the 
reports' warnings and continued to increase the number of physicians in 
the residency programs and osteopathic schools. Between 1980 and 1990, 
the number of residents training in the U.S. increased by nearly 50 
percent from 62,000 to 92,000 residents (Salsberg and Forte, 2002).
    As concerns about physician oversupply escalated, COGME recommended 
in 1996 that the number of physicians entering residency programs be 
reduced from 140 percent to 110 percent of the baseline (the number of 
medical school graduates in 1993) and that the percentage of 
specialists to generalists be evenly split, 50/50. Finally, in 1997, 
Congress placed a cap on the number of available residency slots that 
would be supported by the Medicare program. This significant economic 
disincentive effectively capped GME in the United States.
    It was not long, however, before the wisdom of these 
recommendations and subsequent restrictive policies was questioned. 
Physician oversupply did not occur. Instead, reports of shortages for 
both general practitioners and specialists surfaced (Schubert et al., 
2003; Miller et al., 2001). It appeared that a significant shortage 
rather than oversupply was looming on the horizon. As a result, COGME 
reviewed physician workforce projections again, predicted that 
physician demand would significantly outpace supply, and recommended 
that medical schools expand the number of graduates by 3,000 per year 
by 2015. In 2005, the executive council of the Association of American 
Medical Colleges (AAMC) called for a 15 percent increase in medical 
school enrollment, and in June, 2006, the AAMC called for a 30 percent 
increase in medical school slots by 2020 in order to meet future 
physician needs (AAMC, 2006).
    Economic impact of physician supply. The supply of physicians 
impacts State economies in many ways. It is an economic driver and 
affects a State's ability to draw businesses as well as skilled, 
competitive employees. Businesses and potential staff are more likely 
to locate in communities that assure the availability of quality 
medical care services. Dollars spent on health care are recycled in the 
economy to the extent that labor, supplies and services are acquired 
locally. In 2004, personal health care expenditures represented 13.4 
percent of the gross national product. It represented 12.3 percent (1.6 
billion dollars) of Alaska's gross State product.
(www.cms.hhs.gov/NationalHealthExpendData/downloads/
nhestatesummary2004.pdf)
    In Alaska, business concern about adequacy of health services in 
the State has been expressed by the Commonwealth North study of primary 
care and the subsequent initiatives in 2005-2006 of the Alaska Health 
Care Roundtable to examine costs of health care and health insurance, 
and availability of options for employers and employees (Commonwealth 
North, 2005). The University of Alaska, Institute for Social and 
Economic Research recently produced an analysis of costs of health care 
in Alaska (UA ISER, 2006). The Alaska State Medical Association (ASMA), 
the Alaska State Hospital and Nursing Home Association (ASHNA), the 
University of Alaska, and the State's largest health care organizations 
(Providence Health Systems and the Alaska Native Tribal Health 
Consortium (ANTHC)) have all focused on the looming shortage and have 
begun to take steps to improve practice environments.

 SECTION III. THE ALASKA STORY: HISTORICAL AND CURRENT INFORMATION ON 
                            PHYSICIAN SUPPLY

A. Emerging Trends and Issues Related to Physician Supply

    In 2004, Alaska's physician-to-population ratio ranked 17th lowest 
in the Nation--i.e., in the lower third of all States.\3\ \4\ About 
1,350 allopathic physicians (MDs) work in patient care and about 100 
osteopathic physicians (DOs) are in practice in Alaska. Alaska has 205 
physicians (MDs and DOs) providing patient care per 100,000 population, 
compared with 238 for the United States (AMA, 2006).
---------------------------------------------------------------------------
    \3\Allopathic medicine is conventional medicine. The term was 
coined in 1842 by C.F.S. Hahnemann to designate the usual practice of 
medicine as opposed to homeopathy. Doctors of osteopathy have completed 
a course of study equivalent to that of an MD and are licensed to 
practice medicine. They may prescribe medication and perform surgery, 
and they often use manipulation techniques similar to chiropractics or 
physical therapy.
    \4\ Chen et al., 2005 show Alaska in the middle of the range of 
States using the 2005 AMA master file, selecting ``clinically active'' 
physicians, but using a slightly lower population estimate than that 
used in this report. Kaiser Family Foundation ``statehealthfacts.org'' 
and the U.S. Statistical Abstract show rankings using counts of ``non-
Federal physicians'' only. Since these use population estimates that 
include the military and Alaska Native and American Indian populations 
who are served by the excluded physicians, the resulting rankings 
placing Alaska lower than 17th. These differences show the importance 
of understanding the definitions of the inputs and assumptions made in 
any presentation of similar data.
---------------------------------------------------------------------------
    A recent survey of ``vacant'' slots for Alaska physicians indicated 
a 16 percent vacancy rate outside of Anchorage. Although doctors of 
osteopathy, advanced nurse practitioners and physician assistants are 
available in Alaska to provide medical care, the current deficit in 
allopathic physicians is being felt by the profession and by health 
care organizations as they seek to staff their services. The current 
``shortage'' using the national physician to population ratio as the 
norm can be defined as equal to 218 fewer physicians currently in 
patient care in Alaska than if the U.S. ratio applied.

           Figure 1. A First Look at Physician Count in Alaska
------------------------------------------------------------------------
                                                               MDs Per
                    Measure                       MD Count       1000
                                                  (Alaska)    Population
------------------------------------------------------------------------
2004 actual physicians in patient care (per           1,347         2.05
 AMA Master File).............................
2004 ``expected'' at national average.........        1,565         2.38
``Deficit'' from national norm................          218          ---
Percent ``deficit''...........................   14 percent          ---
Outside Anchorage Vacancy Rate (AFMR survey      16 percent          ---
 2004)........................................
------------------------------------------------------------------------

    Alaska's specialists are located mainly in the largest urban 
centers. Anchorage, which serves as the specialty center for the State 
as a whole, has approximately 464 specialists and 323 ``primary care'' 
physicians (family practitioners, internists, pediatricians and 
obstetrician-gynecologists).\5\ Anecdotal information suggests that 
Anchorage lacks sufficient primary care physicians, especially 
internists, to meet the population's needs. The Task Force identified 
this as one area needing further study.
---------------------------------------------------------------------------
    \5\ DHSS Health Planning and Systems Development analysis of 
occupational licensing and ASMA data (merged).
---------------------------------------------------------------------------
    Rural areas are served by primary care physicians who are 
headquartered mostly in regional centers. In rural census areas and 
boroughs there are fewer physicians per population than in the urban 
areas. Telehealth development in Alaska has improved the ability of 
physicians in regional centers to supervise and consult with mid-level 
providers in sub-regional and village clinics, and with community 
health aides and practitioners in the Alaska tribal health care system. 
Similarly, the telehealth options have enabled primary care physicians 
in rural areas to consult with specialists in Anchorage and in some 
cases out-of-state experts. Within both the tribal system and the 
private sector, there are still itinerant specialists (both in-state 
and out-of-state residents) who visit rural communities or regional 
centers to hold specialty clinics or see selected patients. The 
regionalized structure provides for a level of access to care that 
could not be supported economically by individual communities.
    Small communities typically have a difficult time supporting 
physician services, in Alaska as well as elsewhere. Communities may be 
``too small, too poor, or too disadvantaged in geographic competition 
to support sufficient viable physician practices,'' and may not have 
the ``economic wherewithal to support more physician practices even 
though physician to population ratios may indicate they are needed'' 
(Wright et al., 2001). Seasonal fluctuations related to tourism, 
fishing season, and weather-dependent construction are often an 
additional challenge to small Alaskan communities. Staffing levels 
which may be appropriate on average through a year may be inadequate 
for peak periods, which can also ``burn out'' an isolated, solo 
provider. National trends are away from solo practices. Alaska is also 
experiencing trends toward hospital hires of physicians, reliance on 
emergency medicine specialists to staff emergency rooms, and clinics 
having a combination of physician and mid-level (advanced nurse 
practitioner and physician assistants) staffing.
    Distribution of Alaska physicians. The Task Force has recognized 
that there are inherent inefficiencies related to the vast distances 
that must be covered by patients and providers, uncertainties of 
weather and transportation options, and the inherent challenges of 
living and working in remote and geographically isolated conditions. 
These factors were considered in Task Force deliberations about targets 
for physician supply. Figure 2 shows the distribution of physicians and 
population for areas with five or more physicians.

                 Figure 2. Distribution of Alaska Physicians by City and Percent in Primary Care
----------------------------------------------------------------------------------------------------------------
                                                                                         Physicians
                                                                             State's    in the City     Alaska
                                                                  Total     Physicians   who are in   Population
              City/Area of Physicians in Alaska                Physicians  in the City    Primary    in the City/
                                                                            (percent)       Care         Area
                                                                                         (percent)    (percent)
----------------------------------------------------------------------------------------------------------------
Anchorage Total..............................................         787           60           41           42
Fairbanks Total..............................................         151           11           51           13
Wasilla, Palmer, Willow......................................          83            6           49           11
Juneau/Auke Bay..............................................          70            5           46            5
Soldotna & Kenai.............................................          46            3           52            7
Sitka........................................................          31            2           68            1
Ketchikan....................................................          27            2           56            2
Kodiak.......................................................          23            2           74            2
Homer........................................................          18            1           44            1
Bethel.......................................................          15            1          100            4
Dillingham...................................................           8            1          100            1
Nome.........................................................           8            1           88            1
Kotzebue.....................................................           6            0          100            1
Seward.......................................................           6            0           83            1
Barrow.......................................................           5            0           80            1
Balance of State.............................................          32            2                         7
Total with known spec'ty.....................................       1,316          100
----------------------------------------------------------------------------------------------------------------
Note: Primary Care physicians include family practitioners, internists, pediatricians and obstetrician-
  gynecologists.

Source: Merged ASMA Directory listing and Alaska Occupational Licensing 
database (AKDHSS HPSD 2006).

    It should be noted that Anchorage has a higher percent of the 
State's physicians for their population because it is Alaska's largest 
city and is a specialty referral center. Many patients come to 
Anchorage from other parts of the State for medical care. Fairbanks, 
Juneau, Sitka, Kenai/Soldotna and Ketchikan each have several 
specialties represented among the physicians.
    Fluctuations in physician supply. The Task Force has examined the 
data on licensing of new physicians in the State and loss of resident 
physicians, measured by expiration of licenses or moves out of state. 
Losses are attributable to retirement, migration, and mortality. 
Detailed findings are described below in analysis of trends.
    The ASMA Directory showed a drop in listed physicians in 2004, 
prompting discussion and concern. (See Figure 3.) The decline was 
explained by a sudden drop in the listed members of the military 
services, related to the base closings and deployments to Iraq.


    A critical finding of the Task Force has been that since 1998 new 
MD licenses have averaged 78 per year, and on average 40 licenses have 
expired each year.\6\
---------------------------------------------------------------------------
    \6\ The number of both new and expired licenses has varied from 
year to year (see Figure 4), with new licensees ranging from a high of 
108 in 2002 to 61 in 2004. The timing of losses to the State's 
physician supply is more difficult to pinpoint than entry since out-
movers or retirees may not report changes in address or activity to the 
Alaska State Medical Board immediately. When they do report, the 
information is entered as ``comments'' with the status change noted, 
but the details about the date and specific reasons for change would 
need to be analyzed through a study of the Board's detailed file 
``comment'' entries. These are not part of the publicly available 
electronic files.
---------------------------------------------------------------------------
    Physician recruitment in Alaska appears to have declined since a 
high point in 2002 (there were 108 new MD licenses for physicians with 
Alaskan addresses in 2002 and only 73 in 2005). Licenses of new DOs 
have been increasing (from six in 1998 to nine in 2005), and numbers of 
advanced nurse practitioners and physician assistants being licensed 
annually have increased as well (see Figure 4).

           Figure 4. New Licensees Annually 1996-2005 by Type
    (Active Licenses, Alaska Addresses, in practice in January 2006)
------------------------------------------------------------------------
                                  MD         DO         NP         PA
------------------------------------------------------------------------
1996........................         68          1         18         15
1997........................         65          7         26         14
1998........................         86          6         28         19
1999........................         92          8         18          9
2000........................         67          5         32         13
2001........................         71          4         25         11
2002........................        108          8         25         22
2003........................         90          7         30         12
2004........................         61         11         32         39
2005........................         73          9         30         29
------------------------------------------------------------------------
Note: From comparative data for 1998 it is evident that some of the
  earlier licensees have left Alaska or left practice. To do a precise
  and complete analysis would require analysis of the ``comments'' files
  kept by Occupational Licensing, which was not feasible during this
  project.

Source: Alaska Division of Occupational Licensure

    If the number of Alaska physicians retiring increases, or out-
migration or ``lapsing'' of licenses increases, Alaska could lose more 
physicians than it gains, adding to the burden of boosting the current 
supply. The Status of Recruitment Resources and Strategies report 
indicated rapidly escalating costs of recruitment for rural physicians, 
and increased dependence on locum tenens physicians to handle patient 
care (DHSS/ACRH, 2006).
    Two trends could intensify the need for new physician recruits in 
Alaska. One trend is that the physician workforce is aging, so the rate 
of retirement is likely to increase, thus increasing the loss of 
physicians. The second trend is the growing national shortage, which is 
already making recruitment to Alaska more difficult.

B. Forecasting the Need for Physicians in the next Two Decades

    According to the Task Force projections of need (elaborated in 
Section IV below), at this time Alaska needs a net gain of about 59 new 
physicians each year to offset the number of physicians who leave or 
retire. Annual losses are currently 40 per year, but are expected to 
increase as a higher proportion of physicians age and retire. One 
``linear'' scenario for replacing physicians as they leave practice, 
and building the total supply, is illustrated in Figure 5. A net gain 
of 59 physicians per year would be a 50 percent increase over the 
recent average net gain of 38 per year. This increment could be 
accomplished by increasing the number of new licensees to average 
between 100 and 105 per year.

                             Figure 5. A Linear Growth Scenario for Physician Supply
----------------------------------------------------------------------------------------------------------------
                  Year                        Projected Physicians in         Needed     Estimated   Recruitment
-----------------------------------------             Practice                Annual    Loss due to   Needed to
                                         ---------------------------------  Increment    Migration/    Achieve
                                                                          -------------  Retirement     Needed
                                            MDs in                                     -------------  Increment
                                           Practice  DOsActive    Total                             ------------

----------------------------------------------------------------------------------------------------------------
2004....................................      1,347        109      1,456          59           40           99
2005....................................      1,399        115      1,515          59           40           99
2006....................................      1,451        122      1,573          59           41          100
2007....................................      1,504        128      1,632          59           41          100
2008....................................      1,556        135      1,690          59           42          101
2009....................................      1,608        141      1,749          59           42          101
2010....................................      1,660        147      1,808          59           43          102
2011....................................      1,712        154      1,866          59           43          102
2012....................................      1,765        160      1,925          59           44          103
2013....................................      1,817        167      1,983          59           44          103
2014....................................      1,869        173      2,042          59           45          104
2015....................................      1,921        179      2,101          59           45          104
2016....................................      1,973        186      2,159          59           46          105
2017....................................      2,026        192      2,218          59           46          105
2018....................................      2,078        199      2,276          59           47          106
2019....................................      2,130        205      2,335          59           47          106
2020....................................      2,182        211      2,394          59           48          107
2021....................................      2,234        218      2,452          59           48          107
2022....................................      2,287        224      2,511          59           49          108
2023....................................      2,339        231      2,569          59           49          108
2024....................................      2,391        237      2,628          59           50          109
2025....................................      2,444        244      2,688          59           50          109
----------------------------------------------------------------------------------------------------------------

    More physicians are needed for the following reasons: to correct 
the current deficit, to keep up with population growth, to address 
increased demand and need associated with aging of the population, and 
to compensate for changing practice patterns that are resulting in less 
time available for patient care on the part of the physicians in 
practice. Nationally the practice pattern changes are adding to the 
need for higher numbers of physicians in practice per 1,000 population, 
even where the number of ``full time equivalents'' might be relatively 
stable (HRSA, 2005; Bureau of Labor Statistics, 2006). Such practice 
patterns include:

     physician preferences for salaried positions with fewer 
hours in patient care and ``on call'';
     reduced hours for older physicians (nationally it has been 
noted that older physicians reduce their average hours, whether by 
shortening office hours, reducing patient rosters, bringing on 
partners, or taking more vacations);
     more ``job sharing'' by physicians;
     longer office visits and/or more time devoted to group 
sessions with patients as part of efforts to improve clinical 
prevention counseling;
     more time devoted to consults and supervision and training 
of other health workers; and
     other changes that may improve productivity of the system 
as a whole but not increase patient care productivity of the physician 
workforce, itself.
    Alaska's rural physicians face additional challenges. Approximately 
75 percent of Alaskan communities are not connected by road to another 
community with a hospital. Geography and climate together limit 
transportation options for providers and patients. Health care services 
for the rural population have evolved with a regional model where 
physicians and hospitals are located mostly in regional centers. A 
number of mid-level providers work in sub-regional centers, generally 
the largest ``villages'' in their areas, or serve villages on an 
itinerant basis from the regional or sub-regional clinics. In most 
villages populated by Alaska Natives, a community health aide or 
practitioner serves immediate behavioral and physical health needs, 
referring patients to higher level providers or using telehealth 
consults as needed.
    These arrangements result in physicians serving more of their time 
in a consultative and oversight role than in typical settings in the 
Nation. In addition to such differences in practice responsibilities, 
rural physicians (almost all family practitioners rather than 
specialists) have to handle the entire spectrum of needs. They must 
often decide on and arrange for referrals to specialists located in 
distant cities. The poverty and hazardous occupations of Alaska's 
remote areas also contribute to high levels of need. These 
circumstances must be considered in determining a reasonable 
expectation for physician to population ratios.

C. Reasons for Taking Action to Assure an Adequate Physician Supply

    In Alaska as well as throughout the Nation, there are mounting 
concerns about patients facing dangerously long wait times even for 
primary care physicians. Wait times for specialty care doctors are even 
longer and reflect the emerging strain. A system unable to provide 
timely medical care is certain to have a deleterious impact on health 
outcomes and further erode long-term population health goals.

        Many patients, especially elderly patients on Medicare, are 
        having difficulty finding a primary care physician. Most 
        Internal Medicine physicians cannot afford to take on new 
        Medicare patients because Medicare payment rates are so low. In 
        addition, salaries of sub-specialists are much higher and 
        discourage physicians from going into Internal Medicine. 
        Generalists are being starved out.
      --Richard Neubauer, MD, Internal Medicine, Anchorage,
          American College of Physicians, Board of Regents.

    Increasing access to comprehensive high quality health care 
services is a key goal of the Healthy Alaskans 2010 plan. Reaching that 
goal depends upon having an adequate supply of doctors practicing in 
Alaska, having an appropriate distribution of physicians geographically 
to support the systems in place including mid-level providers and 
community health aides and practitioners in remote communities, and 
having an appropriate distribution of specialists to provide the 
continuum of services needed. Specific shortages of internists, 
psychiatrists (for adults and children), and certain medical sub-
specialties have been reported to the Task Force. Comparisons of 
specialists per 1,000 population confirmed the large differences in 
availability of these providers in Alaska compared with the United 
States as a whole.
    Key factors that will exacerbate the Alaska deficit include:

     aging of the population. Alaska's population over age 65 
is expected to nearly triple by 2025 (Williams, 2005);
     aging physician workforce;
     increased competition among States to recruit from a 
limited supply of physicians;
     practice changes (such as preferences for fixed hours and 
limited number of hours) that further increase the number of physicians 
needed to meet adequately the health care needs of the State's 
population; and
     patients' increasing expectations for diagnosis and 
treatment.

    Availability of health services in an area affects demographics of 
communities and of Alaska as a whole. Historically, the percentage of 
Alaskan residents over age 65 has been lower than in most States (6 
percent in Alaska in 2005 compared with 12 percent nationwide). 
Although much of this difference has been related to high mortality 
rates of Alaska Natives and the in-migration of adults in the 1980-1985 
oil boom who are just now reaching retirement age, another explanation 
has been that many older Alaskans have moved either to the cities or 
out-of-state because they were unable to have their health care needs 
met in their home communities. Improved availability of physicians 
including internists and specialists in the diseases that affect older 
people is likely to affect the rate of out-migration of senior 
citizens.
    National workforce projections indicate that the shortage of 
physicians is escalating, although the gap could be held close to 
constant if medical schools and residencies expand.\7\ Since the lead-
time for preparing a college graduate to practice medicine is 7 years, 
policymakers need to consider promptly any indication of an emerging 
shortage of physicians.
---------------------------------------------------------------------------
    \7\ The shortage hypothesis is not universally accepted. Starfield, 
Salsberg, Blumenthal, Elison and others have pointed out that health 
status is not directly correlated with physician to population ratios 
(many countries with lower ratios have better health status than the 
United States, for example) but in some instances a higher ratio of 
primary care to specialists is associated with better health status; 
they point to systems changes including broader roles for ANPs and PAs, 
electronic health records, more effective health promotion and clinical 
prevention approaches, holding down the need for higher physician to 
population ratios even if physicians practice shorter hours and retire 
earlier and at higher rates.
---------------------------------------------------------------------------
  SECTION IV. FINDINGS AND METHODS FOR FORECASTING SUPPLY AND DEMAND 
                           TO 2025 IN ALASKA

A. Demographic Profile of Alaska Through 2025

    Alaska's 664,000 population in 2005 included about 37,000 new 
residents since 2000, or a 6 percent increase in 5 years. The most 
recent population projections for Alaska indicate an increase to about 
788,000 by 2025--another 124,000 people--about 1 percent (7,000) 
increase per year. Population projections are based on patterns of 
birth, death and migration that are evident or expected based on recent 
trends and on anticipated economic developments known at the time the 
projections are made. (To account for some of the uncertainty, Alaska's 
demographer provides a ``low'' and ``high'' projection series as well. 
For 2020 the ``low'' projection is 712,000, the ``high'' is 823,000.) 
In addition to its resident population, Alaska hosts over a million 
tourist visitors a year, and hundreds of thousands of people who come 
to the State or its waters to work in fishing and fish processing, 
tourism, extractive industries, and other activities. Alaska also has 
seasonal residents who are not included in census counts of the 
resident population.
    One quarter of the resident population lives in approximately 321 
places that have fewer than 2,500 people. Most of these communities are 
geographically isolated from not only each other but also from the 
``urban'' hub communities that have health care facilities including 
staff at the mid-level or physician level. The geography and 
demographic distributions of small populations of these communities as 
well as some communities on the ``road system,'' are challenges that 
underlie the effort to provide access to health care in an extreme 
frontier State with 1.1 persons per square mile in 353 communities.


    Assuming that age-specific migration and mortality patterns will 
remain similar to the current (2000-2005) patterns, it is projected 
that the population aged 65 and older will nearly triple by 2025, from 
about 43,000 people in 2005 to about 124,000 in 2025. The State 
Demographer has noted: ``Given the lag time necessary to train 
occupations such as nurses, already in short supply, and to expand home 
care and assisted living, major efforts to meet what is already 
becoming a crisis in the State cannot begin too soon. The impact of the 
rapidly increasing numbers of older residents may be greater than 
elsewhere, because Alaska, with its historically younger population and 
relatively small number of elders, has fewer existing resources to 
serve the elderly'' (Williams, 2005). Aged dependency (currently 10 
elders per 100 Alaskans of working age) is expected to nearly triple by 
2025, while child dependency will increase from the current level of 46 
to about 49 children per 100 working age adults.


    While the age distribution of the population changes in the next 
two decades, the health risks associated with both age and occupation 
may change. Alaska's economy relies considerably on oil extraction, 
fisheries, fish processing, tourism and mining, which include 
seasonally variable work and many occupations with high risk of injury.
    A trend to more service sector jobs may reduce the rate of 
occupational injuries and death, but may also be associated with 
limited health insurance benefits. A continuing trend toward the 
service sector jobs may contribute to a drop in average median 
household income, and increases in the percentage uninsured. There may 
be a higher demand for health care if better health insurance coverage 
is available in the future, for all age groups. Risks for chronic 
disease have been increasing generally, so the needs for clinical 
preventive work as well as diagnosis, treatment and therapeutic 
services are likely to grow considerably.

