National Health Service Corps

Opportunities to Stretch Scarce Dollars and Improve Provider Placement Gao ID: HEHS-96-28 November 24, 1995

The National Health Service Corps (NHSC) places physicians and other health care providers in underserved areas in exchange for scholarships or loan repayments for medical training. In recent years, funding for NHSC scholarships and loan repayments has soared nearly 10-fold, from about $8 million in fiscal year 1989 to nearly $80 million in fiscal year 1994. This report (1) compares the costs and benefits and the NHSC scholarship and loan repayment programs and (2) determines whether NHSC has distributed available providers to as many eligible areas as possible. GAO concludes that the loan repayment programs offers a better long-term investment of limited federal dollars. GAO also found that some areas receive more doctors and other health providers than needed while other areas suffer shortages of requested medical personnel.

GAO found that: (1) the loan repayment program costs less per year of obligated service, and loan recipients more often extend their service; (2) the scholarship program offers a better guarantee that providers will serve in the neediest shortage areas, since it gives recipients less freedom of choice in deciding where to serve; (3) scholarship recipients more often breach their contracts; (4) a provision allowing scholarship recipients to fulfill their obligations through research limits the program's effectiveness; (5) NHSC has allowed placement of more providers in an area than necessary to remove the area's shortage designation; (6) NHSC has trouble meeting needs in areas that request, but do not receive, NHSC providers, and in areas that face barriers to requesting providers; and (7) for 1996, NHSC intends to limit provider placements based on primary-care-physicians-to-population ratios, but will not consider the number of nonphysician providers in limiting placements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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