More than 100 Texas doctors made a deal with the state: For four years, they would practice in underserved communities and treat the neediest patients — in return for having their medical school debt forgiven. The source of the funding? An enhanced tax on smokeless tobacco.
But just a year into the arrangement, and facing a multibillion-dollar shortfall, state officials could be backing down on their side of the bargain — and directing the smokeless tobacco revenue to help balance the budget instead. With funding for the loan repayment program reduced in the Senate draft of the budget, and slashed altogether in the House version, doctors who signed contracts to work in far-off practices or who committed to low-pay, inner-city gigs could find themselves saddled with unexpected debt.
“It’s like they’re reneging on the agreement,” said Dr. Xavier Muñoz, who did his residency at the University of Texas Health Science Center at San Antonio and is now seeing mostly uninsured and underinsured patients in El Paso. “I agreed to do this not only because I like working with the underserved, but because it was a great offer. If I have to go back to paying my loans, I will probably have to move.”
Texas has offered some minimal loan repayment for years — but nothing that kept pace with the rising cost of tuition. Last session, lawmakers changed that, attaching the loan repayment program to an enhanced smokeless tobacco tax, and shepherding it over a bumpy road.
State Rep. Warren Chisum, R-Pampa, one of the bill's proponents, said it's far too early in the 2012-13 budget process to conclude that the program is dead or will be dramatically reduced. The tobacco tax will still be collected, he said, and it won't be spent for any other purpose than physician loan repayment — save for keeping the budget balanced. “We’re going to try to get as much of it released as we can,” Chisum said. “There’s no guarantee, but I can assure you the money won’t be diverted to another purpose.”
But for physicians who signed on for the four-year agreement, there’s no distinction between using the money to balance the budget or spending it on something else if it isn’t paying off their debt, up to $160,000 over four years. (The average U.S. medical student has $158,000 in debt upon graduation.)
In the last year, roughly 130 doctors have signed on to practice in so-called “health professional shortage areas” — communities where the ratio of patient to health care provider is more than 3,000-to-1. Many of those doctors relocated with the understanding that they would get $25,000 in loan repayment at the end of their first year — and more with each subsequent year, said Connie Berry, manager of the Department of State Health Services’ Primary Care Office.
As with any source of state funding, the devil’s in the details. The promise of the loan repayment came with an important caveat: It’s subject to availability. The comptroller’s office estimates the physician loan repayment program will bring in roughly $60 million over the next biennium. But with an estimated $15 billion to $27 billion budget shortfall, that money — either part or all of it — could be held in reserve to balance the budget instead.
But Sen. Juan “Chuy” Hinojosa, D-McAllen, said the state shouldn’t go back on its promise. Some doctors have sunk their money — and their lives — into practices and communities with mostly Medicaid patients; others have signed multiyear contracts with health clinics that serve the uninsured. Some might be able to walk away for better paying jobs; others will be unable to break their agreements. “When we create taxes, or raise fees for a specific purpose, we need to stick to our word,” Hinojosa said. “The objective has to be to encourage doctors to relocate to underserved communities.”
Don McBeath, director of advocacy for the Texas Organization of Rural and Community Hospitals, said he understands that lawmakers want to take sweeping action in a time of fiscal crisis but that to underfund, or simply not fund at all, doctors who are already in the program would be “irresponsible.”
“This is an example of where [lawmakers’] zeal to find some loose change in the budget will do long-term harm,” he said, “especially to the rural health infrastructure.”