B. Projected Demand and Supply of Physicians Through 2025

    Current physician mid-level counts. This report describes, 
references and summarizes three independent sources of data about 
physicians in Alaska, including the State of Alaska Occupational 
Licensing database, ASMA directory listing (includes association 
members and non-members), and the American Medical Association (AMA) 
Master File. Strengths and limitations of each source are noted.
    According to the State of Alaska Division of Occupational 
Licensing, 1,392 allopathic physicians (MDs), and 109 doctors of 
osteopathy (DOs) have Alaska addresses and ``AA'' (active) status, for 
a total of 1,501 physicians, or 2.26 physicians per thousand residents. 
However, the true supply of Alaskan physicians is actually smaller, as 
these figures include those not actively providing patient care, as 
well as those who moved out-of-state without notifying the Medical 
Licensing Board since the last license renewal date (December 31, 
2004).\8\
---------------------------------------------------------------------------
    \8\ Nearly 1,000 additional physicians (MD and DO) have active 
licenses to practice in Alaska but do not have Alaska addresses. These 
include physicians who work periodically as locum tenens practitioners, 
some who visit the State to provide specialty services on an itinerant 
basis, physicians licensed in Alaska in order to provide telemedicine 
consults for Alaska patients, others who may not visit on any regular 
basis, some who have left the State but maintain their license, and 
some who have obtained a license but decided not to practice in the 
State.
---------------------------------------------------------------------------
    A second source of data is the ASMA directory, which lists a total 
of 1,414 MDs and DOs (as of January 2006), of whom 1,221 are 
``active.'' This database appears to slightly underestimate the actual 
supply of Alaskan physicians, despite the fact that it includes both 
members and non-members of the Association. A comparison of the ASMA 
database and the State of Alaska Occupational Licensing database 
indicates that the ASMA list excludes some military physicians as well 
as a number of physicians working in the Alaska tribal health care 
system who are licensed in the State.
    Both of the ASMA and State of Alaska Occupational Licensing 
databases specify whether a physician is ``active'' (ASMA) or ``AA'' 
(Occupational Licensing). However, there is no standard definition for 
active status in either database. Therefore, the databases may include 
physicians practicing less than 20 hours a week, or active in non-
patient care work such as administration, teaching or research.
    A third independent source is the AMA Master File of Allopathic 
Physicians (MDs), which counted 1,580 physicians in Alaska in 2004, of 
whom 1,347 are reported to be actively engaged in patient care (20 
hours a week or more). This database is the only known source with 
standardized definitions uniformly applied to physicians throughout the 
United States. As such, the Physician Supply Task Force uses the 
physician supply data from this database for purposes of working toward 
an ``Alaska Standard'' physician-to-population ratio. The AMA Master 
File tracks physicians from medical school onward. It counts primary 
location and primary specialty. Since the AMA also obtains information 
about practice activity that permits distinguishing providers ``active 
in patient care'' for 20 hours a week or more, it provides a more 
accurate estimate of physicians providing care to the population than 
the other available sources. The Task Force uses the data based on the 
2004 AMA survey for comparisons of ``active allopathic physicians in 
patient care'' with other States and with the Nation as a whole. 
Separate data from Occupational Licensing and from the professional 
associations is provided about doctors of osteopathy and mid-level 
providers.
    Retirement status is reported in all three databases. In Alaska, a 
physician may let a license ``lapse'' by not renewing, for example when 
starting retirement, but may within 2 years of the license expiration 
date request reinstatement without penalty. After a 2-year lapse, re-
licensure must begin as if the individual had never been licensed in 
Alaska before.
    The Task Force recognizes that of the 109 DOs with Alaska 
addresses, 77 percent (84) work in primary care (Occupational Licensing 
database). This is a substantially higher percentage than the 60 
percent reported nationally.\9\ Ninety-two (92) active DOs are listed 
by ASMA. Among the DOs active in Alaska as of early 2006, about five 
had come into the State each year during the 1990s. That number 
increased to seven per year for licenses awarded in 2000-2005, or one 
new DO license for every 11 MD licenses.
---------------------------------------------------------------------------
    \9\ Memo to Alaska Task Force, March 27, 2006 from Byron Perkins, 
DO, President, AKOMA.
---------------------------------------------------------------------------
    Each of the available databases thus provides useful information. 
Since detailed analysis of the AMA Master File would require a costly 
purchase, it has not been feasible to use that source for regional or 
other detailed analysis. It is possible to compare the specialty 
distributions between the AMA and ASMA databases, and to check for 
consistency between the age distributions for physicians included in 
the licensing database as ``active'' and those in the AMA Master File. 
The Task Force has been able to analyze the occupational licensing 
database merged with the ASMA listing of members and non-members known 
to be practicing in Alaska, as of January 2006. The occupational 
licensing database has birth date of provider, while the ASMA database 
has activity type and declared primary specialty. It should be noted 
that the ``counts'' might differ slightly (see Figure 8).

                                   Figure 8. Active Physicians by Degree Type
----------------------------------------------------------------------------------------------------------------
                                          Private Practice,
                                       Military, Public Health
                                         (Excludes retirees,        Number of MDs in
        Physician Degree Type            residents, and those   Patient Care 20+ hours/    Active Licensee, No
                                         who report State and              wk                  Restrictions
                                        Federal Number rather
                                               than PH)
----------------------------------------------------------------------------------------------------------------
Data Source:                                       ASMA (2005)               AMA (2004)      Occ Lic-``AA'' with
                                                                                               AK address (2005)
MD...................................                    1,221                    1,347                    1,392
DO...................................                       92                      N/A                      109
TOTAL................................                    1,313                    1,347                    1,501
``Per 1,000''population for the year.    1,000 * 1,313/664,000    1,000 * 1,347/658,000     1,000 * 1501/664,000
                                                         =1.98                    =2.05                    =2.26
----------------------------------------------------------------------------------------------------------------

    The Occupational Licensing and ASMA data indicate that 59 percent 
of Alaska's resident active physicians are based in Anchorage 
Municipality (including Elmendorf), which accounts for about 42 percent 
of the State's population. Fifty-one percent of the State's primary 
care physicians are located in Anchorage. Sixty-eight percent of the 
State's specialists are in Anchorage.
    Physician assistants and advanced nurse practitioners are critical 
providers of care in Alaska, complementing and extending physician 
coverage for primary care, for supervision and training of community 
health aides and practitioners, and in some settings for serving as 
specialists in surgery, emergency medicine, and other areas. As of the 
end of 2005, there were 284 active physician assistants with Alaska 
addresses and ``AA'' status; 29 percent were in Anchorage. Of 486 
advanced nurse practitioners with active licenses and Alaska addresses, 
51 percent were in Municipality of Anchorage.
    The Task Force used the AMA listing for ``physicians in practice'' 
(excluding academics, retirees and others) by specialty, although this 
is for MDs only. One can be reasonably sure of the validity of 
comparing Alaska to the U.S. physician to population ratio using this 
standardized approach. This is the most reliable basis for selecting an 
``Alaska Standard'' for target ratio of physicians (MDs) to 
population.\10\ The physician to population ratio using the AMA count 
of MDs in patient care 20 hours or more per week is 2.05 physicians per 
1,000 population for Alaska for 2004, compared with 2.38 for the United 
States as a whole. If Alaska had the same number per 1,000 as the 
United States, there would be 1,569, or 16 percent (218) more 
physicians in Alaska providing patient care 20 hours per week or more. 
The current level of 2.05 physicians per 1,000 population puts Alaska 
17th lowest among the States.
---------------------------------------------------------------------------
    \10\ UW Center for Health Workforce Studies Working Paper #98 used 
the Master File of the AMA to examine age and county distribution of 
physicians so purchase of the Master File or request to the CHWS could 
provide for another analysis but this will still be limited to MD 
degree holders. The licensure and ASMA data sets provide a more 
complete accounting of Alaska based physicians including Doctors of 
Osteopathy and physicians not licensed in Alaska but serving in the 
Public Health Service Commissioned Corps or the Military.
---------------------------------------------------------------------------
    Keeping in mind the differences among the data sets, and the 
strengths and limitations of each, summary information is presented 
from each of the data set as appropriate, to show relevant information 
about Alaska's physician and mid-level providers. Each data set is 
useful for specific analyses and comparisons. The data permit 
examination and consideration of the factors that are likely to 
influence future demand and supply to 2025. 


    In State rankings of physicians per 1000 population, Alaska's 
ranking in recent years has varied from sixth lowest to thirty second 
lowest, depending on whether or not the count includes only non-federal 
physicians, or whether the ranking focuses on physicians in patient 
care at least 20 hours per week. Figure 9 shows one method of 
``ranking'' States based on ratios for 2004 counting physicians in 
patient care.
    Alaska has proportionally more ``Federal'' physicians than most 
States because of the presence of military physicians, IHS physicians, 
and Public Health Service Commissioned Corps who serve in several 
agencies in Alaska. Methods that exclude ``Federal'' physicians rank 
Alaska lower in comparisons of ``physician to population ratios'' 
because they exclude Federal providers from the numerator, but retain 
the populations served (military and Alaska Native) in the denominator. 
(For example, the Kaiser Family Foundation ``State health fact'' Web 
site uses the non-federal physician count only.)
    Figure 10 shows the numbers of physicians, physician assistants, 
podiatrists and paramedics licensed by the Alaska State Medical Board. 
Other data provided below allow for analysis of physicians and mid-
level provider counts (including advanced nurse practitioners) in more 
detail.

                                 Figure 10. Physicians, Podiatrists, Physician Assistants, and Paramedics by Fiscal Year
                                                 (licensed regardless of State of residence or practice)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   FY 95   FY 96   FY 97   FY 98   FY 99   FY 00   FY 01   FY 02   FY 03   FY 04   FY 05
--------------------------------------------------------------------------------------------------------------------------------------------------------
MD/DO Active....................................................   1,419   1,593   1,603   1,826   1,810   2,034   1,850   2,080   2,099   2,321   2,309
MD/DO Inactive..................................................     262     262     277     266     300     289     285     268     249     242     240
Podiatrists Active & Inactive...................................      13      14      14      15      15      16      16      17      18      17      20
Physician Assistants Active & Inactive..........................     200     231     221     255     244     266     245     284     266     297     307
Paramedics-Active...............................................     134     158     151     191     195     230     233     255     245     283     280
TOTAL...........................................................   2,028   2,258   2,266   2,553   2,564   2,835   2,629   2,904   2,877   3,160   3,156
--------------------------------------------------------------------------------------------------------------------------------------------------------

Source: Alaska State Medical Board.

    Characteristics of the physician workforce in Alaska. The annual 
directories from the Alaska State Medical Association and the biennial 
versions of the Occupational Licensing database both provide trend 
information on the following characteristics of physicians \11\:
---------------------------------------------------------------------------
    \11\ State files: are more current (by a year) than the AMA report 
(especially useful for military); contain geographic location listed in 
license application and ASMA membership application; include DOs as 
well as MDs; provide specialty (ASMA) linked to other characteristics 
(licensing); allow examination of length of licensure, timing of 
license applications and license lapses; and allow comparison of 
licensed providers at different points in time (about every 2 years) to 
determine approximate age at time of move from Alaska, by specialty; 
likewise changes in status (locums to regular license, for instance).

     demographic characteristics;
     practice characteristics;
     specialty distribution; and
     geographic distribution.

    Alaska physicians are younger than the national physician supply, 
and younger than those in other WWAMI States (average age 48.4 vs. 
49.2) according to Chen et al., (Chen, 2005); however as in other 
States, the physician population is aging.


    Since 1998, the percentages of all physicians who were under age 
35, and between 35 and 44 have decreased while the percentages 55 to 64 
and 65 and over have increased. However by comparing the ages of those 
who left Alaska during the 1998-2006 period with those who stayed, one 
can see that departure rates are similar across age rather than being 
higher for older physicians.
    Age distribution of physicians (MD and DO), physician assistants 
and advanced nurse practitioners. As shown in Figures 13 to 15, very 
few (2 or 3 percent) of advanced nurse practitioners and physician 
assistants (mid-level providers) are in the age group 65 and older. 
This compares with 11 percent of physicians being 65 years or older. A 
proportionally larger number of mid-level practitioners are aged 45-
54--about 42 percent compared with 32 percent of physicians.




    Figure 16 shows age distribution of both the active physicians in 
Alaska and the age distribution of those who have let their licenses 
expire, whose last known address was in Alaska. Some of these 
individuals may be working in positions that do not require maintenance 
of an active license, or they may have left the State without informing 
the State Medical Board. They have 2 years to re-activate their 
licenses--after that time they need to re-apply for a license.


    Cohort analysis of the active licensed MDs in 1998 and those who 
were still active in Alaska as of January 2006 shows a similar age 
distribution for those who stayed and those who left practice over 8 
years (see Figure 17). This suggests that departures from Alaska 
practice are not predominantly associated with aging and retirement, 
but occur about equally at any age.


    Figure 18 compares the age of all physicians who have ever been 
licensed in Alaska with the number of those who have left the State and 
no longer hold Alaska licenses. This data again indicates that 
departures are distributed across all ages, rather than occurring 
mostly at ``retirement'' age.


    A comparison of active physicians located in Alaska in 2006 and 
1998 shows similar age distributions in both groups although the total 
number of physicians in 2006 is larger (Figure 19, below). It is 
notable that the number of physicians under age 33 was smaller in 2006 
than in 1998, which might suggest failure to recruit recent graduates 
to the State. With students tending to enter medical school at older 
ages and taking more years of graduate training, it is likely that this 
may be true in other States as well, although it appears that only 
about 9 percent of Alaska's physicians are under age 35, while about 16 
percent are under age 35 nationwide. (Figures 11 and 12 above).


    Figure 20 shows length of service for current active physicians 
living in Alaska, indicating that a very large number and proportion 
have been in the State for 10 years or less. Retaining current 
physicians for additional years is a priority for assuring adequate 
physician supply into the next two decades.


    New mid-level and physician licensees in Alaska. Graphs of year of 
entry (year licensed) for current mid-levels and physicians shows that 
physician assistants are now exceeding advanced nurse practitioners as 
new licensees, although this is a recent development. Mid-level 
providers were first licensed in Alaska in 1980. The total of 60 to 70 
mid-levels each of the last 2 years approaches the number of new 
physicians in each of those years (68 and 80), as shown in Figures 21 
and 22.


    Figure 23 shows the distribution by specialty for allopathic 
physicians active in patient care (20 hours or more per week), 
according to the AMA's master file, based on an annual survey. The 
counts by specialty show that nearly 53 percent of Alaska's allopathic 
physicians are in primary care, compared with about 50 percent of U.S. 
physicians being in primary care. Half of Alaska's primary care 
physicians are family practitioners (366 of 709 primary care 
physicians), compared with only a third of the Nation's primary care 
physicians being in family medicine. Nationally, doctors in internal 
medicine outnumber family practitioners two to one (see Appendix A), 
while in Alaska the ratio is reversed--there are twice as many family 
practitioners as internists. For additional data comparing specialty 
distributions in Alaska and the United States, see Appendix A.

        ``Internal Medicine private practice is part of a dying breed 
        unless something is done. There are many more specialists and 
        sub-specialists than general Internal Medicine physicians in 
        Anchorage now. If our trend continues, there will be few or no 
        general Internal Medicine private physicians in Anchorage due 
        to high student debts and low Medicare payment rates.''
      --Richard Neubauer, MD, Internal Medicine, Anchorage,
          American College of Physicians, Board of Regents.

                        Figure 23. Alaska 2004 Patient Care Physicians (MDs) by Specialty
----------------------------------------------------------------------------------------------------------------
                                                                   Total Patient
                                                                       Care        Patient Care     Percent of
                            Specialty                               Physicians    Physicians per     Total by
                                                                  2004 (MDs, per       1000        Specialty or
                                                                       AMA)         population     Group (2004)
----------------------------------------------------------------------------------------------------------------
Total Physicians................................................           1,347            2.05             100
Primary Care....................................................             709            1.08            52.6
    Family Medicine (& GP)......................................             366            0.56            27.2
    Internal Medicine...........................................             157            0.24            11.7
    Pediatrics..................................................             108            0.16             8.0
    Ob/Gyn......................................................              78            0.12             5.8
Medical Specialties.............................................              55            0.08             4.1
Surgical Specialties............................................             237            0.36            17.6
Psychiatry......................................................              69            0.10             4.9
Emergency Medicine..............................................              72            0.11             5.3
Other Specialties...............................................             205            0.31            15.2
----------------------------------------------------------------------------------------------------------------

Source: AMA Master File

    Besides focusing on differing specialties, physicians work in 
differing practice settings, such as private practice, State or 
municipal or Federal public health activities, and military service. 
The Alaska State Medical Association surveys its members regarding 
their practice settings. Private practice accounts for the vast 
majority of practice settings (nearly 1,200 physicians). The number of 
military physicians who have let ASMA know about their presence has 
shrunk in recent years, accounting even for a shrinkage in the absolute 
number of physicians listed in 2004, but the licensing list indicates 
there was in fact not a decline in active licensed physicians. A review 
of the ASMA listing and occupational licensure found that some 
physicians working in the Alaska tribal health care systems do not list 
their names with ASMA. Certain physicians in Federal service may work 
in the State without an Alaska license. See Figure 24 for the 
distribution by practice type of physicians in the ASMA databases for 
1997 through 2005.


    Typically some portion of the military physicians have worked part-
time in the private sector. Both military and public health service 
staff detailed to Alaska have served as a rich resource for recruitment 
into the private and public sector resident physician workforce, 
according to anecdotal reports.
    Forecasting Assumptions. The Physician Supply Task Force agreed on 
general principles for forecasting need for physicians.
    1. Assume that the proportion of physicians whose area of practice 
is primary care will remain close to the 2004-05 level (53 percent). 
This proportion is expected to drop up to three points, to 50 percent, 
as the number of physicians practicing in medical subspecialties such 
as cardiology and pulmonology, and in psychiatric specialties, which 
are far below national norms, are brought more into alignment with 
population needs.
    2. Assume that the ratio of DOs to MDs, and the ratios of physician 
assistants and advanced nurse practitioners licensed to practice in 
Alaska, will remain the same as the 2004-05 levels. In practice the 
ratio of DOs to MDs has increased gradually over time to 1:11, while 
the number of mid-level providers has increased more rapidly than the 
number of physicians of both types since 1980. The increase may level 
off unless training programs for mid-levels expand faster than 
expected.
    3. The rationale for estimating ``need'' for physicians at 110 
percent of the national norm is based on several considerations.

        a. Rural Alaska communities require a regionalized system. This 
        is operationalized by the Alaska tribal health corporations, 
        which generally staff the smallest village clinics with 
        community health aides and practitioners who will continue to 
        be the primary day-to-day health workforce in those clinics. In 
        the tribal health care system, mid-levels provide care and 
        train and supervise community health aides and practitioners, 
        but physician back up is required for complex and severe cases 
        and for oversight of other providers' services and training. 
        The system requires physician travel and office time for 
        handling phone and telehealth consults, supervision, training, 
        and direct patient care.

        b. To attain Continuing Education Units (CEUs) and continuing 
        education for professional development and maintaining 
        licensure, physicians in Alaska require more time for the 
        travel involved than physicians in the ``Lower 48.'' Even if 
        additional full time equivalents (FTE) in patient care are not 
        needed, more individuals may be needed to provide the FTE 
        equivalents.

        c. In rural and frontier areas, part-time staff cannot be 
        available on short notice as easily as in urban areas. There is 
        thus a structural ``inefficiency'' in that a community that may 
        need 1.2 physicians according to national norms will require 
        two physicians, and communities that would be expected to need 
        a fraction of a physician FTE will need to be served either by 
        a mid-level provider, a community health aide or practitioner, 
        or by transporting patients or providers.

        d. Although Alaskans are younger than the population of the 
        United States as a whole, Alaskans engage in more high-risk 
        occupational and subsistence activities. Thus Alaska's typical 
        case mix results in higher than average needs of the 
        population.

        e. High poverty segments of the population tend to have 
        additional risks associated with both environmental hazards and 
        lifestyle behaviors. Since much of the low-income population is 
        in the most remote parts of the State, this adds to the burden 
        of illness and injury to be addressed in the areas hardest to 
        reach with physician services.

              Figure 25. Physician Need Forecasts for 2025
------------------------------------------------------------------------

------------------------------------------------------------------------
Physicians (MDs) in patient            1,347   2.05 per 1,000 population
 care, 2004:
2004 MD count if at U.S. norm          1,565   2.38 per 1,000 population
 (2.38).........................
    Current shortage using U.S.        (218)
     Norm:......................
    Current shortage using 110         (375)
     percent U.S. Norm:.........
2025 MD Need Forecasts:
    U.S. Forecast need for 2025
     2.82/1,000 * 1.1 = 3.1 per
     1,000......................
                                       2,444    3.1 per 1,000 population
Additional Physicains Needed:          1,097
Average Annual ``gain'' needed,           52
 21 years:
------------------------------------------------------------------------

    Figure 26 compares several possible patterns of increase in 
physician (MD) supply and the ``desired gain'' linear increase that is 
based on Alaska reaching the target of 110 percent of the U.S. norm of 
physicians per 1,000 people by 2025. The ``potential access gap'' 
suggests the widening gap between the anticipated need forecast by the 
Task Force and supply if supply fails to increase. Strategies 
recommended below aim to ensure that the gap does not widen, and the 
need for adequate physician supply is met over the next two decades.


     SECTION V. OVERVIEW OF ALASKA'S CURRENT HEALTH CARE WORKFORCE 
                  DEVELOPMENT AND TRAINING ACTIVITIES

              A. Medical School Opportunities for Alaskans

        ``I was first on the waiting list for University of Washington. 
        They only had space for 10 Alaskans and I was 11th, so I went 
        to OHSU in Portland, Oregon. OHSU is not part of the WWAMI 
        program. I paid out-of-state tuition, roughly four times more 
        expensive than the WWAMI program. My intention from the time of 
        my medical school application was to become a family practice 
        physician in Alaska. OHSU was an excellent school, but I had to 
        arrange my own training experiences in Alaska with my elective 
        rotations, one of which was in Dillingham where I now work.''
  --Leif Thompson, MD. Bristol Bay Area Health Corporation.

    Wyoming, Washington, Alaska, Montana and Idaho (WWAMI). For the 
past 35 years Alaska has participated in a unique collaborative medical 
education program known as the WWAMI Program. In 1971 Alaska was the 
first State to join with the University of Washington School of 
Medicine in an initiative designed to provide medical school 
opportunities in northwest rural States that did not have their own 4-
year medical schools. WWAMI decentralizes medical education, allowing 
medical students to receive training in their home States and in rural 
settings. This approach encourages students to return to their home 
States or WWAMI States to practice medicine. WWAMI remains the only in-
state medical education opportunity available to Alaskans.
    Each year since 1971 there have been 10 medical student slots 
available for Alaskans in WWAMI. Admission to Alaska WWAMI has become 
extremely competitive. In 2005-06 there were about eight Alaskan 
applicants for each slot.
    The applicants selected for admission to WWAMI pay in-state tuition 
rates, about $20,000 less than out-of-state tuition. This $20,000 
difference is subject to a payback provision, but is forgiven if the 
recipient practices in Alaska after medical school. Twenty percent of 
the total amount is forgiven for each year of practice. The payback 
provision was enacted in 1999. Its impact cannot yet be assessed, but 
it is likely to increase the rate of return.
    Alaskans who are admitted to WWAMI now complete their first year of 
medical school at the University of Alaska Anchorage, their second year 
at the University of Washington, and their third and fourth years in 
clerkships and rotations in Alaska or other WWAMI locations. Signing up 
for clerkships and rotations in Alaska is the mechanism that allows for 
completion of nearly 3 years of the 4-year curriculum in Alaska.
    Such clerkships and rotations are partially supported by the Alaska 
Department of Health and Social Services, the University of Alaska 
Anchorage, and the University of Washington, most often using federally 
funded grant programs, so that the students' costs are minimized.
    An average of seven to eight WWAMI medical students begins practice 
in Alaska each year. Five of those students are from the cadre of 10 
per year in Alaska WWAMI. The other two or three come from one of the 
other WWAMI States and are students who usually completed a 3rd or 4th 
year medical school clerkship experience in Alaska as part of their 
WWAMI medical education. Figure 27 depicts the effectiveness of the 
WWAMI affiliations in producing doctors for Alaska. The 50 percent rate 
of return on Alaska's investments in 10 Alaska medical students ranks 
it as #5 among all U.S. States (AAMC, 2006).
    The WWAMI program as part of the University of Washington School of 
Medicine is consistently ranked among the very best medical school 
programs in the United States. The University of Washington is ranked 
as the #1 primary care medical school in the Nation, for the 14th 
consecutive year (The U.S. News and World Report, 2006). It was also 
ranked first in family medicine and rural medicine, and in the top 10 
in every category that was ranked. Thus, WWAMI offers a superior 
medical education to Alaskans while providing that education largely 
in-state, encouraging students to return to practice and helping to 
build in-state capacity.


        ``We have such an exceptional applicant pool for our 10 Alaska 
        WWAMI slots. Last year, all applicants had very strong grade 
        point averages and MCAT scores. The number of slots that we 
        have in WWAMI has not increased to reflect the needs of our 
        growing and aging population.''
        --Peter Marshall, MD. Private Practice, North Pole.

    Western Interstate Commission on Higher Education (WICHE). In the 
past, the WICHE program has provided access to medical education 
(including osteopathy) and other fields of graduate or professional 
study for the residents of member states. The WICHE PSEP provided 
preferential admissions consideration (above other nonresident 
applicants) in participating institutions in the participating States, 
and in doing so agreed to charge admitted PSEP students either the 
resident tuition rate, or, for those private institutions 
participating, a reduced rate of tuition. In return, the State 
``sending'' the participant agreed to pay a support fee associated with 
each of its residents in the program. However, the program for students 
of medicine and osteopathy ended in 1997, after supporting 528 student 
years of study for medical students, 82 of whom were in osteopathic 
medicine between 1982 and 1997, at a cost of $5,700,000. The 
unduplicated student count was 176 (Barrans Memo, 2006). The ``return 
rate'' for WICHE-supported students is reported to be 18 percent, which 
means the program supported about 35 physicians who have served in 
Alaska.

B. Graduate Medical Education in Alaska--the Alaska Family Medicine 
                    Residency

    Alaska's only in-state GME program is the AFMR. Alaska was the last 
State in the United States to have a residency program. The AFMR was 
developed in the 1990s by a consortium of State health leaders with the 
intent to train family physicians for the unique aspects of practice in 
the most remote parts of the State. AFMR residents receive extra 
training in emergency medicine, orthopedics, obstetrics, pediatrics, 
neonatal intensive care, and trans-cultural medicine to prepare them 
for the exigencies of bush practice.
    The AFMR program started in 1997 with eight residents per class, 
and expanded to ten residents per year in 2004 and twelve in 2006. 
Since AFMR's first graduating class in 2000, the program has graduated 
a total of 55 physicians. Of these graduates 70 percent remain in 
Alaska to practice after graduation. This gives Alaska the highest rate 
of return for GME in the United States (AAMC, 2006). Fifty-five percent 
of them practice in rural communities and one-third practice in tribal 
health corporation facilities.\12\
---------------------------------------------------------------------------
    \12\ This is an exceptional result compared to residencies in other 
States. Even the best rural training programs consider themselves very 
successful if they can place 40 percent of their graduates in rural 
communities.
---------------------------------------------------------------------------
    The AFMR residents are drawn from the Alaska WWAMI program and 
other medical schools throughout the United States and other countries. 
They all arrive with the expressed interest in practicing in rural 
settings and most of them have a commitment to Alaska from the start of 
their training.
    AFMR program faculty members are family physicians with rural 
experience in Alaska and other parts of the United States. The 
program's affiliation with the University of Washington WWAMI program 
provides for faculty development and access to academic resources which 
otherwise would not be available in Alaska.
    The Providence Family Medicine Center is the outpatient clinic 
where residents in the program receive much of their training. The 
faculty and residents there provide comprehensive primary care 
including outpatient visits, disease management, health maintenance, 
hospital care, obstetrical care and delivery, and surgical procedures 
for all corners in the Anchorage community. The program has provided 
30,000 patient visits per year with over 15 percent of its population 
from low-income uninsured.
    The AFMR has operated at a deficit since its inception because of 
several factors unique to Alaska.
    1. Most funding for resident training is provided by Medicare 
through the GME funding authority, and this revenue is 25 percent to 50 
percent lower than in other States due to a smaller proportion of 
Medicare business at AFMR's sponsoring hospital, Providence Alaska 
Medical Center.
    2. The average reimbursement per visit is below what many other 
residencies experience.
    3. Unlike most States, the State of Alaska does not appropriate 
State general funds for direct support of the residency program. The 
State of Alaska does support the Residency through Medicaid, as do most 
States, by reimbursing the hospital for Medicaid's share of the costs 
of the program, (about $875,000 per year) and by paying full-Medicaid-
rate professional fees for the medical care rendered by the program to 
Medicaid patients in the Providence Family Medicine Center and the 
hospital (about $668,000 per year).

C. State, Federal and Tribal Efforts to Support Health Care Workforce 
                    Development

    State, Federal and tribal funds support an array of health care 
workforce development and training activities that are critical to 
improved access and quality of care in Alaska. There are programs for 
health career development, pre-med programs, loan repayment programs, 
placement programs for medical student rotations, and recruitment and 
retention programs that encourage health workforce growth. Alaska 
placements and sites are not, however, always available to interested 
applicants.
    Health career development. Although not focused strictly on 
preparing and guiding qualified students into the practice of medicine, 
new curriculum offerings not available a decade ago provide more 
educational choices to Alaskan students, and these can lead to 
heightened interest in medical careers. The University of Alaska has 
expanded its nursing program and added courses in basic sciences, 
nutrition, public health, behavioral health, biology, and other health-
related subjects, as well as a health sciences major for undergraduates 
and Masters in Public Health program for graduate students, all of 
which provide opportunities for preparation for health careers.
    In 2005, the University of Alaska Anchorage's School of Nursing 
received funds from HRSA to establish a basic AHEC program. Nationwide, 
the AHEC program creates formal relationships between universities and 
community partners to strengthen the health workforce in underserved 
communities. For Alaska, community partners developed in the first 3 
years of funding are the Yukon Kuskokwim Health Corporation AHEC Center 
(serving YK Delta region) and Fairbanks Memorial Hospital AHEC Center 
(serving Fairbanks and the Interior) and the Alaska Family Practice 
Residency AHEC Center (serving the Anchorage and the Mat-Su Borough). 
The Alaska AHEC network achieves its collective purpose by encouraging 
Alaska's youth to pursue careers in health care, facilitating clinical 
rotation opportunities in underserved sites, and improving access to 
continuing education for health professionals in underserved areas.
    The University of Alaska WWAMI Program offers a high school summer 
enrichment program called the Della Keats/U-DOC Summer Enrichment 
Program. The goal of this program is to foster, affirm, and encourage 
high school students' interest in the medical professions by allowing 
them to explore health careers and to obtain a valuable introduction to 
college life. Applicants must be Alaska residents with a strong 
interest in the health professions. Underrepresented minority, rural-
area, first-generation, and/or economically disadvantaged students are 
encouraged to apply. Stipends may be available to help with the costs 
of participating in this program.
    As well as the University of Alaska, the ANTHC administers several 
programs that focus on health career development. The ANTHC Education 
and Development Department awards five scholarships of $5,000 per 
academic year in health care-related fields to full-time undergraduate 
students and five scholarships of $5,000 per academic year in health 
care-related fields to full-time graduate students who are Alaska 
Native or American Indian permanent Alaska residents. ANTHC grants 
these scholarships as an integral part of its long-term strategy of 
providing the highest quality health care services to all Alaska 
Natives and American Indians. ANTHC graduate scholarships provide 
supplemental funds for graduate education for students with the 
greatest demonstrated need.
    ANTHC works with the IHS to administer a scholarship program. The 
IHS Scholarship provides selected scholarship recipients who are Alaska 
Native or American Indian permanent Alaska residents with paid tuition, 
related fees, a small amount for travel and books, and a monthly 
stipend for living expenses. IHS currently funds several health career 
and allied health career scholarship programs.
    The ANTHC runs a summer internship program that awards 9-week paid 
internships to approximately 25 high school and undergraduate students 
and five graduate students who are Alaska Native or American Indian 
permanent Alaska residents. ANTHC grants these internships as part of 
its long-term strategy of providing the highest quality health services 
to all Alaska Natives and American Indians and providing work 
experience in a range of medical professions and support services.

        ``I completed my undergraduate studies at Cornell and came out 
        of college with no debt. I went to medical school at Yale and 
        fell in love with Internal Medicine. I took an IHS scholarship 
        for medical school, which led to my 2-year position in Wyoming. 
        I completed my residency in Michigan. I worked in Juneau for 6 
        months and am now in private practice in Anchorage. The amount 
        of debt that medical students now accrue is problematic. Since 
        I had not incurred significant student debts, it never occurred 
        to me to consider going into a high pay specialty.''
      --Richard Neubauer, MD. Internal Medicine, Anchorage,
          American College of Physicians, Board of Regents.

    Medical student clinical experiences. Medical students have the 
opportunity to have clinical experience in Alaska's clinical sites at 
the end of the first year of medical school. Most of the programs 
discussed here focus on rural sites. All of these programs give 
priority to students that are either residents of Alaska or have some 
ties to the State. This approach is based on evidence that students who 
are trained in rural areas tend to work in rural areas and that that 
they tend to work near their training sites. Thus, it is anticipated 
that they are more likely to return to the State to attend the AFMR or 
to serve as physicians after graduation.
    Alaska has at least three programs that provide clinical 
experiences or medical student clinical rotations in the State. The 
Department of Health and Social Services (Alaska Primary Care Office) 
administers the NHSC Student/Resident Experiences and Rotations in 
Community Health (NHSC SEARCH) program, also called the Alaskan 
Exposure program. The ANTHC places students and residents in rotations 
in tribal sites. The Alaska Center for Rural Health (ACRH) manages the 
Rural/Underserved Opportunities Program (R/UOP) summer clinical 
experience for WWAMI students in Alaska.
    The NHSC SEARCH: Alaskan Exposure program supports rotations for an 
average of 40 health professions students each year in underserved 
sites. Of these 40 health professions students, about 20 per year are 
medical students and residents. This program gives priority to Alaska 
residents and NHSC scholarship recipients, and also places interested 
medical students and residents from throughout the United States. It 
also partners with the AFMR, the R/UOP program, and the ANTHC to 
support rotations for medical students and residents.
    The ANTHC supports several rotations in IHS sites each year for 
fourth-year medical students and medical residents who apply and are 
accepted from schools throughout the United States. The Rural/
Underserved Opportunities Program, administered by the ACRH, supports 
rotations each year for students who have just completed their first 
year at the University of Washington School of Medicine (WWAMI 
program).
    Scholarship and loan repayment programs. Some physicians take 
positions in Alaska through a Federal scholarship or loan repayment 
program with a service obligation. Such programs in Alaska include the 
NHSC and the IHS. NHSC scholars can meet their scholarship obligation 
by working at underserved sites with high federally designated Health 
Professional Shortage Area (HPSA) scores. Since most Alaskan sites with 
high enough HPSA scores are too small to support physicians, the 
placement opportunities are very limited, resulting in only a few 
physician recruits for Alaska through this program.
    The Alaska Primary Care Office (APCO) works with Alaska sites and 
the Federal Government to conduct research for federally designated 
HPSAs and, with other State PCOs, seeks to make the HPSA process more 
effective in identifying areas experiencing difficulty in filling 
positions, where the need for additional health professionals may be 
acute but not reflected in physician to population ratios. The APCO 
also serves as HRSA's designated lead contact to link interested NHSC 
physicians with Alaska sites, thereby supporting the recruitment of 
these physicians.
    Placement at Alaska sites through the NHSC loan repayment program 
is more extensive than through NHSC scholarship obligations because 
NHSC has not required such high HPSA scores for loan repayment. Under 
the loan repayment program a physician works for 2 years at a qualified 
HPSA site in exchange for up to $25,000 of loan repayment, tax-free, 
with the option to renew year by year for up to $35,000 per year. 
Currently there are eight NHSC physician loan repayers working in 
Alaska. Physician specialties eligible for NHSC support are family 
medicine, general pediatrics, general internal medicine, general 
psychiatry, and obstetrics/gynecology.
    Alaska is one of 13 States that does not participate in the HRSA 
Bureau of Health Professions State Loan Repayment Program. Funding for 
this program is matched 50/50 by NHSC. The APCO and others have 
researched and coordinated efforts to organize one of these programs 
for Alaska and gain the required 50 percent State match, but funds have 
not been identified. In this program NHSC grants matching funds 
directly to States to operate their own loan repayment programs. 
Primary care health professionals who are providing full-time clinical 
services in a public or non-profit facility located in a federally 
designated Health Professional Shortage Area are eligible for this 
program. Eligibility requirements and benefits vary from State to 
State.
    The IHS has several scholarship programs to support health 
education. Some require a service obligation at a qualified IHS site. 
Under the IHS loan repayment program, applicants sign contractual 
agreements for 2 years and fulfill their agreements through full-time 
clinical practice at an IHS facility or approved Alaska Native tribal 
health program. In return, the loan repayment program will repay all or 
a portion of the applicant's eligible health professionals educational 
loans (undergraduate and graduate) for tuition expenses. Applicants are 
eligible to have their educational loans repaid in amounts up to 
$20,000 per year for each year of service, tax-free. Eligible 
specialties are family medicine, internal medicine, pediatrics, 
geriatric medicine, obstetrics and primarily gynecology, and podiatric 
medicine. Currently there are 18 IHS physician loan repayers working in 
Alaska.

        ``As far as scholarships, there is very little available. I 
        couldn't find any scholarships while in medical school. I was 
        able to find enough funding in loans to cover my tuition and 
        living expenses, roughly $50,000/year, but most of these were 
        unsubsidized loans. In general the more you have to borrow, the 
        less attractive the loans, and the greater the loan fees. I 
        considered National Health Service Corps, however there were 
        very few sites for service in Alaska. I didn't want to risk 
        having to work outside of Alaska to fulfill a commitment.''
  --Leif Thompson, MD. Bristol Bay Area Health Corporation.

    Recruitment and retention. Several organizations provide some 
support for the recruitment of physicians in Alaska. These 
organizations focus primarily on their own mandates and specific grant 
requirements. The ANTHC provides recruitment and referral service and 
support to tribally managed hospitals and clinics throughout Alaska. 
The Alaska Primary Care Association (APCA) maintains an updated list of 
locum tenens providers and a clearinghouse of candidates looking for 
permanent opportunities in Alaska's Community Health Centers. The 
Northwest Regional Primary Care Association has instituted a fee-for-
service recruitment service to Alaska sites. The Alaska Department of 
Labor has a job bank for vacancies in health care settings.
    The APCO coordinates some placement efforts, provides recruitment 
and retention training, researches Health Professional Shortage Areas, 
and analyzes workforce need. The APCO also serves as a focal point for 
NHSC activities, providing technical assistance to monitor and increase 
the number of sites and individuals qualified for NHSC.
    The Alaska Office of Rural Health in DHSS supports recruitment and 
retention by strengthening Alaska's rural health system, facilitating 
network development and administering Alaska's State Web page on the 
Rural Recruitment and Retention Network (3RNET) Web site, where 
clinical sites can advertise positions and health care workers can seek 
jobs. There is no charge to sites or job seekers for this service. The 
posting of positions on 3RNet does not include in-depth candidate 
screening, this function is the responsibility of the site recruiting 
the provider.
    Many of Alaska's medicine-related professional associations and 
membership organizations provide workforce and/or recruitment 
assistance to their members. As examples, the Alaska State Medical 
Association, the ASHNA, and the APCA provide guidance and recruitment 
assistance to their members.
    The APCA is a non-profit membership organization founded in 1995 to 
promote, expand, and optimize access to primary care in Alaska, 
particularly for the underserved. The APCA works with the private and 
public sectors to support and connect the organizations and people who 
provide that care. The APCA promotes workforce development by enhancing 
internship and rotation opportunities in Alaskan health centers; 
marketing health center opportunities to students, faculty and alumni; 
and focusing on retention efforts. With State and Federal partners, the 
APCA maintains an updated list of locum tenens providers and a 
clearinghouse of candidates looking for permanent opportunities in 
Alaska.
    Alaska recruits some international medical graduates through the J-
1 Visa program, which provides incentives to those from other countries 
to receive their medical education and work as physicians with 
underserved populations in the United States. The Alaska Primary Care 
Office coordinates communication for those seeking J-1 visa placements 
through the United States. Department of State Conrad 30 program. 
Currently five J-1 physicians serve in Alaska under this program; all 
are specialists. There were concerns among Task Force members that the 
J-1 program disadvantages health care delivery in developing countries. 
More stringent J-1 Visa policies are likely to be enacted which will 
decrease the physician supply from this source.
    According to Task Force members' observations, many physicians have 
been recruited through the Public Health Service Commissioned Corps and 
the military. Both entities have undergone system-wide reorganizations 
and enacted changes to their physician placement policies resulting in 
reductions to the number of doctors now available to practice medicine 
in Alaska, and smaller cohorts from which to recruit former military 
physicians.
    The Alaska Department of Health and Social Services contracted with 
the University of Alaska, ACRH, for a report called the Status of 
Recruitment Resources and Strategies. This report documents that Alaska 
relies heavily on recruitment to meet its physician workforce needs. 
Competition for the supply of physicians is dramatically increasing 
recruitment costs and decreasing return on investment. Between 2004 and 
2006, physician recruitment costs in rural Alaska increased nearly 30 
percent, from $2,400,000 to $3,400,000. In spite of the scope and cost 
of these efforts, positions are difficult to fill and physician 
turnover is high. Physician locum spending nearly tripled between 2004 
($871,000) and 2006 (over $2,300,000) (DHSS/ACRH, 2006).
    Workforce development research and infrastructure. The Alaska 
Primary Care Office (APCO) in the Department of Health and Social 
Services (DHSS) addresses health care access and workforce disparities 
that exist in Alaska through the expansion of new access points and the 
support of existing health centers. The APCO's goals include: 
assessment of needs; sharing data; workforce development; safety net/
health center growth initiative; designation applications for HPSA and 
Medically Underserved Areas (MUA); and community development. The APCO 
is the major point of contact in Alaska for the NHSC, HPSA 
designations, site development, and students' community-based rotations 
through the NHSC SEARCH: Alaskan Exposure program.
    Between 2000 and 2005, $148,000,000 in Federal funding has been 
made available through the Denali Commission to support rural health 
care infrastructure development. As a result, a combined total of 55 
clinics have been either built or remodeled and outfitted with quality 
medical equipment to date. These efforts have improved the physician 
practice environment, which has aided recruitment efforts. Federal 
Section 330 funds for community health centers' operations have also 
supported the rural health care delivery system, resulting in 
opportunities to staff the clinics. Thus more health centers now offer 
physician-level staffing to complement mid-levels and community health 
aides and practitioners.
    Alaska has a history that demonstrates its commitment to reducing 
workforce deficits by establishing innovative programs and leveraging 
resources. For over 35 years, community health aides and community 
health practitioners have been providing primary health care in rural 
Alaska Native villages as the first link in the Alaska tribal health 
care system. In addition, Alaska has a well-established effective 
patient care model using mid-levels throughout the State. Utilization 
of advanced nurse practitioners, physician assistants and community 
health aides has been a critical component of delivering primary care 
health care service in Alaska, especially in the most rural regions of 
the State.

D. Lessons From Other States and From National Studies

    Information from other States and national studies point to three 
types of interventions as being effective in improving physician 
supply: medical education strategies to address the training 
experiences of physicians; applicant pool strategies to target the 
types of students who enter medical school; and practice-environment 
strategies to make practice more attractive (Grumbach, et al., 1999). 
Examples of each of these three types of intervention are discussed in 
several State and national reports as described below. These reports 
mostly focus on shortages in rural areas. It should be noted that 
physician shortages also adversely affect access to primary care in 
urban settings.
    Medical education strategies. Kentucky's short-term strategies for 
addressing physician shortages include increasing State support of 
Kentucky's residency programs, maintaining or increasing Federal 
support of rural GME through Medicare and Title VII of the Public 
Health Service Act. Long-term strategies include expanding rural 
residency programs to graduate more residents, opening new schools, 
creating a new residency program in a rural area that needs it most, 
increasing class size in existing medical schools, and taking steps to 
increase the ``rural pipeline'' (Casey, et al., 2004).
    Policies that alter the composition of the classes entering medical 
school have the most delayed effects on service in shortage areas, but 
are critical elements of a comprehensive plan for addressing the 
physician shortage because they increase the number of physicians who 
could practice in medically underserved communities. In California it 
was recommended to increase resources for science enrichment programs 
targeted toward K-12 student and college-level educational enrichment 
programs that focus on promoting interest in the health professions 
among disadvantaged students. Characteristics that students bring to 
medical school, such as rural upbringing, racial and ethnic identity, 
or values of public service, are probably the greatest influences on 
their decision to practice in an underserved community. Minority 
physicians are much more likely to practice in underserved communities, 
and physicians who grew up in rural areas are much more likely to 
practice in rural communities (Grumbach, et al., 1999).
    A Utah study discussed the steps to alleviate physician shortage 
that included continuing to expand residency training programs as the 
population grows, to increase rural training, rotations and tracks 
during residency training, and to increase GME funding this study 
recommended targeting students most likely to remain in practice and 
recruiting to increase retention (Taylor, p. 2).
    Utah's GME planning initiative may be a model for other States, 
especially those with only one or two medical schools and a small 
number of teaching hospitals. Nevada and Hawaii have begun to emulate 
the model. The goal of the demonstration is to use a portion of the GME 
monies to increase the number of physicians who choose to practice in 
rural areas. This funding arrangement has helped increase the number of 
generalist physicians, particularly in rural and inner city communities 
(Taylor, p. 2-3).
    Increasing medical school capacity, graduate medical training 
capacity, and medical education and training in shortage areas are key 
strategies to address California's projected physician shortage (Center 
for Health Workforce Studies, December, 2004). The supply of rural 
physicians is largely dependent on the production of family physicians, 
both allopathic and osteopathic physicians. Although many factors such 
as rural upbringing, medical school attended and special educational 
service experiences are important, the final common pathway for the 
largest number of rural physicians is a family medicine residency 
(Council on Graduate Medical Education, 1998. p. 23).
    The Physician Shortage Area Program (PSAP) at Jefferson Medical 
College in Philadelphia selectively admits students from rural areas. 
According to the Director of the PSAP since 1976, graduates of PSAP 
were eight times more likely to choose rural practice (Wisconsin 
Hospital Association and the Wisconsin Medical Society, 2004).
    Hands-on experiences in underserved communities stimulate and 
reinforce interest in caring for underserved populations (Grumbach, et 
al., 1999). The following are examples of clinical rotation programs at 
State universities. These programs aim to support recruitment and 
retention of rural physicians. Eight Michigan State University medical 
students are selected each year for the Rural Physician Program that 
provides rich clinical experiences and community service opportunities 
in small towns in order to boost recruitment of rural physicians. 
University of Illinois College of Medicine Rural Medical Education 
Program is designed to prepare students for unique challenges that face 
rural physicians, with a 30-month ambulatory primary care experience at 
rural primary care centers. Fourth year students participate in a 16-
week rural preceptorship in small, rural communities (Wisconsin 
Hospital Association and the Wisconsin Medical Society, 2004).
    Many other States fund GME in part with Medicaid dollars. Federal 
law allows Medicaid to fund GME through a number of different models, 
including paying hospitals for direct and indirect GME costs and by 
increasing the Medicaid payment rate for patient services rendered by 
teaching physicians and teaching centers, such as the Family Medicine 
Center. The amount allowed is limited by the Federal Medicare payment 
amounts. The advantage of maximizing funding through Medicaid is that 
State appropriations for GME are matched by Federal funds at the 
Medicaid match rate of at least 1:1.
    In addition to supporting Medicaid GME for residencies, many States 
also appropriate funds directly for their support. An excellent example 
is the State of Washington program, which supports each of its family 
medicine programs with about $250,000 per residency per year.
    Recruitment strategies. A national study assessed all State 
programs that provided financial support to medical students, residents 
and practicing physicians in exchange for a period of service in 
underserved areas. Compared to younger nonobligated physicians, 
physicians serving obligations to State programs were more satisfied 
and remained in their practices longer, half of them staying over 8 
years. Retention rates were highest for loan repayment, direct 
incentive, and loan programs. An advantage of these programs is that 
they target physicians at the end of their training, when they know 
more about their career interests, job options, and family needs 
(Pathman, et al., 2004).
    A report on Kentucky's physician shortage identified a number of 
barriers to physician recruitment and retention, including medical 
education costs, workload and demands, and decreased opportunity for 
professional contacts in medically underserved areas. Economic concerns 
that affected recruitment and retention included publicly supported 
insurance programs Medicaid and Medicare that reimburse rural providers 
at a lower rate than urban providers for the same medical procedures; 
rise in insurance payments; relief coverage and assurance of a 
reasonable amount of time off from work is the most important factor in 
decisions to stay or leave. Other issues include quality of public 
schools and ability to become a part of the local community, which was 
scored as more important than income. Having an unhealthy population 
with high rates of disease including heart disease, hypertension, 
asthma, diabetes and cancer can adversely affect the ability to recruit 
and retain physicians. Kentucky's short-term strategies for addressing 
physician workforce shortages include creating waivers for physician 
placement in rural areas, allowing alternative loan repayment matching 
funds, using coal severance tax returns for State match for the SLRP, 
using physician placement services, and continuing support of J-1 visa 
waivers (Casey, et al., 2004).
    A study about California's physician shortage recommended 
increasing the diversity of the physician workforce, and providing 
incentives to encourage physicians to migrate to the State as well as 
incentives to retain physicians currently practicing in the State 
(Center for Health Workforce Studies, December, 2004).
    Physicians whose spouses are from urban areas stay in practice as 
long as those whose spouses are from rural areas. Length of stay in 
rural practice is not associated with attending a public vs. private 
medical school or with training in a community-based vs. medical 
school-based residency. Physicians involved in teaching remain in rural 
practice longer than those who are not involved. For obligated NHSC 
scholars, students from private schools are more likely to stay in a 
rural payback site after they have fulfilled their obligation period 
than are those from public medical schools. Although many urban 
physicians assume otherwise, rural physicians do not necessarily view 
professional isolation and an inability to access medical information 
as drawbacks to rural practice. Lack of quality of rural school 
systems, perceived or real, is related to length of stay for physicians 
in a rural practice (American Academy of Family Physicians, 2006.)
    The location of a physician's training influences his or her future 
choices of practice location. Students with rural origins are more 
likely to train in primary care and return to rural areas; however, 
they are no more likely to stay in rural practice than are those who 
were raised in urban areas. Residents who have their training in rural 
areas are more likely to choose to practice in rural areas. Family 
medicine is the key discipline of rural health care. Residents practice 
close to where they train (Council on Graduate Medical Education, 
1998).
    Community and health care leaders must acknowledge that their 
communities may not have the economic capacity to support physicians or 
maintain state-of-the-art equipment and facilities. This situation can 
be caused by low population of the community, high poverty status of 
the community, or because the community is too geographically isolated 
or disadvantaged to financially support physicians. Continuous 
subsidies would be required to sustain a physician in such areas 
(Wright, et al., 2001).
    Practice environment strategies. Strategies offered to meet 
California's physician shortage included the following: increase the 
productivity and capacity of the existing physician workforce through 
expansion of the supply and use of non-physician clinicians, investment 
in new technologies, increasing the use of treatment protocols and 
utilization review. Promoting physician loan repayment and placement 
programs are key strategies noted in a study addressing California's 
shortages (Center for Health Workforce Studies, December, 2004).
    Regarding practice environment, it was recommended that California: 
(1) resurrect its Shortage Area Medical Matching Program which matched 
graduating residents with practice opportunities in underserved areas; 
(2) match Federal funding for the NHSC SLRP; (3) support pilot programs 
that encourage innovative public health-oriented prevention activities 
for physicians participating in the above programs; and (4) support the 
Rural/Underserved Provider Opportunity Program's locum tenens network 
in rural California (Grumbach, et al., 1999).
    In addition to examples from California that address the physician 
practice environment, a Kentucky study recommended reforming medical 
liability as a means of improving the practice environment (Casey, et 
al., 2004).
    Workforce planning. A workforce report focused on California 
recommended promoting a more effective environment for physician 
workforce planning and policies through increasing data collection and 
monitoring around physician requirements, developing systems to track 
physician supply and requirements, comprehensive re-assessment of 
physician supply and requirements every 5 years, and establishing an 
overall statewide process for physician workforce planning (Center for 
Health Workforce Studies, December, 2004).
    Strategies included in a Utah report were developing a 
Comprehensive State Health Care Workforce Plan to coordinate the 
training of various health professions and maximize limited State 
resources, i.e., funding, faculty and infrastructure, prioritizing 
statewide needs by specialty, and improving data collection methods for 
ongoing collection of physician data (Taylor, p. 2-3). A national 
shortage affects the supply of physicians in Utah; they can no longer 
rely on the national pool to cover local deficits (Taylor, p. 2-3).
    ``Steps should be taken to build stronger rural health communities 
that mobilize all types of human resources (e.g., patients and family 
care givers) and institutions (e.g., educational, social, and faith-
based) to both augment and support the contributions of health 
professionals.'' (Committee on the Future of Rural Health Care, 2005, 
Chapter 4).
    Key strategies to address California's projected physician 
shortages include promoting programs and policies to address physician 
mal-distribution by region and specialty, offering targeted site 
development grants, and increasing reimbursement rates in shortage 
areas (Center for Health Workforce Studies, December, 2004).
    The NHSC Site Development Manual includes a chapter on ``Involving 
the Community'' (U.S. DHHS, 2006). This manual recommends the formation 
of Community Primary Health Care Councils that will be involved in 
making decisions related to the community's health care system, 
including developing sites that can tap into NHSC resources and 
providers who are NHSC Scholars or are eligible for NHSC Loan 
Repayment.
   section vi. closing the gap: strategies for ``growing our own''--
       training, recruiting, and retaining physicians for alaska

    A. Context and Process for Selection of Strategy Recommendations

    One of the two primary charges to the Alaska Physician Task Force 
was to identify strategies that could address the need for physicians 
in Alaska over the next 25 years. In order to formulate its response to 
this charge, the Task Force collected its findings regarding the need 
for physicians and the nature of physician supply, along with previous 
strategies in both Alaska and other States.
    From March 2006 through July 2006, the Task Force and staff 
undertook a detailed investigation of various strategies that have been 
in place in Alaska and other States. The Task Force engaged experts in 
Alaska, the University of Washington, and others outside the State, and 
reviewed literature from national and professional organizations. Also 
considered were physician supply data and trends, Alaska population 
demographic predictions, physician recruitment and retention experience 
in Alaska and other States, current physician practice environment, and 
the professional experience of those consulted during the 
deliberations.
    Beginning with about forty potential strategies gleaned from their 
research, the Task Force reviewed and rated each strategy according to 
feasibility, cost, desirability, effectiveness, and length of time that 
the strategy would take to affect Alaska's physician supply, and then 
concluded with a shorter list of recommended strategies and action 
steps for this report. The list of the original strategies and their 
ratings is in Appendix B.
    The Task Force's selections of strategies are based on the 
following findings:

    Finding 7. Alaska is one of six States without an independent in-
state medical school. Alaska funds 10 state-supported ``seats'' at the 
regional WWAMI medical school, administratively centered at the 
University of Washington School of Medicine. This number (10 seats) 
represents fewer seats per capita than all but 5 of the 50 States.
    Finding 8. Residency programs are one of the most effective ways to 
produce physicians for a State or community. Alaska has only one in-
state residency, the AFMR, which places 70 percent of its graduates in 
Alaska. Maintaining and expanding residency opportunities will be 
critical in augmenting Alaska's physician numbers.
    Finding 9. Over the last 10 years, an increasing number of Alaskan 
students have applied to medical schools; the average number of 
applicants has been 65. In 2005, 29 of 73 applicants were admitted into 
medical school. Ten per year attend WWAMI and the remainder attends 
medical schools without State support from Alaska. Since 1996, only 
WWAMI has had Alaska-supported seats. Prior to 1996, Alaska supported 
programs for medical and osteopathic students through the WICHE program 
and student loans.
    Finding 10. Recruitment for physicians is facilitated by the 
availability of loan repayment programs such as the IHS and NHSC loan 
repayment programs. Service obligations related to student loans have 
historically accounted for some recruitment and should be explored.
    Finding 11. There are several initiatives to increase interest in 
medical careers among Alaskans, including efforts by the tribal health 
care system, hospitals, the University of Alaska's newly funded AHEC 
and the UA Scholars Awards, school system initiatives for improvement 
of math and science programs, and programs that encourage students to 
go into health careers. Collectively, these initiatives generate 
qualified applicants to medical schools, but too few applicants 
matriculate to replenish Alaska's shortage, and there is inadequate 
diversity.
    Finding 12. Medical practice environments in Alaska have positive 
and negative aspects that affect the recruitment and retention of 
physicians.
    Finding 13. Surveys of providers (physicians and mid-levels) by the 
AMA and many States have provided data on practice characteristics, 
preferences, and retirement plans.
    Finding 14. Workforce development activities exist in multiple 
locations including the tribally managed system, private sector, and 
various State and Federal agencies. However existing programs are not 
monitoring or analyzing specialty distribution or needs, changing roles 
of mid-level providers, or potential impact of electronic health 
records on all providers. Coordination of the efforts, and research and 
analysis of relevant trends, should inform policy.

    The Task Force recognized that forecasting physician supply and 
need is a daunting task. Some factors that will significantly impact 
needs have not yet emerged. Conversely, some factors that have been 
forecast may turn out differently than predicted. These unknown 
dynamics will influence the number and type of physicians needed in 
Alaska. Given the limitations of all predictions, the Task Force 
advises that the strategies recommended for achieving an adequate 
physician supply in Alaska be reviewed and updated regularly to insure 
that they are guided by current information.

B. Goals and Strategy Recommendations

    Four goals encompass the strategies needed to address the physician 
supply in Alaska over the next 25 years.
    Goals:

    1. Increase the in-state production of physicians by increasing the 
number and viability of medical school and residency positions in 
Alaska and for Alaskans.
    2. Increase the recruitment of physicians to Alaska by assessing 
needs and coordinating recruitment efforts.
    3. Expand and support programs that prepare Alaskans for medical 
careers.
    4. Increase retention of physicians by improving the practice 
environment in Alaska.

    These goals and the related strategies are summarized below. Short-
term strategies are those that require less than 5 years to impact the 
physician supply, medium-term strategies require 5-20 years and long-
term strategies are expected to have an effect in more than 20 years. 
In the subsequent sections, each strategy is discussed in depth, 
including an explanation of the problem, related action steps, 
timeframe, benefit, cost, responsible party(ies), impact, and 
rationale. Further discussion including a review of the literature is 
included for each strategy.

                Goals and Strategies for Securing an Adequate Physician Supply for Alaska's Needs

              Major goal                       Strategy           Timeline for impact         Estimated cost

1. Increase the in-state production    A. Increase the number   Medium.................  $250,000 per practicing
 of physicians by increasing the        of state-subsidized                               physician.
 number and viability of medical        medical school
 school and residency positions in      positions (WWAMI) from
 Alaska and for Alaskans.               10 to 30 per year.
                                       B. Ensure financial      Short..................  $60,000 per practicing
                                        viability of the AFMR                             physician.
                                        through State support
                                        including Medicaid
                                        support.
                                       C. Increase the number   Short..................  $100,000 per year plus
                                        of residency positions                            $30,000 for planning
                                        in Alaska, both in                                in year 1 & 2.
                                        family medicine and
                                        appropriate additional
                                        specialties.
                                       D. Assist Alaskan        Medium.................  (i) $550,000 per
                                        students to attend                                practicing physician
                                        medical school by: (i)                            for WICHE;
                                        reactivating and                                 (ii) cost unknown at
                                        funding the use of the                            time of PSTF report.
                                        WICHE with a service
                                        obligation attached,
                                        and (ii) evaluating
                                        the possibility of
                                        seats for Alaskans in
                                        the planned
                                        osteopathic school at
                                        the Pacific Northwest
                                        University of the
                                        Health Science.
                                       E. Investigate           Medium.................  Unknown at time of PSTF
                                        mechanisms for                                    Report.
                                        increasing Alaska-
                                        based experiences and
                                        education for WWAMI
                                        Students.
                                       F. Maximize Medicare     Short..................  Zero cost to the State.
                                        payments to teaching
                                        hospitals in Alaska.
                                       G. Empanel a group to    Long...................  Undetermined at time of
                                        assess medical                                    PSTF Report.
                                        education in Alaska,
                                        including the
                                        viability of
                                        establishing an Alaska-
                                        based medical school.
2. Increase the recruitment of         A. Create a Medical      Short..................  $250,000 per year.
 physicians to Alaska by assessing      Provider Workforce
 needs and coordinating recruitment     Assessment Office to
 efforts.                               monitor physician
                                        supply and facilitate
                                        physician recruitment
                                        efforts.
                                       B. Research and test a   Short..................  $65,000 per physician.
                                        physician relocation
                                        incentive payment
                                        program.
                                       C. Expand loan           Short..................  Undetermined--need to
                                        repayment assistance                              consult with other
                                        programs and funding                              States.
                                        for physicians
                                        practicing in Alaska.
3. Expand and support programs that    A. Expand and            Medium.................  Up to $1,000,000 per
 prepare Alaskans for medical careers.  coordinate programs                               year.
                                        that prepare Alaskans
                                        for careers in
                                        medicine.
4. Increase retention of physicians    A. Develop a physician   Short..................  $100,000 to develop
 by improving the practice              practice environment                              index; $20,000
 environment in Alaska.                 index for Alaska.                                 annually to update.
                                       B. Develop tools that    Short..................  $50,000 per year.
                                        promote community-
                                        based approaches to
                                        physician recruitment
                                        and retention.
                                       C. Support Federal tax   Short..................  Zero cost to the State.
                                        credit legislation
                                        Initiative for
                                        physicians that meet
                                        frontier practice
                                        requirements.


Goal 1. Increase the in-state production of physicians by increasing 
the number and viability of medical school and residency positions in 
Alaska and for Alaskans.

Strategy 1A. Increase the number of state-subsidized medical school 
positions (WWAMI) from 10 to 30 per year.

    Problem. Alaska currently ranks 46th among U.S. States in terms of 
the number of state-supported medical school positions. Alaska ranks 
49th among U.S. States in terms of the success of its applicants to 
U.S. medical schools, despite applicant qualifications equal to or 
better than the national average. Long-range planning, even if it 
includes a 4-year medical school in Alaska, will not address current 
physician needs in a timely fashion, so interim measures are needed.
    Action Steps

    1. WWAMI--Increase WWAMI positions to 20 per year and then 
potentially to 30 per year over a period of several years.
    2. WICHE--Fund 10 additional seats per year via WICHE. Such funding 
should include a payback provision.
    3. Monitor the rate of return and cost to benefit ratio.
    4. Adjust the number of program seats available to reflect program 
objectives and outcomes, and to maximize accrual of physicians to 
Alaska from these programs.

    Timeframe. Medium Term
    Benefit. An increase of WWAMI positions by 10 per year will result 
in five additional physicians for Alaska each year. Providing 10 WICHE 
positions per year will result in two additional physicians for Alaska 
each year. Building in-state capacity for medical education supports 
long-term actions that will help to make Alaska more self-sufficient 
and less susceptible to outside factors that could negatively impact 
the health of Alaskans.
    Cost. $400,000 per physician practicing in Alaska trained through 
WWAMI ($200,000/0.50); $600,000 per physician practicing in Alaska 
trained through WICHE ($110,000/0.18).
    Responsibility. University of Washington, University of Alaska, 
Alaska State Legislature.
    Impact. Training; Recruitment.
    Rationale. A major determinant of the eventual practice location of 
physicians is where they went to medical school; so educating Alaskans 
in Alaska is likely to produce physicians for the State (COGME, 1998). 
Fifty percent of Alaskans who enter WWAMI practice in Alaska. Rate of 
return data for the Alaska WICHE physician programs suggest that 18 
percent return to practice in the State.
    Further Discussion. Increasing the number of WWAMI seats to 30 
students would require a significant increase in resources at UAA to 
add capacity to serve the additional students. UAA would need to design 
and build additional facilities and to significantly increase the 
number of faculty in the program. It is difficult to accurately predict 
the amount of funding needed for the expansion. It has been suggested 
that enrollment be doubled to 20 in the medium term with the allocation 
of adequate funding, then re-examine the possibility of increasing to 
30.
    The cost to the State of a medical school position through WWAMI 
would be about $50,000 per student per year, or about $200,000 for the 
4-year education of one student. With a 50 percent rate of return, each 
practicing Alaska physician costs $400,000. Increasing the class size 
from 10 to 20 students increases the total cost from about $2,000,000 
to $4,000,000 per year. An additional increase to 30 students will add 
another $2,000,000 per year to the total.
    Alaska can increase the number of state-subsidized medical school 
positions to 30 per year by either immediately increasing WWAMI 
positions to 20 per year and then building to 30 over a period of 
several years, and/or funding 10 additional seats per year via WICHE 
(with a payback provision). Over a period of several years these 
additional seats may be converted to WWAMI seats, depending on rate-of-
return data.
    WWAMI educates Alaskans in the State for as many as 3 of the 4 
years of medical school. The program is recognized as one of the best 
medical school education programs in the country, especially for rural 
and primary care. Alaska's membership in the WICHE PSEP could be 
utilized to revise and re-establish the student loan program with a 
service obligation. Providing 10 WICHE positions per year will result 
in two additional physicians for Alaska each year. A payback provision 
may increase the number, but so many States now offer to pay off 
physician debt as a recruiting tool, the effect may not be large.
    Since its inception in 1971, 50 percent of WWAMI graduates have 
returned to practice in Alaska. That percentage increases to 75 percent 
when WWAMI graduates from other WWAMI States are counted as 
``returned'' WWAMI physicians. None of the graduates to date have been 
subject to the payback clause instituted in 1999, because it takes a 
minimum of 7 years before medical students are qualified for 
independent practice. Thus, the percentage returning to practice in 
Alaska may increase as those affected by the clause begin to enter 
practice, starting this year.
    The Alaska Legislature has taken the first step in implementing 
this recommendation by appropriating $475,000 toward the one-time costs 
of doubling the WWAMI class size. This perceptive appropriation, 
anticipating an important State need, represents half of the required 
one-time costs and is an important first step to increase physician 
supply.
    Under the WICHE program Alaskans can select from a variety of 
medical schools in western States. They apply independently and must be 
accepted in order to be eligible for their tuition to be subsidized by 
the State. The cost to the State of a medical school position through 
WICHE is about $26,000 per student per year ($25,600 for 2006-07, 
$26,500 projected for 2007-08 and $27,400 projected for 2008-09). Thus, 
the annual cost for 10 WICHE students in each of the 4-year medical 
school curriculum would be about $1,100,000. With an 18 percent rate of 
return, each practicing Alaska physician costs $610,000.
    Increasing state-subsidized medical positions is a medium-term 
action that will provide a long-range payoff. Thus, it is part of an 
overall strategy to increase the number of physicians practicing in 
Alaska. However, it is an interim measure that is required until Alaska 
develops an in-state 4-year medical school.

        ``We need to `grow our own.' Physicians tend to practice in the 
        geographic area where they have completed their training or go 
        back to where they have family. These factors mean that we need 
        to expand both the Family Medicine Residency in Anchorage and 
        the number of positions we have in WWAMI. ''
        --Peter Marshall, MD. Private practice, North Pole,
               Chairman, Alaska WWAMI Admissions Committee.

    Strategy 1B. Ensure financial viability of Alaska Family Medicine 
Residency through State support, including Medicaid support.

    Problem. The AFMR operates at an annual loss of over $2,000,000. 
The sponsoring institution, Providence Alaska Medical Center, has been 
funding the deficit since the program's inception in 1997. The 
program's quality and viability are jeopardized by this dependence on 
private support, which could be withdrawn. Without such ongoing support 
the program would be forced to close, ending the only in-state GME 
program in Alaska.
    Action Steps.

    1. Work with State legislature to maximize Medicaid support of the 
AFMR.
    2. Work with multiple State partners to revise Medicare policies 
that currently disfavor States with younger populations, such as 
Alaska.
    3. Investigate ways to maximize Medicaid support for developing 
other GME programs in Alaska.

    Timeframe. Short
    Benefit. Directly places eight to nine family physicians per year 
in Alaska, a rate of placement that needs to be maintained.
    Cost. $60,000 State cost per practicing physician. There would also 
be a cost for staff time to investigate additional Medicaid support of 
GME.
    Responsible Entity. Alaska State Legislature with support of Alaska 
State Hospital and Nursing Association, Alaska State Medical 
Association, Department of Health and Social Services.
    Impact. Training; Recruitment; Retention
    Rationale. Seventy percent of AFMR's graduates remain in Alaska to 
practice. With 70 percent placed in Alaska, this gives Alaska the 
highest rate of return for GME in the United States (AAMC, 2006). 
Residency programs are one of the best ways to increase the number of 
physicians in a State (COGME, 1998). The AFMR is Alaska's only GME 
program, training 12 physicians per year. All States support their 
residency programs through a variety of funding mechanisms, including 
direct appropriation of funds. Currently Alaska has not maximized the 
amount of support for GME allowed under Federal law. By increasing the 
funding through Medicaid, Alaska would take advantage of the Federal 
Medicaid match, reducing the total State funds necessary. It is 
estimated that the AFMR is eligible for approximately $800,000 in 
additional Medicaid funds, under Federal law, which would require only 
an additional $400,000 of State appropriations.

    Working with the State's Federal congressional delegation, changes 
in Medicare regulations can result in an additional payment of 
approximately $900,000 for the costs of rural training of residents in 
the program. Combined with increased Medicaid payments, this total of 
$1,700,000 brings the required program subsidy within $400,000. Other 
strategies to eliminate this deficit could include direct State 
appropriations, or further increases in the Medicaid payment rates for 
physician services (both are strategies used by other States). The 
final effect of achieving full funding will be to eliminate the 
program's financial vulnerability to cessation of private support.
    Further Discussion. The AFMR is Alaska's only GME program. The 
program recruits and trains 12 doctors each year from Alaska and the 
United States. These doctors undergo a rigorous internship and 
residency program for 3 years, to become family physicians. The 
training emphasizes practice in rural and bush communities in Alaska 
and is very successful, placing over 70 percent of graduates in Alaska, 
over 50 percent in rural areas, and over 30 percent in tribal health 
practices, a performance achieved by very few, if any, other programs.
    The total budget for the AFMR program is about $7,000,000 per year. 
The program operates at a deficit of over $2,000,000 per year. This is 
because the Medicare program, which funds most of GME nationwide, 
disfavors a young population like Alaska's. Consequently the sponsoring 
institution, Providence, receives only about half the reimbursement 
from Medicare that a similar hospital in the lower 48 would receive.
    Other States support their family medicine residency programs with 
a combination of direct State appropriations, Medicaid payments for GME 
to hospitals, and increased Medicaid payment rates for the physician 
services provided by the residents and faculty. Alaska's Medicaid 
program provides $875,000 per year in support of the residency costs to 
Providence, and pays the regular physician rate for professional 
services to Medicaid patients. This rate is above the minimum rate 
Medicaid is required to pay for resident services, but not above the 
rate paid to non-academic physicians in private practice. There is no 
direct State appropriation.
    Action by Alaska's congressional delegation may result in 
additional Federal support for the program totaling $800,000 per year, 
reducing the deficit to $1,200,000 annually. State support will be 
required to make up this deficit, to ensure the ongoing presence of the 
residency program.
    Following trends in other States, Alaska has three obvious 
opportunities to secure the funding of the AFMR:
     increasing Medicaid GME funds to the sponsoring hospital 
to the maximum allowable will provide the program with $800,000, at a 
cost to the State of only $400,000;
     further increasing the payment rates for residency 
services to patients to the comparable private insurance payment rate 
is also allowable, and would provide the program an additional 
estimated $150,000 per year. (This would cost the State $75,000, due to 
the Federal matching benefits); and
     a direct State appropriation to support GME of $250,000 
per year (very similar to support provided by other States).
    Assuming the congressional efforts are successful, the State can 
ensure the viability of the AFMR by adopting these three measures. 
These measures will also create the environment where additional growth 
of residency programs and positions is possible in Alaska.

    Funding needs breakdown:


------------------------------------------------------------------------
                Funding source                     Amount      Deficit
------------------------------------------------------------------------
Current funding...............................   $7,000,000   $2,000,000
Medicare rule changes.........................      800,000    1,200,000
Maximize Medicaid for GME.....................      800,000      400,000
Maximize Medicaid fees........................      150,000      250,000
Direct State support..........................      250,000            0
------------------------------------------------------------------------

    The supply of rural physicians depends largely on the production of 
family physicians. Although many factors contribute to the choice to 
practice in rural areas--rural upbringing, medical school attended, and 
special educational service experiences--the final common pathway for 
the largest number of rural physicians is a family medicine residency 
(Council on Graduate Medical Education, 1998). Some of the residents 
are recruited from the State's population, after they graduate from 
medical school. Typically, however, a majority of the residents are 
recruited from other medical schools, bringing new doctors into the 
State. Doctors, especially in family medicine, tend to stay and 
practice in the State where they finish their residencies, the last 
stage of training. All States in the United States have residency 
programs. Alaska was the last State to start a residency, and since 
Alaska has far fewer physicians per population than any other State in 
the Western United States, it is very important to keep a residency 
viable.

        ``I am from Fairbanks, Alaska. I chose the Alaska Family 
        Practice residency primarily because it was in Alaska, where I 
        wanted to be. It also helped that it was gaining a reputation 
        for being an excellent residency.''
  --Leif Thompson, MD. Bristol Bay Area Health Corporation.

    One of the major obstacles to expanding GME in Alaska is the lack 
of funding. All the GME expansion strategies are unlikely to succeed if 
they cannot be operated at a ``break even'' level for the sponsoring 
institutions. The existing AFMR operates at a deficit, which 
jeopardizes its long-term viability. All States support their GME 
programs. By maximizing the use of Medicaid, the State leverages its 
investment through the Federal matching funds, thereby minimizing the 
cost to the State and maximizing support for the programs.
    Alaska has not yet investigated thoroughly the ways to maximize 
Medicaid support for GME. Doing so would require staff time to research 
the issue and discuss with colleagues in other States. Most of the 
necessary changes can be done administratively within Alaska's Medicaid 
program. Within a year, new GME funds could be made available, provided 
the analysis reveals opportunity. Once funds are available, hospitals 
statewide will be in a position to explore starting GME programs.

Strategy 1C. Increase number of residency positions in Alaska, both in 
family medicine and appropriate additional specialties.

    Problem. Currently Alaska ranks last among west coast States in the 
number of medical residents in training per capita. Limited number of 
residency training opportunities contributes to the statewide physician 
shortage.
    Action Steps. Increase the number of residency positions in Alaska 
by the following mechanisms.
    1. Increase the number of short-term resident rotations in Alaska 
by coordination and marketing.
    2. Develop ``Alaska Tracks'' in collaboration with established 
residencies in other States to provide significant parts of training in 
Alaska.
    3. Develop additional full-fledged residencies in Alaska, as 
conditions permit.
    4. Establish a central agency to coordinate, track and develop 
additional residency experiences.
    Timeframe. Short term. Two to six years.
    Benefit. Residencies in Alaska or sponsored for Alaskans in other 
States impact the number of physicians who choose to practice in 
Alaska. Increasing the number of residency options and implementing an 
``Alaska Tracks'' program would result in net gains to Alaska's 
physician supply each year.
    Cost. $100,000 per year. ``Alaska Tracks'' could gain funding from 
Medicare, if located in rural areas under certain conditions that need 
to be explored to determine feasibility. This funding could cover half 
or more of the cost of the programs. The State portion would depend on 
the number and length of the programs.
    Planning for additional residencies would cost approximately 
$30,000 per year for 1 to 2 years. Operational costs for new 
residencies would depend greatly on the size, location and specialty. 
The current budget for the AFMR is over $7,000,000 per year.
    Responsibility. For appropriations, Alaska State Legislature. For 
operations, AFMR.
    Impact. Training; Recruitment.
    Rationale. Local resident training is a very effective way of 
increasing doctors in a State. Up to 70 percent of residents ultimately 
enter practice in the State where they train (Council on Graduate 
Medical Education, 1998). Since residencies are major determinants of 
practice location of physicians, it is important that Alaska maximize 
its opportunities to offer residency positions in State. Alaska could 
offer residency tracks as an adjunct to programs in other States, and/
or Alaska could be more efficient in supporting residencies for 
Alaskans completing residencies in other States.
    Further Discussion. Currently, Alaska can maximize the number of 
short-term, 1- to 2-month rural experiences associated with residencies 
in other States. A number of these are coordinated by DHSS (NHSC 
SEARCH: Alaskan Exposure program) and ANTHC's tribal sites. Many of 
these experiences are currently arranged based on the interest of the 
resident and availability of sites. There is some coordination across 
these programs but no mechanism exists for centralized coordination. A 
central coordinating agency should be established to coordinate, track 
and develop these experiences.
    Opportunities for increasing the number of resident rotations in 
Alaska may exist in psychiatry in Juneau, in surgery in Fairbanks, in a 
variety of specialties in Anchorage and the Mat-Su Valley, and in many 
Alaska Native tribal health care system hospitals in rural areas. 
Residents frequently seek opportunities in Alaska, and a better system 
of marketing and coordination could increase the number of residents 
coming to the State.
    Development of additional full residencies in Alaska may be 
difficult, but adding ``Alaska Tracks'' as part of existing residencies 
in other States may be more feasible. Currently, the Alaska Native 
Medical Center (ANMC) has a 3-to-6-month track for surgical residents 
from a program in Arizona; all the practicing surgeons at ANMC came 
from this program. Fairbanks Memorial Hospital is working to develop a 
similar program with the University of Washington. In Boise, the VA 
hospital has a 1-year (of three total) track for internists from the 
UW. Such tracks are much more effective in recruiting doctors than 
short 1 or 2 month rotations, but less effective than a full residency 
program. ``Alaska Tracks'' could be available in many specialties in 
many parts of the State. There are many barriers to this approach, most 
importantly the ability and willingness of residencies in other States 
to send their trainees to Alaska. There may be significant loss of 
funding to the home programs when residents leave.
    The feasibility of establishing residencies in Alaska in addition 
to the AFMR should be carefully and critically evaluated. Current 
Medicare law does not allow new residencies to be funded, except in 
rural areas. However, rural parts of the State lack the physician 
specialists and patient types and volumes to support residencies in 
most specialties. Even in Anchorage the same issues limit the possible 
programs to pediatrics, internal medicine, psychiatry, and perhaps a 
few others. But, again, Medicare funding would not be available. The 
AHEC and the AFMR should study this option and work with existing 
institutions to develop plans for implementation.
    Additional 1-to-2-month rural rotations would have a net 
recruitment rate of 10-15 percent. Assuming as many as 30 additional 
rotations would become available; this would net Alaska an additional 
three to five doctors per year. These recruits would begin practicing 
as soon as 2 years after the program started.
    The recruitment rate from ``Alaska Tracks'' would be higher, 
probably in the 20-30 percent range, depending on the specialty and the 
length of the track. A longer track would have a higher recruitment 
rate, but could accommodate fewer doctors per year. If three different 
tracks were developed, exposing 10 residents per year, the net would be 
two to three doctors, starting 2 years after inception.
    The AHEC could prepare a report on the feasibility of new 
residencies in 1 to 2 years. If a new program were planned, a minimum 
of 2 years would be required to develop it, achieve accreditation and 
start training. The production of the program would begin 3 to 4 years 
later. The output would be four to six doctors per year, of whom three 
to five would remain in State, beginning in 2012.
    ``Alaska Tracks'' could gain funding from Medicare, if located in 
rural areas and not in Alaska Native tribal health care system 
hospitals. This funding could cover half or more of the cost of the 
programs. The State portion would depend on the number and length of 
the programs.
    A professional estimate is that planning for additional residencies 
would cost approximately $30,000 per year for 1 to 2 years. Actually 
operating a residency would depend greatly on the size and location and 
specialty. The current budget for the AFMR is over $7,000,000 per year.
    The supply of rural physicians is largely dependent on the 
production of family physicians. Although many factors contribute to 
the choice to practice in rural areas, including rural upbringing, 
medical school attended, and special educational service experiences. 
The final common pathway for the largest number of rural physicians is 
a family medicine residency (Council on Graduate Medical Education, 
1998. p. 23).

Strategy 1D. Assist Alaskan students to attend medical school by: (i) 
reactivating and funding the use of WICHE PSEP with a service 
obligation attached, and (ii) evaluating the possibility of seats for 
Alaskans in the planned osteopathic school at the Pacific Northwest 
University of the Health Sciences.

    Problem. Alaska lacks adequate state-funded financial supports for 
Alaskan students in medical school, and the State lacks state-
subsidized positions at an osteopathic school.
    Action Steps.

    1. Utilize Alaska's membership in the WICHE Professional Student 
Exchange Program to revise and re-establish the student loan program 
with a service obligation.
    2. Explore the possibility with the Pacific Northwest University of 
Health Sciences, in Yakima, Washington of seats for Alaskans in the new 
osteopathic school upon its completion, which is scheduled for Fall, 
2008.

    Timeframe. Mid term. Five to ten years.
    Benefit. This strategy helps State residents afford medical 
education while simultaneously providing the state/community with a 
quantifiable pool of future medical professionals. Loan repayment and 
other direct financial incentives have the benefit of insuring that any 
funds expended are associated with an individual practitioner providing 
a service. Alaskan student slots in the osteopathic school would boost 
the number of Alaskans attending medical school and impact the number 
of physicians who choose to practice in the State.
    Cost. The cost of the WICHE PSEP action step is projected to be 
$550,000 per practicing physician. The cost of guaranteed slots in the 
osteopathic school in Yakima is unknown at time of this report.
    Responsible Entities. For Federal appropriations, Alaska 
Congressional Delegation. For appropriation of operational funds, 
Alaska State Legislature.
    An operational entity, such as a board or task force, needs to be 
established that can set policy regarding the level of subsidies, the 
manner in which the subsidies are to be deployed, and other financial 
strategies to best meet health care workforce needs. The proposed 
Medical Provider Workforce Assessment Office would investigate these 
strategies and provide information to the entity making the policy 
decisions. The Alaska Commission on Postsecondary Education would be 
the most likely organization to administer the financial support 
programs. For the medical school seats, discussions would be needed 
with Pacific Northwest University of the Health Sciences.
    Impact. Training; Recruitment; Retention.
    Rationale. Loan repayment, direct incentive, and loan programs have 
been found to be effective for recruitment and retention (Pathman, et 
al., 2004). Past WICHE students with service requirements account for a 
number of physicians who have stayed in Alaska after the service pay-
back that was required previously. However, State funds were cut to the 
WICHE program in 1995. The Task Force determined that the State student 
aid program with a service obligation should be funded again by the 
State. Additionally, educating Alaskans with seats at the DO school is 
likely to build the pipeline and produce physicians for the State.
    Further Discussion. The WICHE PSEP provided loans to medical 
students in participating schools, with an obligation to return to the 
State to practice, but Alaska has not participated in the medical 
school component for 10 years.
    Increases in financial supports for medical education are needed to 
build the number of Alaskans in the physician supply pipeline, and to 
strengthen recruitment and retention strategies. Through their 
deliberations, the members of the Physician Supply Task Force 
considered the five recognized types of incentives to encourage 
physicians to practice in underserved areas: scholarships, service-
option loans, loan repayment, direct financial incentives, and resident 
support.
    Loan repayment and other direct financial incentives have the 
benefit of insuring that any funds expended are associated with an 
individual practitioner providing a service (in contrast to the 
contingent loans, which must be administered for either the life of the 
service commitment or for the entire repayment period). Additionally, 
the benefit can be made available to draw residents of other States to 
Alaska. These options would also have relatively low administrative 
costs.
    A national study assessed all State programs that provided 
financial support to medical students, residents and practicing 
physicians in exchange for a period of service in underserved areas. 
Compared to young non-obligated physicians, physicians serving 
obligations to State programs were more satisfied and remained in their 
practices longer, half of them staying over 8 years. Retention rates 
were highest for loan repayment, direct incentive, and loan programs. 
These State programs target physicians at the end of their training, 
when they know more about their career interests, job options, and 
family needs (Pathman, et al., 2004).
    The current PSEP support fees for each medical student beginning 
their GME in 2007 would be a total of $111,400 over 4 years. The cost 
of loan repayment/direct financial incentives currently is 
undetermined. Alaska would need to identify what other States are doing 
and figure out what a reasonable ``tipping point'' is to insure the 
repayment cap is high enough and/or financial incentive substantial 
enough to be effective.

Strategy 1E. Investigate mechanisms for increasing Alaska-based 
experiences and education for WWAMI students.

    Problem. Currently, medical students in Alaska's sole medical 
education program, WWAMI, complete their first year in Anchorage. They 
have the option to complete nearly all of the third year and large 
parts of the fourth year in Alaska. Second year classes for all WWAMI 
students are held in Seattle.
    Action Step. Work with University of Washington WWAMI, the 
University of Alaska and the Alaska medical profession to investigate 
the feasibility and cost of providing all WWAMI first and second year 
classes and third and fourth year clerkships in Alaska.
    Timeframe. Medium term.
    Benefit. Providing rotations in all 4 years of medical school in 
Alaska will make the State more independent, able to negotiate 
economies of scale and more independent in setting class size according 
to State needs.
    Cost. Undetermined at time of Task Force Report. Responsibility. 
University of Alaska, University of Washington Impact. Training; 
Recruitment.
    Rationale. Medical students who experience increased exposure to 
Alaska through in-state training, rotations, clerkships and other 
experiences in Alaska are more likely to practice in the State (COGME, 
2004).

        ``We need to offer more support for the Alaska students who 
        attend medical school in other States. They should be 
        considered part of our `family'. They should be offered some 
        type of financial deal and/or electives in Alaska that may 
        encourage them to return to the State to practice. The 
        physicians in Fairbanks and Fairbanks Memorial Hospital have 
        purchased diagnostic kits to give to the students who are 
        accepted into the WWAMI Program. We also have a few kits that 
        we will be awarding to some of the students who are going to 
        medical school elsewhere.''
        --Peter Marshall, MD. Private practice, North Pole,
               Chairman, Alaska WWAMI Admissions Committee.

Strategy IF. Maximize Medicare payments to teaching hospitals in 
Alaska.

    Problem. Current levels of Medicare support for GME in Alaska are 
inadequate to cover teaching hospital expenses. The current payment 
formulas are biased against States with young populations such as 
Alaska, because the formulas are driven by the number of Medicare 
patients in the teaching hospital. Alaska-based GME is jeopardized by 
this funding deficit.
    Action Steps.

    1. Continue to maximize existing opportunities for Medicare 
coverage for GME.
    2. Identify and advocate for specific areas where additional 
Medicare coverage would be beneficial to GME in Alaska.

    Timeframe. Short term. Within 5 years.
    Benefits. Changes to Medicare payment formulas to reflect GME 
expenses would stabilize GME programs in States with younger 
populations by providing a long-term funding stream. These changes will 
need to be led by the Federal delegation.
    Cost. Zero cost to the State, as this is a Federal funding stream. 
The total Federal cost would depend on the formula changes and the 
number of programs that subsequently develop.
    Responsibility. Alaska Federal Congressional Delegation supported 
by Alaska State Medical Association, Alaska State Hospital and Nursing 
Association, statewide health care partners.
    Impact. Training; Recruitment.
    Rationale. Medicare is the primary funder of GME nationwide. 
Establishing new formulas specific to rural or frontier States would 
allow a more even distribution of Medicare funds. Changes in Medicare 
statutes/regulations are needed to help stabilize GME in Alaska.
    Further Discussion. Current levels of Federal support for GME in 
Alaska are inadequate. The Federal laws establishing and regulating GME 
payments through the Medicare program are designed to provide 
marginally adequate funding for large teaching hospitals on the east 
coast. The number of Medicare patients in the teaching hospital drives 
the formulas. Alaska, having a young population, has a much smaller 
proportion of Medicare patients than other States. The funding that is 
marginal in New York is completely inadequate in Alaska. Improving the 
payment rates for Alaska will require new formulas specific to rural or 
frontier States, and/or alteration in Medicare regulations. These 
changes will need to be led by the Federal delegation.
    If it becomes possible to alter Federal law, programs would develop 
in the State alone or in concert with GME programs from other States. 
Alteration of the formulas to more evenly distribute the funds would 
give Alaska a long-term recurring stream of funds.

Strategy 1G. Empanel a group to assess medical education in Alaska, 
including the viability of establishing an Alaska-based medical school.

    Problem. Alaska does not have an independent 4-year medical school 
nor does it have a sufficient number of slots in other State programs 
for qualified Alaskans to pursue medical education. This deficit in 
training capacity contributes to the shortage of physicians in Alaska. 
Currently, no entity exists to explore options and strategically plan 
for medical education in Alaska. There is no strategic plan for medical 
education in Alaska that allows for rational reassessment and planning 
to accommodate continually changing State needs.
    Action Step. Empanel a group or charge an existing group to develop 
a strategic plan for medical education in Alaska that will define the 
requirements (including cost estimates) and the potential benefits 
(including economic impact) of a 4-year medical school in Alaska and 
ensure continued adherence to this recommendation as needs change.
    Timeframe. Long term.
    Benefit. This recommendation develops options for the State of 
Alaska. A rational strategic planning process will ensure that medical 
education in Alaska will develop in a way that will maximize the 
State's return on its investment, producing the largest number of 
physicians, as needed. A 4-year medical school in the State would 
provide significant economic benefit and an enhanced practice 
environment to encourage physician recruitment, and would provide 
increased opportunity to develop one of Alaska's most precious 
resources, young Alaskans seeking professional medical education.
    If continuing collaborative medical education with other WWAMI 
participants is in the State's best interest, that partnership can be 
maintained. If a more independent medical school is more appropriate, 
then the program is positioned to take that next sequential step.
    Based on the current number of medical school applications by 
Alaskans, their qualifications and reasonable projections, implementing 
this strategy could provide 30 physicians per year by 2020, about 23 
more than the current WWAMI program.
    Cost. Undetermined at time of Task Force Report.
    Responsibility. New empanelled group to investigate State medical 
education.
    Impact. Training; Recruitment.
    Rationale. Alaska lacks the benefits enjoyed by States with 4-year 
medical schools. These benefits include: a significant boost to 
regional economy, stimulation of associated businesses, a more 
attractive recruiting environment for physicians, an improved medical 
practice environment, and better health status in the State. A rational 
strategic plan is needed to insure that Alaska has an adequate 
physician supply through 2025. The creation of an Alaska medical school 
would allow more of the State's resources to remain in the State, 
developing capacity and infrastructure in Alaska.
    Further Discussion. Rational planning for medical education 
requires that there be regular, critical evaluation of the potential 
for future development. This task should be charged to an appropriate 
planning group. The alternative is a crisis management approach that 
often leads to sudden, wholesale changes that challenge the maintenance 
of a quality educational program.
    While medical education in Alaska has the greatest potential to 
supply future Alaskan physicians, the current class size in WWAMI 
relegates it to a miniscule role in physician supply. Currently, class 
size cannot be changed easily. Agreement is needed by the University of 
Alaska Anchorage, the University of Washington School of Medicine, 
statewide offices of the University of Alaska and the Alaska 
Legislature to change the class size. Alaska currently participates in 
a very successful medical education program, WWAMI, but there are 
minimal economies of scale as class size increases.
    There is little doubt that Alaska will have a medical school in the 
future. There are many examples of small States with their own medical 
schools, including States with far less resources. Until that time, 
Alaska should work to nurture and develop its current medical education 
program (WWAMI) in ways that support the development of a more complete 
in-state program, or a freestanding medical school. Sequential 
development within the existing medical education program will maintain 
the high quality of the program currently in place.
    Implementing these provisions could provide 30 physicians per year 
by 2020, about 23 more than the current program. This number assumes a 
medical school class of about 50, selected from an anticipated 
applicant pool of more than 100 applicants. There are between 70 and 80 
Alaska applicants per year. About half of all applicants are qualified 
for admission. Other applicants could be drawn from outside Alaska.
    The medical education program in Alaska can be responsive to 
changing State needs by readily accommodating changes in the number of 
students admitted and allowing economies of scale to be realized when 
class size increases.

Goal 2. Increase the recruitment of physicians to Alaska by assessing 
needs and coordinating recruitment efforts.

Strategy 2A. Create a medical provider workforce assessment office to 
monitor physician supply and facilitate physician recruitment efforts

    Problem. Currently there is no statewide entity with sufficient 
resources to adequately coordinate and address medical provider 
workforce issues. Effective planning for future physician supply is 
hindered because there is no office with an ongoing responsibility to 
regularly assess physician supply and need, and research and report on 
medical provider data. Alaska's medical provider recruitment efforts 
are disjointed, resulting in higher recruitment costs and duplicate 
efforts by various organizations.
    Action Steps.

    1. Establish a centralized, statewide Medical Provider Workforce 
Assessment Office.
    2. Develop performance standards and measures for the Medical 
Provider Workforce Assessment Office.
    3. Implement scope of work and tasks of the Medical Provider 
Workforce Assessment Office.

    Timeframe. Short term. 12-18 months.
    Benefit. A Medical Provider Workforce Assessment Office would 
result in ongoing assessment of the status of medical provider supply, 
support long-term planning efforts, directly contribute to net gains in 
physician supply, and improve the cost efficiency of Alaska's medical 
provider workforce recruitment.
    Cost estimate. $250,000 per year. Costs should be shared between 
the organizations concerned with physician and other medical provider 
workforce and the State of Alaska. The office could establish fees for 
its services in addition to this core appropriation.
    Responsibility. The Medical Provider Workforce Assessment Office 
should be located in the State of Alaska, Department of Health and 
Social Services.
    Impact. Recruitment; Retention
    Rationale. Assuring access to health care is a State public health 
function. A key component of access to health care is an adequate 
medical workforce. Assessment of the status of the health care 
workforce, including physicians, and the impact on health status is a 
critical activity and warrants a focused and coordinated response by a 
Medical Provider Workforce Assessment Office.
    As well as assessing and reporting the adequacy of the medical 
provider workforce, the Medical Provider Workforce Assessment Office 
would play a critical role in responding to provider shortages by 
facilitating and marketing recruiting activities statewide among all 
potential employers and practices in the State.
    Further Discussion. The two primary areas of focus for the proposed 
Medical Provider Workforce Assessment Office include the study and 
analysis of the medical provider workforce, including physicians; and 
the facilitation and support of recruitment activities.
    Alaska needs a centralized office in order to identify and track 
physician supply, trends, and practice. The Alaska Physician Supply 
Task Force report is the first report to determine the supply and need 
for physicians and to identify action steps to affect the supply. 
Ongoing assessment is needed of the multiple data sets from national, 
State, regional and local sources that were used by the Task Force.
    Other States have created an office similar to the proposed Medical 
Provider Workforce Assessment Office, with good results. The envisioned 
program would be run from a State office, most likely from the 
Department of Health and Social Services. A precedent for such an 
office is the Alaska Seafood Marketing Institute. The Medical Provider 
Workforce Assessment Office would document the status of the medical 
provider workforce, assess the market, and work with multiple 
stakeholders to plan a recruitment strategy that would assist where 
needed and avoid interference where appropriate.
    The Medical Provider Workforce Assessment Office would share 
information about physician supply and recruitment ``best practices'' 
across sites to help minimize costs and reduce duplication in 
recruitment efforts and to promote ongoing policy discussions regarding 
physician availability. The Task Force recognized that hospitals and 
other entities will want to continue their own specific recruitment 
activities.
    Workforce development activities exist in multiple locations 
including the tribally managed system, private sector, and various 
State and Federal agencies. However existing programs are not 
monitoring or analyzing specialty distribution or needs, changing roles 
of mid-level providers, or potential impact of electronic health 
records on all providers. Coordination of the efforts, and research and 
analysis of relevant trends, should inform policy.

Strategy 2B. Research and test a physician re-location incentive pay 
program.

    Problem. The ability to attract and retain physicians to care for 
medically underserved populations is compromised due to the high 
expense of establishing a practice in Alaska as compared to other 
States.
    Action Steps.

    1. Research relocation incentive pay programs in other States.
    2. Research Federal laws related to provision of relocation 
incentive pay.
    3. Design and implement a relocation incentive pay pilot program.

    Timeframe. Short term. Six to twelve months.
    Benefit. If successful, this strategy would give Alaska another 
method to attract physicians to medically underserved areas. It would 
contribute to a more favorable practice climate resulting in a net gain 
of physicians willing to provide care for medically underserved 
populations.
    Cost. Estimated cost of $65,000 one-time funds to secure one 
physician. This includes approximately $15,000 for travel related 
expenses plus up to $50,000 for a financial incentive payment depending 
on specialty of physician selected. Research and design efforts would 
be funded through the proposed Medical Provider Workforce Assessment 
Office (Strategy 2A).
    Responsibility. ASMA, Alaska State Hospital and Nursing 
Association, proposed Medical Provider Workforce Assessment Office.
    Impact. Recruitment; Retention.
    Rationale. Many States have established programs that offer a 
signing bonus to compete effectively for the limited number of 
physicians, especially in medically underserved areas. This pilot 
program would provide an opportunity to determine the efficacy of a 
relocation bonus in securing physicians for medically underserved 
populations in Alaska. This strategy and related action steps will need 
to address requirements of Stark regulations that prohibit hospitals 
from providing direct financial incentives to physicians.
    Further Discussion. There are challenges in attracting physicians 
to Alaska to establish a practice, or to remain in practice if already 
in the State. One of those is the expense of establishing a practice in 
Alaska compared to other States due to higher salaries, office 
expenses, and uncompensated care burden. Other factors include 
affordable housing, malpractice expense, cost to periodically visit 
family out of State, and generally higher family expenses at a time 
when many new physicians are burdened with medical school debt that 
must be repaid. Newly established physicians do not have the financial 
flexibility to cover all of these higher costs of living in Alaska, 
which may cause them to consider more economically advantageous 
locations around the United States.
    Alaska must identify creative ways to reduce the financial gap 
between establishing a practice in Alaska versus other States. A number 
of States have created programs that offer a signing bonus to attract 
physicians in return for a set commitment in years to stay in that 
State.
    Alaska should test the feasibility of a physician relocation 
incentive pilot program. The pilot program should be based on:

     a review of design and effectiveness of other States' 
programs, looking at overall return on investment for the bonuses 
awarded;
     the estimated amount of signing bonus needed to 
effectively impact a physician's decision to establish a practice in 
Alaska;
     the estimated cost to administer the program and most 
appropriate agency to house the responsibility;
     the scope of specialties that would be eligible for this 
program;
     areas of the State that would be given priority for award 
of these bonuses;
     initial discussions included rural and underserved 
communities that do not have the resources to offer these bonuses on 
their own;
     an analysis of Federal laws impact on this strategy, 
specifically the Federal Stark provisions;
     the estimated cost for administering a full scale program 
and number of placements that could be supported; and
     the amount of signing bonus needed to effectively impact a 
physician's decision.

    Many States have a program that offers a signing bonus simply to 
compete effectively for the limited number of physicians looking to 
start or relocate their practice. These signing bonuses generally come 
with a 3- to 5-year practice commitment to avoid repayment of the bonus 
if the physician leaves the State early. This strategy would target 
already established physicians who wish to leave their current location 
as well as physicians completing a residency program and planning to 
establish their first practice. Members of the Alaska Legislative 
leadership did not support a request for funding a financial incentive 
program during the 2006 Session in part because they wanted evidence 
that this strategy would produce results. This pilot program would 
provide an opportunity to demonstrate whether Alaska could be 
successful competing with other States/organizations. If successful, 
this strategy could be presented as part of a comprehensive set of 
recommendations to the Alaska Legislature to create statutory authority 
and financing to fund a full-scale program to recruit physicians.
    Alaskans for Access to Health Care (AAHC) has been actively 
involved in this Legislative session to bring attention to the need to 
invest funding to attract physicians to Alaska. AAHC is made up of 
ASHNHA, ASMA, Alaska Physicians and Surgeons, and Providence Alaska 
Health Systems. AAHC is informally referred to as ``ACCESS.'' It would 
be helpful for ACCESS members and Alaska DHSS to continue exploring 
financing a pilot effort to travel to physician conferences, medical 
school campuses, large residency settings and other opportune locations 
to promote the benefits of an Alaska practice and to offer financial 
incentives to choose Alaska for their practice.
    If successful, this strategy would give Alaska another effective 
selling point along with the other strategies in this document to 
attract physicians. Clearly this would not be the primary ingredient in 
each physician's decision when choosing a practice location, but it 
would perhaps tip the scale in enough cases to warrant funding a 
program of this type on a permanent basis.

Strategy 2C. Expand loan repayment assistance programs and funding for 
physicians practicing in Alaska.

    Problem. The main loan repayment programs available to physicians 
in Alaska are provided through IHS and NSHC. Limitations of these 
programs are that funding is restricted and subject to annual cutbacks 
that threaten their stability, and that only certain practice locations 
and specialties are eligible for loan repayment through these programs.
    In order to gain more physicians Alaska could participate in the 
HRSA Bureau of Health Professions (BHPr) State Loan Repayment Program 
which has a 50/50 State and Federal match, but Alaska is one of 13 
States that do not participate. In addition, Alaska does not have its 
own SLRP for physicians committing to practice in Alaska in specialties 
or areas not allowed in the Federal programs (including the SLRP).
    Action Steps.

    1. Identify opportunities to apply for the HRSA Bureau of Health 
Professions SLRP and a supplemental State loan repayment program.
    2. Work with DHSS, Governor, State Legislature, and/or local 
communities to secure the 50 percent State match required for the HRSA 
BHPr SLRP.
    3. Research the structure of physician loan repayment programs in 
other States.
    4. Fund a State loan repayment program to supplement the Federal 
loan repayment programs, for physicians serving in shortage areas 
designated by the State.
    5. Identify and work with an agency to administer the HRSA BHPr 
SLRP and/or the supplemental State loan repayment program.
    6. Continue informing Alaska's national delegates of the need to 
maintain or increase annual Federal allocations for NHSC loan repayment 
program and IHS loan repayment program.

    Timeframe. Short term. One to two years.
    Benefit. Improved Federal funding will enable the IHS and NHSC loan 
repayment programs to be stabilized and will allow more clinical sites 
to recruit physicians. This will support rural placements including 
tribal facilities and community health centers. Alaska's participation 
in the HRSA SLRP would allow more physicians in the general specialties 
to work in underserved areas. With an Alaska State loan repayment 
program not tied to HRSA BHPr, the State could more easily recruit not 
only general specialists but also other physician specialists that are 
needed and could use state-designated shortage areas so that many 
additional sites would be eligible.
    Cost. Undetermined at time of Task Force Report.
    With an Alaska State loan repayment program not tied to HRSA BHPr, 
the State could more easily recruit not only general specialists but 
other physician specialists that are needed, and many additional sites 
could be eligible for loan repayment.
    Under the IHS loan repayment program, applicants sign contractual 
agreements for 2 years and fulfill their agreements through full-time 
clinical practice at an IHS facility or Alaskan Native tribal health 
program. In return, the LRP will repay all or a portion of the 
applicant's eligible health professional educational loans 
(undergraduate and graduate) for tuition expenses. Applicants are 
eligible to have their educational loans repaid in amounts up to 
$20,000 per year for each year of service, tax-free. Eligible 
specialties are family medicine, internal medicine, pediatrics, 
geriatric medicine, obstetrics and gynecology, and podiatric medicine. 
Currently there are 18 physicians working in Alaska with IHS loan 
repayment.

        ``Physicians carry a heavy burden of debt coming out of 
        training and are attracted to areas where a healthy share of 
        that burden can be taken away.''
         --John Bringhurst, CEO, Petersburg Medical Center.

Goal 3. Expand and support programs that prepare Alaskans for medical 
careers.

Strategy 3A. Expand and coordinate programs that prepare Alaskans for 
careers in medicine.

    Problem. Too few Alaskan high school students choose to pursue a 
career in medicine. Opportunities that would motivate a greater number 
of middle and high school students to pursue medicine as a career path 
are lost due to lack of medical career counseling, insufficient 
academic preparedness in math and science, and insufficient exposure to 
careers in medicine made available through school programs. Alaska 
ranks 49th among U.S. States in terms of the success of its applicants 
to United States medical schools, despite applicant qualifications at, 
or better than, the national average.
    Action Steps.

    1. Expand and coordinate programs which prepare students for 
careers in medicine.
    2. Provide financial support to effective programs that provide in 
school and summer experiences, internships and job shadowing.
    3. Provide support to programs that make math and science available 
to K-12 students.
    4. Facilitate clinical rotations to rural and underserved areas.
    5. Provide State support for an industry/university partnership 
geared to encourage youth into health careers.
    6. Support current programs to attract students to health careers.
    7. Create a Web site and clearinghouse for opportunities and 
experiences in health careers.
    8. Strengthen the Alaska AHEC by providing State support and by 
increasing number of regional AHEC centers required to accomplish above 
stated goals.

    Timeframe. Medium term of 10-15 years for impact.
    Benefits. The benefits of implementing this strategy and action 
steps are that students will be more academically prepared for medical 
school. The long-term benefit of this strategy will be an increased 
number of Alaskan students who select medicine as their career.
    Cost. Provide up to $1,000,000 in State matching funds for Federal 
pipeline programs.
    Responsibility. University of Alaska, Alaska AHEC, State of Alaska, 
Alaska State Legislature.
    Impact. Training
    Rationale. Alaska must grow its own pool of academic talent to 
prepare for careers in medical education. To support this growth and 
adequately prepare Alaskan students for a career in medicine, more 
attention needs to be directed to preparing and exposing students to 
related careers in a meaningful way within their community. Today there 
are too few opportunities to expose students to the realities and the 
excitement of these careers. The opportunities that do exist are not 
well known.
    Further Discussion. Alaska has a variety of programs that address 
specific components of the health workforce and the training 
curriculum. Coordination between programs is sporadic at best, 
resulting in gaps and redundancies. A communication venue and tracking 
database, which facilitates coordination between and among the various 
Alaskan agencies supporting the development of Alaska's health 
workforce is needed.
    Most programs supporting the health workforce curriculum do not 
receive sufficient funding to support long-term tracking, let alone the 
development of intermediate impact measures. This compromises their 
ability to advocate for future funding. An on-line database with a 
self-administering format and protected access reduces barriers to both 
tracking students and coordinating student participation across 
programs.
    Based on interviews conducted across Alaska in 2004, and 
corroborated by national data, a primary reason for youth not to select 
careers in medicine is lack of exposure to those opportunities (Elder, 
1997; Alexander, 2003; Bumgarner, 2003; Gill, 1996; Ramsey, 2001; 
Magzoub, 2000 and Weiler, 1997).
    In Alaska, attrition and recruitment costs are the highest in 
remote, underserved regions (DHSS/ACRH, 2006). Research shows that 
tangible, positive clinical experience in a setting prior to graduation 
is a factor in encouraging graduates to select that setting for 
employment (Boulger, 2000; Jones, 2000; Neill, 2002; Ramsey, 2001; 
Bacon, 2000; and Rabinowitz, 1999).
    It is important to provide regionally tailored activities with 
measurable outcomes to expose youth to information about careers in 
medicine and a tangible connection to those opportunities. These would 
include speaker's bureaus to high schools, summer immersion programs 
and job shadowing in local health facilities. Additionally, efforts 
must be made to reach out to all those who are currently applying to 
medical school to give them coaching for applications and interviews.

Goal 4. Increase retention of physicians by improving the practice 
environment in Alaska.

Strategy 4A. Develop a physician practice environment index for Alaska.

    Problem. Alaska lacks an objective and reliable method to compare 
its physician practice environment to that in other States.
    Action Step. Develop a practice environment assessment and 
comparison tool. Similar tools currently exist for other States and can 
be modified for Alaska.
    Timeframe. Short term. Within 2 to 3 years.
    Benefit. This strategy would provide an objective basis to measure 
Alaska's physician practice environment relative to other States and 
the national average. The index would identify elements that cause 
Alaska's practice environment to be relatively better or worse than 
other States. This would provide indications for strategies that could 
better the environment. Also, it would identify those elements that are 
strong, relative to other States, and therefore should be stressed in 
the recruiting process.
    Cost. $100,000 to develop the physician practice environment index. 
$20,000 annually to update.
    Responsibility. Medical Provider Workforce Assessment Office and 
health care partners.
    Impact. Recruitment; Retention.
    Rationale. The various elements that together constitute the 
practice environment need to be identified and quantified in a manner 
that allows comparison to the entire United States as well as to other 
States. It can serve as a mechanism that would suggest the specific 
element or elements that cause Alaska to rank either higher or lower. 
Such objective measures can provide the basis for strategies to 
strengthen or improve a particular element as well as an objective way 
to market the elements in which it has relatively higher strengths.
    Further Discussion. An important part of the index would be the 
relative weightings among the various elements in the practice 
environment. For example, one expected element could be the medical-
legal climate. One measure that could be used for this element would be 
physician professional liability premium rates. This element, for 
example, could receive a higher relative weighting. In a 2003 survey, 
62 percent of medical residents stated that the most important aspect 
in practice environment was the medical liability environment (Merit, 
2003).
    At least one other State has developed such an index. The 
Massachusetts Medical Society (MMS) developed an index 5 years ago 
based on nine elements that are weighted based on their importance to 
the overall practice environment. The base year is 1992, and MMS has 
developed the index for each year from 1992 through 2005 for the United 
States and Massachusetts. It hires an economic consulting firm to do 
the statistical analysis. The MMS index could provide a starting point 
for developing an Alaskan Physician Practice Index.
    Cost would probably depend on who will conduct the analysis given 
that template exists in Massachusetts and that the medical community 
could be tapped for volunteer, expert input, $100,000 would probably be 
sufficient funding for the initial development. Annual index 
development and re-calculation would probably not exceed $20,000 per 
year.
    The Task Force identified the University of Alaska, Institute for 
Social and Economic Research as an organization that potentially could 
coordinate development and implementation of the index.

Strategy 4B. Develop tools that promote community-based approaches to 
physician recruitment and retention.

    Problem. Practice sites and communities engaged in physician 
recruitment efforts are often less successful because they are unaware 
of factors that influence physician practice location and effective 
strategies to improve recruitment outcomes.
    Action Steps.

    1. Provide tools for technical assistance and training on physician 
shortage and the impact of site development efforts.
    2. Provide tools to form community-based organizations, such as 
community health councils, to address local site development (U.S. 
DHHS, 2006).
    3. Develop promotional materials that highlight community resources 
and economy as a component of the physician recruitment efforts 
(Commonwealth, 2005. p. 30).
    4. Increase the partnerships among health care sites and 
organizations, such as Chambers of Commerce and Economic Development 
Councils that can help promote the community as a desirable practice 
location.

    Timeframe. Short term. Twelve to eighteen months.
    Benefits. This strategy would result in more appropriate matches 
between communities and physicians. As a result, physicians seeking 
employment would find Alaska practice sites and communities to be more 
desirable. The anticipated benefits are shorter length of vacancies, 
increased number of hires, and increased length of retention.
    Cost. $50,000 per year.
    Responsibility. Proposed Medical Provider Workforce Assessment 
Office and health care partners.
    Impact. Recruitment; Retention.
    Rationale. Numerous factors influence where a physician chooses to 
practice. Some of the factors are characteristics of the practice site 
or the community, such as schools or employment opportunities for a 
spouse (American Academy of Family Practice, 2006; Rosenblatt, et al., 
2006; Casey, et al., 2005; DHSS/ACRH, 2006). Other critical factors 
include the population and economic base of the community that can 
support a physician's practice (Wright, et al., 2001). Communities that 
do not address such factors in their site and in their recruitment and 
retention efforts are less effective in securing and retaining 
physicians for their community. Providing tools and technical 
assistance to communities that tap into their unique strengths, 
identify weaknesses and help them strategize ways to make their 
community more attractive to physicians will contribute to successful 
outcomes.
    Further Discussion. The physician shortage affects not only the 
quality of life of a community's citizens, but also a community's 
economic health. Often, the health care sector is one of the largest 
employers in the community. The adequacy of the health care system 
influences communities' ability to attract and retain business. 
Physician supply is correlated with economic development, expressed as 
real per capita gross domestic product (GDP) (Cooper, et al., 2003).
    Community leaders may be unfamiliar with the nature of the 
physician shortage, how it could affect them locally, and the 
mechanisms that can increase the ability to attract and retain 
providers. Such mechanisms include local internships and residency 
training, teaching opportunities for the physicians, loan repayment and 
scholarships, marketing strategies, and community friendliness toward 
the physician and their family. Community leaders need to address 
elements that impede physician searches, such as the perception 
(whether accurate or not) that rural schools, housing or spousal 
employment opportunities are inadequate (American Academy of Family 
Practice Physicians, 2006). Major perceived barriers to recruitment 
include low salaries and, in rural community health centers (CHCs), 
cultural isolation, poor-quality schools and housing, and lack of 
spousal job opportunities (Rosenblatt, et al., 2006). Successful 
recruitment is often attributed to effectively communicating the high 
quality of life available in a rural community and addressing the needs 
of the physician's family (DHSS/ACRH, 2006).
    Communities need to play an active role in assuring that there are 
an adequate number of providers in their communities. Since small 
communities often lack recruitment staff, they may benefit from 
training on effective recruitment strategies. Also a clear, concise 
description of the shortage facing Alaska can stimulate local problem 
solving.
    Community characteristics, economic expansion and physician supply 
are interrelated. Major factors cited by graduating family practice 
residents as important ones in choosing their first medical practice 
site, include: significant other's wishes; medical community friendly 
to family physicians; recreation/culture; proximity to family/friends; 
significant other's employment; schools for children; size of 
community; initial income guarantee; benefits plan; proximity to 
spouse's family/friends (American Academy of Family Physicians, 2006).
    Marketing strategies that highlight community resources as a 
component of the physician recruitment efforts need to be developed. 
Such marketing strategies should address factors cited by physicians 
such as their perceptions of community inadequacies related to schools, 
housing or spousal employment. Marketing the Alaska lifestyle to 
outside doctors is another effective strategy. (Commonwealth, 2005. p. 
30).

        ``Just as we have marketed Alaskan king crab and Copper River 
        salmon, we can market the variety of exciting opportunities 
        available for physicians in this area.''
         --John Bringhurst, CEO, Petersburg Medical Center.

    It is important for community leaders to be aware of the challenges 
to recruitment and to tailor strategies to address these concerns. 
Community leaders can influence provider housing; hiring packages 
(leave, work schedules and continuing education); teaching 
responsibilities; and service opportunities (i.e. serving on local, 
regional, State, national committees).
    Community and health care leaders must acknowledge that their 
communities may not have the economic capacity to support physicians or 
maintain state-of-the-art equipment and facilities. This situation can 
be caused by low population of the community, high poverty status of 
the community, or because the community is too geographically isolated 
or disadvantaged to financially support physicians. Continuous 
subsidies would be required to sustain a physician in such areas 
(Wright, et al., 2001).
    A report on Kentucky's physician shortage identified a number of 
barriers to physician recruitment and retention. Such barriers 
included: medical education costs, workload and demands; and decreased 
opportunity for professional contacts in medically underserved areas. 
Economic concerns that affected recruitment and retention included: 
publicly supported insurance programs (Medicaid and Medicare) that 
reimburse rural providers at a lower rate than urban providers for the 
same medical procedures; rise in insurance payments; relief coverage 
and assurance of a reasonable amount of time off from work is the most 
important factor in decisions to stay or leave. Other issues include 
quality of public schools and ability to become a part of the local 
community, which was scored as more important than income. Having an 
unhealthy population with high rates of disease including heart 
disease, hypertension, asthma, diabetes and cancer can affect the 
ability to recruit and retain physicians (Casey, et al., 2005).
    Physicians involved in teaching remain in rural practice longer 
than those who are not involved. Although many urban physicians assume 
otherwise, rural physicians do not necessarily view professional 
isolation and an inability to access medical information as drawbacks 
to rural practice. Lack of quality of rural school systems, perceived 
or real, is related to length of stay for physicians in a rural 
practice. (American Academy of Family Physicians, 2006.)
    The Medical Provider Workforce Assessment Office would coordinate 
this strategy's activities and support existing organizations that work 
on physician supply and recruitment, e.g., State Office of Rural Health 
and Primary Care Office in DHSS; Primary Care Association, Alaska AHEC, 
ACRH, ANTHC, University of Alaska, ASHNA and professional associations 
such as ASMA. Linkages among health care sites that recruit and employ 
physicians, mayors, city/borough managers, tribal health corporation 
leadership, economic development organizations, Chambers of Commerce, 
the AFMR, and other training institutions need to be strengthened. 
Contracts with statewide organizations that address health care issues 
would be needed to support training events and technical assistance.
    The NHSC Site Development Manual recommends the formation of a 
Community Primary Health Care Council that would be involved in making 
decisions related to the community's health care system, including 
developing sites that can tap into NHSC resources and providers who are 
NHSC Scholars or are eligible for NHSC Loan Repayment (U.S. DHHS, 
2006).

Strategy 4C. Support Federal tax credit legislation initiative for 
physicians that meet frontier practice requirements.

    Problem. There are insufficient financial incentives to attract and 
retain physicians in rural/frontier practices. Financial-related 
recruitment strategies often create non-cash income that is subject to 
Federal income tax.
    Action Step. Engage statewide health care partners in efforts to 
pass physician tax credit legislation at the Federal level.
    Timeframe. Short term. 12 months.
    Benefit. A tax credit will help offset the taxes on the non-cash 
taxable income created by a loan forgiveness program and thus maintain 
the recruitment benefit of such programs. Additionally, when a tax 
liability is not a factor, a tax credit, in effect, increases the 
income of a physician practicing in a frontier area which influences 
practice location decisions.
    Cost. Zero cost to the State.
    Responsibility. The Alaska Congressional Delegation with support of 
the Alaska State Hospital and Nursing Association, ASMA, and health 
care partners.
    Impact. Recruitment; Retention.
    Rationale. Financial-related recruitment strategies that are 
commonly used, such as loan repayment programs, create non-cash income 
that is often subject to Federal income tax. A tax credit approach made 
available to physicians who practice in frontier areas or who treat 
patients from frontier areas would help maintain the recruiting benefit 
of a loan forgiveness program.
    Further Discussion. A tax credit will help offset the taxes on the 
non-cash taxable income created by a loan forgiveness program and thus 
maintain the recruitment benefit of such programs. Additionally, when a 
tax liability is not a factor, a tax credit, in effect, increases the 
income of a physician practicing in a frontier area.
    The loan forgiveness program that is currently in place for WWAMI 
students forgives the loan at a rate of 20 percent per year of Alaskan 
practice. For example, a WWAMI graduate, with $150,000 in loan 
repayment obligation who practices in Alaska for 5 years, has $30,000 
per year in taxable income created.
    S.2789 introduced on May 11, 2006 by Senator Conrad Burns (Montana) 
and Senator Lisa Murkowski is an example of legislation that provides 
for tax credits for physicians who practice in frontier areas or treat 
patients from frontier areas. The tax credit is $1,000 a month for a 
maximum 60 months. (This bill amends the Internal Revenue Code of 
1986).
    A short-term timeframe for adoption of such legislation is 
important. The WWAMI loan forgiveness element (for practice in Alaska) 
is impacting the first WWAMI students completing their GME this year.
    This is a strategy that would not have impact on the Alaska State 
budget. The cost will depend on the extent of financial incentive 
strategies that create non-cash taxable income and the extent to which 
they are used. The cost is in ``soft dollars'' of Federal income tax 
not collected.
         section vii. areas that warrant further consideration
    Some areas related to Alaska's physician supply warrant further 
consideration but could not be discussed in depth in this report, due 
to limits of the Task Force's directive and time constraints. Such 
areas include:

     patterns and effect of physician turnover on the physician 
supply;
     the need for specialists and sub-specialists;
     the impact of physician assistants and advanced nurse 
practitioners on the need for physicians;
     the impact of community health aides on medical care in 
Alaska;
     the opportunities offered by the developing Doctor of 
Osteopathy program in Yakima, Washington;
     the factors within the Alaska practice environment that 
influence decisions to practice in the State;
     the relationship of the needs of subpopulations such as 
the elderly and those in urban as well as rural locations, on physician 
supply;
     the role of emerging technologies including electronic 
health records and telehealth in physician supply and practice; and
     the relationship between physician supply and health care 
access.

    The Task Force determined that while many of these topics would be 
appropriate duties of the proposed Medical Provider Workforce 
Assessment Office, some of the areas would fall under the 
responsibilities of other organizations.
                        section viii. appendices
    A. Data Details
         1. Matriculants in Medical Schools by State
         2. Specialty Distribution Comparison (2004) Alaska and United 
        States
    B. Strategies Preferences Scoresheet
    C. Physician Study Annotated Reference List
    D. Resource List
    E. Individual Contributors, Persons Consulted, Commentors, 
Reviewers, and Persons who attended Task Force Meetings
    F. Acronym List

APPENDIX A. DATA DETAILS

                                   1. Matriculants in Medical Schools by State
----------------------------------------------------------------------------------------------------------------
                  Applicants                                    Applicants' Matriculation Status
----------------------------------------------------------------------------------------------------------------
                                                   Matriculated In     Matriculated Out of    NOT Matriculated
                                                        State                 State        ---------------------
                                               --------------------------------------------
                                                    N       Percent       N       Percent       N       Percent
----------------------------------------------------------------------------------------------------------------
Region..........................................................................................................
----------------------------------------------------------------------------------------------------------------
Northeast........................       7,867       2,072       26.3      1,773       22.5      4,022       51.1
Central..........................       8,580       2,884       33.6      1,125       13.1      4,571       53.3
South............................      12,089       4,287       35.5      1,284       10.6      6,518       53.9
West.............................       8,069       1,439       17.8      2,041       25.3      4,589       56.9
U.S. Total.......................      37,364      10,682       28.6      6,322       16.9     20,360       54.5
----------------------------------------------------------------------------------------------------------------
State of Legal Residence, Western States:.......................................................................
----------------------------------------------------------------------------------------------------------------
Alaska...........................          73                                29       39.7         44       60.3
Arizona..........................         602         109       18.1         98       16.3        395       65.6
California.......................       4,288         812       18.9      1,167       27.2      2,309       53.8
Colorado.........................         609         108       17.7        125       20.5        376       61.7
Hawaii...........................         208          51       24.5         39       18.8        118       56.7
Idaho............................         161                                61       37.9        100       62.1
Montana..........................         108                                53       49.1         55       50.9
Nevada...........................         167          42       25.1         25         15        100       59.9
New Mexico.......................         245          71         29         24        9.8        150       61.2
Oregon...........................         387          68       17.6         87       22.5        232       59.9
Utah.............................         478          75       15.7        150       31.4        253       52.9
Washington.......................         670         103       15.4        155       23.1        412       61.5
Wyoming..........................          73                                28       38.4         45       61.6
----------------------------------------------------------------------------------------------------------------


                             Alaska Applicants to Medical School by Year, 1994-2005
----------------------------------------------------------------------------------------------------------------
  1994      1995      1996      1997      1998      1999      2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
     72        51        62        59        60        48       59       76       75       69       71       73
----------------------------------------------------------------------------------------------------------------

Source: AAMC: Data Warehouse: Applicant Matriculant File as of 10/20/
2005.

                          2. Specialty Distribution Comparison (2004), Alaska and U.S.
----------------------------------------------------------------------------------------------------------------
               2004
----------------------------------------------------------------------------------------------------------------
    Alaska Population: 657,755         Alaska       Alaska       Alaska        U.S.        Alaska       Alaska
----------------------------------------------------------------------------------------------------------------
                                                                                                      ``Actual''
                                                    Total       Patient      Patient     ``Expected     minus
             Specialty                 Total       Patient     Care Phys/   Care Phys/   # at U.S.    ``Expected
                                     Physicians      Care        1,000        1,000        rate''      at U.S.
                                                  Physicians                                           Rate''*
----------------------------------------------------------------------------------------------------------------
Total Physicians..................        1,580         1347         2.05         2.38        1,569         -222
----------------------------------------------------------------------------------------------------------------
                                     2.28/1,000
----------------------------------------------------------------------------------------------------------------
Primary Care......................          732          709         1.08         1.14          753          -44
Family Medicine...................          342          333         0.51         0.26          173          160
GP/FM.............................           34           33         0.05         0.04           25            8
Internal Medicine.................          161          157         0.24         0.48          315         -158
Pediatrics........................          116          108         0.16         0.23          148          -40
Ob/Gyn............................           79           78         0.12         0.14           91          -13
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Med Spec..........................           57           55         0.08         0.19          126          -71
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
SurgSpec..........................          243          237         0.36         0.39          259          -22
General Surgery...................           73           71         0.11         0.12           81          -10
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Child & Adol Psych................            4            3         0.00         0.02           14          -11
Psychiatry........................           74           66         0.10         0.13           83          -17
Emergency Medicine................           75           72         0.11         0.09           60           12
OthSpec...........................          231          205         0.31         0.40          263          -58
Neurology.........................           12           12         0.02         0.04           28          -16
Anesthesiology....................           75           74         0.11         0.13           84          -10
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Non Pt Care Activities............           69
Inactive..........................          117
Not classified....................           47
----------------------------------------------------------------------------------------------------------------
Adapted by HPSD/AKDHSS..........................................................................................
*Negative implies potential ``need''............................................................................
----------------------------------------------------------------------------------------------------------------

Source: AMA 2006 (Master File database)

APPENDIX B. STRATEGIES PREFERENCES SCORESHEET: STRATEGIES FOR 
                    INCREASING PHYSICIAN SUPPLY IN ALASKA

completed by members of the physician supply task force (6 respondents)


----------------------------------------------------------------------------------------------------------------
     Strategy- Short Title         Strategy Description       Preference Scale (circle number reflecting your
----------------------------------------------------------    preferences, keeping in mind cost, feasibility,
                                                                        desirability, effectiveness)
                                 Short Term (1-5          ------------------------------------------------------
                                 year impact on    Resp 1                                                Average
                                     supply)                Resp 2   Resp 3   Resp 4   Resp 5   Resp 6  Response
----------------------------------------------------------------------------------------------------------------
Recruitment...................  Overall                 3                 4        4                         3.7
                                 Recruitment
                                 Effort.
----------------------------------------------------------------------------------------------------------------
                                Targeting ad            3        3        3        3        2        3       2.8
                                 campaigns
                                 (prof.
                                 journals, TV).
                                Recruitment at          3        5        3        3        5        4       3.8
                                 national
                                 meetings of the
                                 specialty
                                 societies.
                                Match candidates        3        3        3        2        4        3       3.0
                                 with local
                                 cultural and
                                 recreational
                                 needs.
                                Include spouse/         4        5        3        5        5        3       4.2
                                 SO and family
                                 in recruitment.
                                Use recruiters          3        4        2        4        5        3       3.5
                                 from the local
                                 area.
                                Explain                 2        4        3        3        3        3       3.0
                                 advantages of
                                 work in
                                 underserved
                                 areas, rural
                                 communities.
                                Signing bonuses.        2        5        4        4        5        5       4.2
                                Loan repayment          4        3        4        5        5        5       4.3
                                 options
                                 available.
                                Higher salary           4                 4        5        5        3       4.2
                                 and benefit
                                 offerings
                                 (including
                                 leave options).
                                Tax credits.....        2                 5        5        5        5       4.4
----------------------------------------------------------------------------------------------------------------
Retention.....................  Overall                 4                 4        4                         4.0
                                 Retention
                                 Effort.
----------------------------------------------------------------------------------------------------------------
                                Provide extra           3        4        4        4        3        3       3.5
                                 support to
                                 integrate
                                 provider and
                                 family into
                                 local community.
                                Loan repayment          4        5        4        5        5        5       4.7
                                 options
                                 available.
                                Improved salary         4        4        4        4        5        4       4.2
                                 and benefit
                                 scales.
                                Offer/improve                    3        4        5        2        3       3.4
                                 housing.
                                Improved                         4        3        3        3        2       3.0
                                 clinical
                                 facilities.
                                Good schools/           5        4        4        5        4        4       4.3
                                 community
                                 resources.
----------------------------------------------------------------------------------------------------------------
Practice environment..........  Overall Practice        1                 3        4                         2.7
                                 Environment
                                 Effort.
----------------------------------------------------------------------------------------------------------------
                                Continuing                                2        4        2        3       2.8
                                 education
                                 opportunities.
                                Good management                           3        4        2        3       3.0
                                 in work
                                 environment.
                                More opportunity                          1        4        3        3       2.8
                                 for
                                 professional
                                 interaction
                                 thru
                                 videoconferenci
                                 ng & other
                                 means.
                                Welcome provider                          2        4                 2       2.7
                                 to community.
                                Flexible                                  2        3        3        3       2.8
                                 schedule and
                                 call.
                                Malpractice                               3        4        4        1       3.0
                                 insurance
                                 relief/support.
                                Adequate                                  3        5        2        2       3.0
                                 staffing.
----------------------------------------------------------------------------------------------------------------
Education/Training............  Overall                 5                 5        4                         4.7
                                 Education/
                                 Training Effort.
----------------------------------------------------------------------------------------------------------------
                                Expand residency        5        5        5        5        4        5       4.8
                                 programs.
                                Increase medical        5        5        5        5        5        5       5.0
                                 school slots.
                                Early college           4        5        4        4        3        5       4.2
                                 conditioning
                                 for health
                                 careers.
                                Pre-college.....        3        5        3        4        3        3       3.5
                                AHEC program            3        5        2        3        3        5       3.5
                                 expansion.
                                Mentor Alaskan          3        5        2        3        3        3       3.2
                                 high school
                                 students to be
                                 health
                                 providers--talk
                                 at local
                                 schools.
                                Scholarships....        4        5        3        5        4        4       4.2
----------------------------------------------------------------------------------------------------------------
                                    Medium Term (6-20 year planning horizon)
----------------------------------------------------------------------------------------------------------------
Education/Training
----------------------------------------------------------------------------------------------------------------
                                Medical school          5        2        4        2        4        2       3.2
                                 in Alaska.
                                Additional              5        5        5        4        5        5       4.8
                                 medical school
                                 slots.
Practice environment..........  Additional              5        5        4        5        4        5       4.7
                                 residency
                                 programs.
Retention.....................  New and improved        4        4        3        4        3        3       3.5
                                 healthcare
                                 facilities.
Financial Incentives..........  Improved housing        3        4        3        4        2        2       3.0
                                 and facilities.
                                Improved health         2        4        3        3        1        2       2.5
                                 insurance
                                 coverage.
----------------------------------------------------------------------------------------------------------------
                                              Long Term (>20 years)
----------------------------------------------------------------------------------------------------------------
Education/Training............
----------------------------------------------------------------------------------------------------------------
                                Medical school          5        5        5        2        4        5       4.3
                                 in Alaska.
----------------------------------------------------------------------------------------------------------------

APPENDIX C. PHYSICIAN STUDY ANNOTATED REFERENCE LIST

Casey, B.R, Jones, J., Gross, D.A., Dixon, L. (2004). Rural Kentucky's 
physician shortage: strategies for producing, recruiting and retaining 
primary care providers within a medically underserved region. Revised 
for publication in the Journal of the Kentucky Medical Association, 
September 2005. University of Kentucky, Center for Rural Health.
http://www.mc.uky.edu/RuralHealth/Research/WhitePaperJKMArvsd.pdf.

    Kentucky has 400 family physicians that are age 60 or above. The 
State's rural medical residency programs can produce only 16 to 18 new 
family physicians each year. The number of residency applications has 
decreased in recent years. Strategies: addition of an osteopathic 
medical school, rural residency programs, State support for family 
practice GME, physician placement services, State loan repayment 
program, J-1 Visa, reform medical liability.

Center for Health Workforce Studies, University at Albany, State 
University of New York. (2004). California physician workforce: supply 
and demand through 2015.
http://www.ucop.edu/healthaffairs/reports/Final%20Report%20-
%20California%20Physician%20Workforce	12	20042.pdf.

    California is likely to face a 5 percent-16 percent shortage of 
physicians by 2015. Some communities are likely to experience more 
serious shortages than others. Strategies to address projected 
shortages and mal-distribution include: (1) increasing the supply by 
increasing medical school capacity, graduate medical training capacity, 
incentives to encourage migration to the State and to retain physicians 
currently practicing in the State; (2) increasing the productivity and 
capacity of the existing physician workforce by expanding the supply 
and use of non-physician clinicians, new technologies and increasing 
the use of treatment protocols and utilization review; (3) increasing 
the diversity of the physician workforce; (4) promoting a more 
effective environment for physician workforce planning and policies by 
increasing data collection and monitoring physician requirements, 
tracking physician supply, comprehensive re-assessment every 5 years, 
statewide process for physician workforce planning; (5) promoting 
programs and policies such as identification and publication of 
shortage areas by specialty, physician loan-repayment and placement, 
targeted site development grants, medical education and training in 
shortage areas, increasing reimbursement rates in shortage areas.

Chen, F.M., Fordyce, M.A, Hart, L.G. (2005). WWAMI physician workforce 
2005. WWAMI Center for Health Workforce Studies, Working Paper #98.
http://www.fammed.washington.edu/CHWS/reports/CHWSWP98%20Chen.pdf.

    The UWSOM currently produces approximately 175 physicians a year 
and over 60 percent of graduating students stay within the five-state 
area to practice. Almost 50 percent of graduating students pursue 
careers in primary care. Twenty percent of WWAMI graduates will 
practice in federally-designated Health Professional Shortage Areas. 
This analysis utilized the 2005 AMA Master File to determine the 
population-based supply of physicians at the State and county level, by 
discipline of physician and whether they graduated or trained at UWSOM. 
Currently there are 22,578 physicians in the five-state WWAMI region. 
Of these, 18,794 are clinically-active. Two-thirds (12,718) are in 
Washington. Wyoming has the smallest number (830).

Council on Graduate Medical Education. (2005). Seventeenth report: 
minorities in medicine: an ethnic and cultural challenge for physician 
training.
http://www.cogme.gov/17thReport/17.htm.

    Findings: ``Family income'' is the most influential factor in 
determining whether a high school senior will be ``very well 
qualified'' for college, based on class rank, grade point average and 
scores on standardized tests. Parents' education and income levels 
affect academic achievement of children. Disproportionate numbers of 
``underrepresented minority'' children live in single-parent and low-
income households. Although some programs promote children's interest, 
academic achievement, and career choices in science and health, a need 
exists for organizations to partner with media, advertising and 
marketing firms to develop and disseminate culturally appropriate 
messages targeted to minority and disadvantaged youth to encourage 
academic persistence and achievement and interest in medical careers.

Council on Graduate Medical Education. (2005). Sixteenth report: 
physician workforce policy guidelines for the United States, 2000-2020.
http://www.cogme.gov/pubs.htm.

    The supply of practicing physicians is expected to rise 24 percent 
from 781,200 to 971,800 between 2000 and 2020. Growth is expected to 
slow after 2010 due to the aging of the workforce and the relatively 
level number of new physician entrants since 1980. At the same time the 
demand for physicians is likely to grow more rapidly than the supply 
and the need for services is expected to increase. Considering supply 
and need, a shortage of 96,000 is projected in 2020. Factors, such as 
changing lifestyles, increase in the use and expected increases in the 
Nation's wealth, are included in this report. Other factors not 
included are: potential increase in non-patient care activities, change 
in practice patterns for physicians over 50, departures due to 
liability concerns, limiting the number of patients (``boutique 
medicine'') and individuals with chronic illnesses living longer.

Council on Graduate Medical Education. (1998) Tenth report: physician 
distribution and health care challenges in rural and inner-city areas.
http://www.cogme.gov/rpt10.htm.

    Findings include the following: The lack of health insurance 
presents the greatest barrier to medical care. Safety net programs such 
as CHCs and the NHSC are essential mechanisms for insuring access to 
health care for underserved populations. Growth in the number of 
physicians in the United States has not eliminated the problem of 
geographic mal-distribution. The small number of family physicians has 
contributed to the shortage of rural physicians. PAs and ANPs play an 
important role in providing medical care in rural underserved areas. 
CHCs and group practice arrangements may be the most viable model for 
increasing care in underserved areas.

Grumbach K., Coffman, J.M., Young, J.Q., Vranizan, K., Blick, N. 
(1998). Physician supply and medical education in California: a 
comparison with national trends. University of California, San 
Francisco, Medical School, Department of Family and Community Medicine.
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1304984.

    This study concluded that California has an ample supply of 
physicians in the aggregate, but too many specialists, too few 
underrepresented racial/ethnic minority physicians, and poor 
distribution of physicians across the State. These factors will 
continue to exert inflationary pressures on the health care system 
without improving access to care. Major policy changes are needed to 
address the imbalance.

Grumbach, K., Coffman, J., Liu, R., Mertz, E. (1999). Strategies for 
increasing physician supply in medically underserved communities in 
California. California Policy Research Center Brief Series, Center for 
California Health Workforce Studies.
http://www.ucop.edu/cprc/MDsupply.html.

    This report recommends three types of strategies to increase the 
physician supply in underserved areas: (1) practice-environment to make 
practice in shortage areas more attractive (2) medical education to 
address the training experiences of physicians (3) applicant pool to 
target the types of students who enter medical school. Practice-
environment interventions have the quickest ``pay off'' in improving 
physician distribution because they target the point when physicians 
are ready to enter practice. Medical education and applicant-pool 
strategies are integral to a comprehensive plan but take longer to 
yield results.

Hart, L.G., Lishner, D.M., Larson, E.H., Chen, C., Andrilla, H.A., 
Norris, T.E., Schneeweiss, R., Henderson, T.M. and Rosenblatt, R.A. 
(2005). Pathways to rural practice: a chart book of family medicine 
residency training locations and characteristics. http://
www.ask.hrsa.gov/detail.cfm?PublD=ORHP00324.

    A survey of U.S. family medicine residencies was conducted in 
January 2000. Of the 453 questionnaires sent, 435 responded (96 
percent). Only 33 of the responding programs (7.6 percent) were located 
in rural areas; predominantly in community hospitals. Over one-third of 
the urban programs listed rural training as an important part of their 
mission; however, only 2.3 percent of their training took place in 
rural areas. For the Nation as a whole, 7.5 percent of family medicine 
residency training occurred within rural areas, although 22.3 percent 
of the U.S. population lives in rural places. The number of rural 
residencies has declined since the survey was conducted. Unless 
significant efforts are made to increase rural residency training, 
rural physician shortages are likely to persist.

Institute of Medicine of the National Academies. (2005). Quality 
through collaboration: the future of rural health care. National 
Academies Press.

    This report discussed improvements in the three broad areas of the 
pipeline to increase the size of a quality rural workforce: (1) 
attracting rural students to health careers, (2) providing formal 
education programs, and (3) recruiting and retaining trained health 
professionals in rural areas. (p. 89)
    Measures to attract rural students to health careers involve 
enrichment of schooling for pre-collegiate students, ensuring that 
basic science is part of the curriculum, and ensuring that students 
have positive exposure to role models and career paths in rural health 
care delivery. (p. 91)
    It is important to create opportunities for members of minority and 
disadvantaged populations. Programs administered by HRSA and improved 
admissions processes can assist in this effort. (p. 93)
    For physicians, two factors are strongly predictive of a future 
career in rural health: a rural background and plans to enter family 
medicine. (Rabinowitz and Taylor, 2004). Medical schools that make a 
strong commitment to educating physicians for rural practice quite 
successful track records. (p. 94)

Ricketts, T.C. (2005). Workforce issues in rural areas: a focus on 
policy equity. American Journal of Public Health, 95, 42-48.
http://www.ajph.org/cgi/content/abstract/95/1/42.

    Rural communities in the United States are served by fewer health 
care professionals than urban or suburban areas. This review of the 
geographic distribution of health professionals and policies and 
programs that influence practice location decisions identifies three 
categories of policy levers: coercive, normative and utilitarian; and 
recommends a balanced use of the three approaches.

Southworth, M. (2004). Alaskan's physician workforce: an overview, a 
summary of training backgrounds, and the impact of the WWAMI program. 
Thesis submitted for degree of Master of Public Health, University of 
Washington.

    Alaska has 1,304 physicians with an active Alaska medical license 
that were reviewed. 93.7 percent MD degrees, 6.3 percent DO degrees; 
76.6 percent at least one board certification; 30.2 percent women; 24.6 
percent addresses in rural communities; osteopaths 1.6 percent of rural 
physicians and 4.6 percent of urban physicians; women 34.3 percent 
rural and 28.8 percent urban; generalists 43.7 percent; surgical 21.9 
percent; medical specialists 8.0 percent; other fields 26.4 percent; 29 
percent fewer generalists per 100,000 population in rural communities. 
9.9 percent of Alaska physicians received degrees at UWSOM; 9.6 percent 
from four other schools; 9.4 percent U.S. military postgraduate 
training. 52.6 percent of UWSOM graduates are generalists and 24.1 
percent are in rural communities. Alaska's physician workforce is 
growing but geographically mal-distributed.

Taylor, P. Utah links Federal funding for graduate medical education to 
State's physician workforce needs. Publication produced for U.S. 
Department of Health and Human Services, Health Resources & Services 
Administration, Office of Rural Health Policy. http://
ruralhealth.hrsa.gov/pub/UtahGME.asp.

    A state-chartered commission in Utah is linking Utah's GME funding 
and statewide physician workforce needs. The Medicare GME demonstration 
project gives the Utah Medical Education Council authority to receive 
and disburse all Utah Medicare Direct Medical Education payments. One 
goal of the demonstration is to increase the number of graduating 
physicians who choose to practice in rural areas.

U.S. Department of Health and Human Services, Health Resources and 
Services Administration, Bureau of Health Professions, National Center 
for Health Workforce Analysis. (Spring 2003). Changing demographics: 
implications for physicians, nurses, and other health workers.
http://bhpr.hrsa.gov/healthworkforce/reports/changedemo/default.htm.

    The findings of the literature and two demand forecasting models: 
the Physician Aggregate Requirements Model (PARM) and the Nursing 
Demand Model (NDM) are: aging population will increase the demand for 
physicians per 1,000 from 2.8 in 2000 to 3.1 in 2020. Between 2000 and 
2020 the percentage of patient care hours spent with minority patients 
will rise from 31 to 40 percent. Increases under five scenarios are 
projected: status quo (33 percent), baseline (28 percent), universal 
coverage (40 percent), 100 percent HMO (36 percent) and non-minority 
rates (37 percent).

U.S. General Accounting Office (October 2003). Physician workforce: 
physician supply increased in metropolitan and non-metropolitan areas 
but geographic disparities persisted. Report to the Chairman, Committee 
on Health, Education, Labor, and Pensions, U.S. Senate. GAO-04-124. 
http://www.gao.gov/new.items/d04124.pdf.

    The GAO analyzed data on physician supply and geographic 
distribution from 1991 and 2001. The U.S. physician population 
increased 26 percent, which was twice the rate of total population 
growth, between 1991 and 2001. The average number of physicians per 
100,000 people increased from 214 to 239 and the mix of generalists and 
specialists in the national physician workforce remained about one-
third generalists and two-thirds specialists. Non-metropolitan counties 
with a large town (10,000 to 49,000 residents) had the biggest increase 
in physicians per 100,000 people of all county categories but their 
supplies were still less than large and small metropolitan counties in 
1991 and 2001.

Utah Medical Education Council, State of Utah. (2006). Utah 's 
physician workforce: a study on the supply and distribution of 
physicians in Utah.
http://www.utahmec.org/physicians.htm.

    The UMEC conducted a survey of all State licensed physicians. Of 
4,484 physicians working in Utah only 3,894 were active patient care 
providers. The characteristics of the Utah physician workforce mirror 
the national workforce. Over 55 percent of the physicians practicing in 
Utah had had some previous contact with the State. Only 12 percent of 
Utah physicians provide services to the 25 rural counties in the State. 
Utah will need to recruit up to 270 physicians per year to meet the 
projected demand.

Wisconsin Hospital Association and the Wisconsin Medical Society. 
(2004). Who will care for our patients? Wisconsin takes action to fight 
a growing physician shortage.
http://www.wha.org/physicianshortage3-04.pdf.

    There is a shortage of primary care physicians in rural Wisconsin 
and inner city Milwaukee. Non-primary specialty physicians are in 
demand and are hard to recruit on a statewide basis. General surgeons 
and radiologists are critically needed in rural areas. The unmet needs 
are projected to grow. By 2015, demand is expected to increase by 13.5 
percent for primary care physicians and 20 percent for all other 
physicians. Action plan: enroll students, develop new care delivery 
models, attract and retain physicians, enhance funding, create a 
medical education infrastructure.

APPENDIX D. RESOURCE LIST

Alaska Department of Health and Social Services, Office of the 
Commissioner, Health Planning and Systems Development, and University 
of Alaska Anchorage Center for Rural Health. (2006). Status of 
recruitment resources and strategies.
http://hss.state.ak.us/commissioner/healthplanning/publications.

Alexander, C., Fraser, J., Simpkins, B., Temperley, J. (2003). Health 
career promotion in the New England area of New South Wales: a program 
to support high school career advisers. Australian Journal of Rural 
Health, 11(4):199-204.

American Academy of Family Physicians. Rural practice, keeping 
physicians in. (Position Paper). (Retrieved 6/7/2006).
http://www.aafp.org/online/en/home/policy/policies/r/
ruralpracticekeep.html.

American Medical Association, Center for Health Policy Research. 
(2003). Physician socioeconomic statistics 2001, Tables 13 and 14.

Association of American Medical Colleges, Center for Workforce Studies. 
(2006). Key Physician Data by State. http://www.aamc.org/workforce/
statedata.pdf.

Association of American Medical Colleges. (2004). COGME report predicts 
physician shortage. http://www.aamc.org/newsroom/reporter/nov04/
cogme.htm.

Association of American Medical Colleges. (2004). Rural medicine 
programs aim to reverse physician shortage in outlying regions.
http://www.aamc.org/newsroom/reporter/nov04/rural.htm.

Association of American Medical Colleges. (2006). Notes from conference 
May 4-5, 2006. Physician Workforce Research Conference: 2020 Vision--
Focusing on the Future.

Bacon T.J., Baden D.J., Coccodrilli L.D. (2000). The national area 
health education center program and primary care residency training. 
Journal of Rural Health, 16(3):288-294.

Barrans, D. (2006). Alaskan participation in the WICHE professional 
student exchange program. Memorandum to members of Alaska Physician 
Supply Task Force. Alaska Advantage Programs, Alaska Commission on 
Postsecondary Education.

Booker, J.M., Garrett, C. and Helmuth, B. (1995). A survey of primary 
care providers in Alaska.

Boulger J.G. (2000). Stability of practice location among UMD family 
physicians in Minnesota. Minnesota Medicine. 83(2):48-50.

Bowman, R.C. (2005). Bright future rankings. University of Nebraska 
Medical Center. www.unmc.edu/Community/ruralmeded/bright	future	
rankings.htm.

Bowman, R.C. (2005). Flawed physician workforce ``beliefs.'' University 
of Nebraska Medical Center.
www.unmc.edu/Community/ruralmeded/flawed	physician	workforce.htm.

Bowman, R.C. (2005). Medical school expansion 2004-2017. University of 
Nebraska Medical Center.
www.unmc.edu/Community/ruralmeded/expansion	medical	schools.htm.

Bowman, R.C. Physician distribution in the United States. University of 
Nebraska Medical Center. (Retrieved 4/5/2006)
www.unmc.edu/Community/ruralmeded/physician	distribution	in	the	us.htm.

Bowman, R.C. (2005). Ranking medical schools and FP residency programs. 
University of Nebraska Medical Center.
http://www.unmc.edu/Community/ruralmeded/ranking	rural.htm.

Casey, B.R, Jones, J., Gross, D.A., Dixon, L. (2004). Rural Kentucky's 
physician shortage: strategies for producing, recruiting and retaining 
primary care providers within a medically underserved region. Revised 
for publication in the Journal of the Kentucky Medical Association, 
September 2005. University of Kentucky, Center for Rural Health.
http://www.mc.uky.edu/RuralHealth/Research/WhitePaperJKMArvsd.pdf.

Cejka Search. (2005). Physician shortage assessments should reflect 
economics rather than demographics. http://www.cejkasearch.com/news/
default.htm.

Center for Health Policy, Research & Ethics. (2000). The National 
Health Service Corps: ``essential'' but unseen. George Mason 
University, Fairfax, Virginia.

Center for Health Workforce Studies, University at Albany, State 
University of New York. (2004). California physician workforce: supply 
and demand through 2015.
http://www.ucop.edu/healthaffairs/reports/Final%20Report%20-
%20California%20Physician%20Workforce	12	20042.pdf.

Chan, B.T.B., Degani, N., Chrichton, T., Pong, R.W., Rourke, J.T., 
Goertzen, J., McCready, B. (2005). Factors influencing family 
physicians to enter rural practice. Canadian Family Physician, vol. 51.
http://www.cfpc.ca/cfp/2005/Sep/vol51-sep-research-5.asp.

Chen, F.M., Fordyce, M.A, Hart, L.G. (2005). WWAMI physician workforce 
2005. WWAMI Center for Health Workforce Studies, Working Paper #98.
http://www.fammed.washington.edu/CHWS/reports/CHWSWP98%20Chen.pdf.

CHAP Directors' Association. (2001). Community health aide program 
update 2001: Alaska's rural health care at risk. Final report for the 
Alaska Native Health Board and the Association of Tribal Health 
Directors.

Cooper, R.A. (2004). Medicine and public issues: weighing the evidence 
for expanding physician supply. Annals of Internal Medicine, 141(9), 
705-711.
http://www.annals.org.

Cooper, R.A. (2002). There's a shortage of specialists. Is anyone 
listening? Academic Medicine, 77 (8), 761-766.

Cooper, R.A., Getzen, T.E., Laud, P. (2003). Economic expansion is a 
major determinant of physician supply and utilization. Health Services 
Research, 38(2).

Cooper, R.A., Getzen, T.E., McKee, H.J., Laud, P. (2002). Economic and 
demographic trends signal an impending physician shortage. Health 
Affairs, 21(1), 140-154.

Council on Graduate Medical Education. (1998). Tenth report: physician 
distribution and health care challenges in rural and inner-city areas.
http://www.cogme.gov/rpt10.htm.

Council on Graduate Medical Education. (2005). Sixteenth report: 
physician workforce policy guidelines for the United States, 2000-2020.
http//www.cogme.gov/pubs.htm.

Council on Graduate Medical Education. (2005). Seventeenth report: 
minorities in medicine: an ethnic and cultural challenge for physician 
training.
http://www.cogme.gov/17thReport/17.htm.

Elder N, Taylor A, Anderson CE, Virgin R. (1997). Health career 
orientation of Oregon high school students. Family Medicine, 29(2):108-
11.

Foster, M, Goldsmith, S. (2006). Alaska's $5 billion health care bill--
who's paying? Understanding Alaska: UA Research Summary No. 6, 
Institute of Social and Economic Research, University of Alaska, 
Anchorage.
http://www.alaskaneconomy.uaa.alaska.edu.

Green, L.A., Phillips, R.L. (2005). The family physician workforce: 
quality, not quantity. American Family Physician, 71 (12), 2248-2253. 
http://www.aafp/org/afp.

Grumbach K., Coffman, J.M., Young, J.Q., Vranizan, K., Blick, N. 
(1998). Physician supply and medical education in California: a 
comparison with national trends. University of California, San 
Francisco, Medical School, Department of Family and Community Medicine.
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1304984.

Grumbach, K., Coffman, J., Liu, R., Mertz, E. (1999). Strategies for 
increasing physician supply in medically underserved communities in 
California. California Policy Research Center Brief Series, Center for 
California Health Workforce Studies.
http://www.ucop.edu/cprc/MDsupply.html.

Hager, C., Update on NCHWA Models and Activities. PowerPoint 
Presentation. National Center for Workforce Analysis, Bureau of Health 
Professions, HRSA. (6/1/2006).

Hagopian, A., Thompson, M.J., Kaltenbach, E., Hart, L.G. (2003). Health 
departments' use of international medical graduates in physician 
shortage areas. Health Affairs, 22 (5), 241-249.

Schneeweiss, R., Henderson, T.M. and Rosenblatt, R.A. (2005). Pathways 
to rural practice: a chart book of family medicine residency training 
locations and characteristics. http://www.ask.hrsa.gov/
detail.cfm?PubID=ORHP00324.

Henderson, T.M. (2003). Medicaid direct and indirect graduate medical 
education payments: a 50-state survey. Association of American Medical 
Colleges.
http://www.aamc.org.

Heyman, D., (Ed.), Kiley, D. (Hartig Fellow). (2005). Alaska primary 
health care: opportunities and challenges. Commonwealth North. 
www.commonwealthnorth.org.

Institute of Medicine of the National Academies, Committee on the 
Future of Rural Health Care. (2005). Quality through collaboration: the 
future of rural health care.

Foster, M. and Goldsmith, S. (2006). Alaskan's $5 billion health care 
bill--who's paying? Understanding Alaska. Institute of Social and 
Economic Research, University of Alaska Anchorage. UA Research Summary 
No, 6.
www.uaa.alaskaneconomy.uaa.alaska.edu.

Jones A, Oster R, Pederson L, Kidd-Davis M, Blumenthal D. (2000). 
Influence of a Rural Primary Care Clerkship on Medical Students' 
Intentions to Practice in a Rural Community. The Journal of Rural 
Health, 16(2): 155-161.

Lewin Group. (2006). Data and methods for forecasting physician demand. 
2006 AAMC Pre-conference Session presented by Tim Dall, May 3, 2006.

Massachusetts Medical Society. (2005). Physician workforce study.
http://www.massmed.org.

National Rural Health Association. (1998). Physician recruitment and 
retention. Issue paper for NRHA.
http://www.nrharural.org/advocacy/sub/issuepapers/ipaper13.html.

National Rural Health Association. (2005). Recruitment and Retention of 
a Quality Health Workforce in Rural Areas. NRHA Issue Paper. http://
www.nrharural.org/advocacy/sub/issuepapers/ipaperl3.html

National Rural Recruitment and Retention Network (3RNet). (2006).
http://www.3RNet.org.

Neill J, Taylor K. (2002). Undergraduate nursing students' clinical 
experiences in rural and remote areas: recruitment implications. 
Australian Journal of Rural Health, 10(5):239-243.

Pathman, D.E., Konrad, T.R., King. T.S., Taylor, D.H., Koch, G.G. 
(2004). Outcomes of states' scholarship, loan repayment, and related 
programs for physicians. Medical Care, 42(6).

Physician Compensation Report. (2003). COGME favors slow growth in med 
schools, residencies.

Rabinowitz, H, Diamond, J, Veloski, J.J., & Gayle, J.A. (2000). The 
impact of multiple predictors on generalist physicians' care of 
underserved populations. American Journal of Public Health, 90(8): 
1225-1228.

Rabinowitz, H.K., Diamond, J.J., Markham, F.W., Hazelwood, C.E. (1999). 
Physician Shortage Area Program (PSAP). Jefferson Medical. Journal of 
the American Medical Association, College 281:255-260.

Ramsey, P.G., Coombs J.B., Hunt D.D. (2001). From concept to culture: 
the WWAMI Program at the University of Washington School of Medicine. 
Academic Medicine, 76(8):756-778.

Ricketts, T.C. (2005). Workforce issues in rural areas: a focus on 
policy equity. American Journal of Public Health, 95, 42-48.
http://www.ajph.org/cgi/content/abstract/95/1/42.

Rockey, P.H. (2005). Fixing the U.S. Physician Shortage Requires many 
More Slots for Resident Physicians in Training. Retrieved 5/31/06. 
Medscape General Medicine Webcast Video Editorial, posted May 22, 2005.
http://www.medscape.com/viewarticle/532152?src=mp.

Rosenblatt, R.A., Andrilla, C.H.A., Curtin, T., and Hart, L.G. (2006). 
Shortages of medical personnel at community health centers: 
implications for planned expansion. Journal of the American Medical 
Society. 295(9): 1042-1049.

Salsberg, E. (2004). Council on Graduate Medical Education (COGME), 
AAMC Center for Workforce Studies.

Scalise, D. (2005). Physician supply 2005. Hospitals and Health 
Networks, 79(11):59-65.

Schiff, E. (2006). Preparing the health workforce. Issue Paper for 
Secretary of Education's Commission of the Future of Higher Education.

Southworth, M. (2004). Alaskan's physician workforce: an overview, a 
summary of training backgrounds, and the impact of the WWAMI program. 
Thesis submitted for degree of Master of Public health, University of 
Washington.

Taylor, P. Utah links Federal funding for graduate medical education to 
State's physician workforce needs. Publication produced for U.S. 
Department of Health and Human Services, Health Resources & Services 
Administration, Office of Rural Health Policy. http://
ruralhealth.hrsa.gov/pub/UtahGME.asp. Retrieved March, 2006.

The U.S. News and World Report. (2006). America's best graduate 
schools, 2007 edition. http://www.usnews.com/usnews/edu/grad/rankings/
med/brief/mdprank	brief.php.

U.S. Department of Health and Human Services, Health Resources and 
Services Administration, Bureau of Health Professions, National Center 
for Health Workforce Analysis. (2003). Changing demographics: 
implications for physicians, nurses, and other health workers. http://
bhpr.hrsa.gov/healthworkforce/reports/changedemo/default.htm.

U.S. Department of Health and Human Services, Health Resources and 
Services Administration Bureau of Health Professions, National Center 
for Health Workforce Analysis. (2005). Public health workforce study.
http://bhpr.hrsa.gov/healthworkforce/reports/publichealth/default.htm.

U.S. Department of Health and Human Services, Health Resources and 
Services Administration, Bureau of Health Professions, National Center 
for Health Workforce Analysis State Health Workforce Profiles 
Highlights Alaska. The Alaska health workforce: highlights from the 
health workforce profile. Retrieved 12/21/05.
http://bhpr.hrsa.gov/healthworkforce/reports/statesummaries/alaska.htm.

U.S. Department of Health and Human Services, Health Resources and 
Services Administration, National Health Service Corps. (2006). Site 
development manual.
http://nhsc.bhpr.hrsa.gov/resources/SDM-toc.asp.

U.S. General Accounting Office. (2003). Physician workforce: physician 
supply increased in metropolitan and non-metropolitan areas but 
geographic disparities persisted. Report to the Chairman, Committee on 
Health, Education, Labor, and Pensions, U.S. Senate. GAO-04-124.
http://www.gao.gov/new.items/dO4124.pdf.

Utah Medical Education Council, State of Utah. (2006). Utah 's 
physician workforce: a study on the supply and distribution of 
physicians in Utah.
http://www.utahmec.org/physicians.htm.

Western Interstate Commission for Higher Education. (2006). 
Opportunities for undergraduate study available to residents of 
participating western States WUE Western Undergraduate Exchange 2006-
2007 Bulletin. http://www.wiche.edu/sep/wue.

Wisconsin Hospital Association and the Wisconsin Medical Society. 
(2004). Who will care for our patients? Wisconsin takes action to fight 
a growing physician shortage.
http://www.wha.org/physicianshortage3-04.pdf.

Williams, G. (2005). Population projections: projections for Alaska 
population 2005-2029. Alaska Economic Trends, February 2005.
http://labor.state.ak.us/trends/feb05.pdf.

Williams, G. (2005). Alaska Department of Labor & Workforce Development 
releases State, borough and place 2005 population. Media Release AKDOL 
No. 06-30, January 25, 2006.
http://almis.labor.state.ak.us/?PAGEID=67&SUBID=171.

Wright, G.E., Andrilla, C.A. and Hart, G.L. (2001). How many physicians 
can a rural community support? WWAMI Rural Health Research Working 
Paper #45. University of Washington, School of Medicine, Department of 
Family Medicine.
http://depts.Washington.edu/uwrhrc/.

WWAMI Rural Health Research Center. (2005). Family physician vacancies 
in federally funded health centers. http://depts.washington.edu/
uwrhrc/.
APPENDIX E. INDIVIDUAL CONTRIBUTORS, PERSONS CONSULTED, COMMENTERS, 
REVIEWERS, AND PERSONS WHO ATTENDED TASK FORCE MEETINGS

Diane Barrans, Executive Director, Alaska Commission on Post-Secondary 
    Education

John F. Bringhurst, CEO, Petersburg Medical Center

Liz Connell, Legislative Assistant, Office of Senator Ted Stevens

John Coombs, MD, MNS, University of Washington School of Medicine, 
    WWAMI

Paul Davis, MD, Alaska Family Medicine Residency

Gar Elison, Executive Director, and staff, Utah Medical Education 
    Council

Leslie Gallant, Executive Administrator, Alaska State Medical Board

Tim Gilbert, MPH, Alaska Native Tribal Health Consortium

Jan Harris, MA, MSHA, UAA, School of Nursing

Gary Hart, Ph.D., Fred Chen, MD, Eric Larson, Ph.D., UW Rural Health 
    Research Center

Tom Hunt, MD, Medical Director, Anchorage Neighborhood Health Center

Marilyn Kasmar, RNC, MBA, Executive Director, Alaska Primary Care 
    Association, and staff members Pat Fedrick and Richard Moore, PA-C

Beth Landon, MBA, MHA, Director, Alaska Center for Rural Health

Peter Marshall, MD, private practice, North Pole. Chairman, Alaska 
    WWAMI 
    Admissions Committee

Kathy Murray, BA, MLS, AHIP, UAA Health Sciences Library

Richard L. Neubauer, MD, Internal Medicine

Tom Nighswander, MD, WWAMI Program and ANMC

Theresa and Tom Obermeyer, JD, Anchorage

Byron Perkins, D.O., Association President, Alaska Osteopathic Medical 
    Association

Tom Ricketts, Ph.D., University of North Carolina, Sheps Center

John Riley, MS, PA-C, Alaska MEDEX Program

Meredith Sumpter, Legislative Correspondent, Office of Lisa Murkowski

Leif Thompson, MD, Bristol Bay Area Health Corporation

Suzanne Tryck, Alaska WWAMI Coordinator

APPENDIX F. ACRONYM LIST





3RNET.....................................  Rural Recruitment and
                                             Retention Network
AA........................................  Active License Status
AAHC......................................  Alaskans for Access to
                                             Health Care (ACCESS)
AAMC......................................  Association of American
                                             Medical Colleges
ACRH......................................  Alaska Center for Rural
                                             Health
AFMR......................................   Alaska Family Medicine
                                             Residency
AHEC......................................  Area Health Education Center
AKDHSS....................................  Alaska Department of Health
                                             and Social Services
AKOMA.....................................  Alaska Osteopathic Medical
                                             Association
AMA.......................................  American Medical Association
ANMC......................................  Alaska Native Medical Center
ANTHC.....................................  Alaska Native Tribal Health
                                             Consortium
APCA......................................  Alaska Primary Care
                                             Association
APCO......................................  Alaska Primary Care Office
ASHNA.....................................  Alaska State Hospital and
                                             Nursing Home Association
ASMA......................................  Alaska State Medical
                                             Association
AP&S......................................  Alaska Physicians and
                                             Surgeons
BHPr......................................  Bureau of Health Professions
CEO.......................................   Chief Executive Officer
CEU.......................................  Continuing Education Units
CHC.......................................  Community Health Center
COGME.....................................  Council of Graduate Medical
                                             Education
DHSS......................................  Department of Health and
                                             Social Services
DO........................................  Doctor of Osteopathy
FTE.......................................  Full Time Equivalent
GDP.......................................  Gross Domestic Product
GME.......................................  Graduate Medical Education
GMENAC....................................  Graduate Medical Education
                                             National Advisory Committee
HMO.......................................  Health Maintenance
                                             Organization
HPSA......................................  Health Professional Shortage
                                             Area
HPSD......................................  Health Planning and Systems
                                             Development
HRSA......................................  Health Resources and
                                             Services Administration
IHS.......................................  Indian Health Service
LRP.......................................  Loan Repayment Program
MD........................................  Allopathic Physician
MMS.......................................  Massachusetts Medical
                                             Society
MNS.......................................  Master in Nutritional
                                             Science
MPH.......................................  Masters in Public Health
MUA.......................................  Medically Underserved Areas
NHSC......................................  National Health Service
                                             Corps
OHSU......................................  Oregon Health and Science
                                             University
PSAP......................................  Physician Shortage Area
                                             Program
PSEP......................................  Professional Student
                                             Exchange Program
R/UOP.....................................  Rural/Underserved
                                             Opportunities Program
SEARCH....................................  Student/Resident Experiences
                                             and Rotations in Community
                                             Health
SLRP......................................  State Loan Repayment Program
UA........................................  University of Alaska
UAA.......................................  University of Alaska
                                             Anchorage
U.S. DHHS.................................  United States Department of
                                             Health and Human Services
WICHE.....................................  Western Interstate
                                             Commission on Higher
                                             Education
WWAMI.....................................  Washington, Wyoming, Alaska,
                                             Montana, and Idaho
                                             (regional school of
                                             medicine based at the
                                             University of Washington)


    (For more information on Securing an Adequate Number of Physicians 
for Alaska's Needs, a Report of the Alaska Physician Supply Task Force, 
contact: Pat Carr, Health Planning and Systems Development, (907) 465-
8618, pat	[email protected] This report is also available on the 
Web: http://www.hss.state.ak.us/commissioner/PhysicianSupply.htm.)

    [Whereupon, at 12:00 p.m., the hearing was adjourned.]