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Tuition Assistance to Encourage Medical Graduates to Stay in State

Saddled with $200,000 in student loans, and facing NJ's high cost of living, most new doctors opt to practice elsewhere.

New Jersey is trying to retain more of the nearly 800 residents who graduate from its teaching hospitals each year. Those who leave do so in pursuit of higher salaries and a lower cost of living -- understandable, given that many launch their careers saddled with $200,000 or more in debt.

To help curtail this exodus, which is a particular problem for residents in family and internal medicine, several New Jersey teaching hospitals have started programs to help graduates repay their loans, as long as they opt to practice in the Garden State.

The Atlantic Health System, parent of Morristown, Overlook, and Newton medical centers, last year launched a program that repays a total of $100,000 of medical school debt over four years for newly minted doctors who practice primary care in areas served by the system’s hospitals. What's more, in the past several years Jersey City Medical Center has used financial incentives to recruit eight of its primary care residents to practice in the area. And Somerset Medical Center gives its residents $5,000 over two years to help them defray student loans.

David Knowlton, president of the New Jersey Health Care Quality Institute, said “This is exactly what they [the hospitals] should do. Good for them: this is a very positive thing and I would praise them for it. We have a primary care crisis in New Jersey because kids come out of medical school deep in debt.”

According to Deborah Briggs, president of the New Jersey Council of Teaching Hospitals, New Jersey residency programs graduate 800 new physicians per year. Approximately half seek additional training and the other half set up their clinical practices. Of those setting up clinical practice, approximately 250 move to another state to do so.

Help with medical school loans is also offered by the state of New Jersey, which for the past 20 years has provided repayment programs to primary care clinicians, including dentists, who can get up to $120,000 of their loans repaid by working four years in medically underserved areas like urban Essex and rural Cumberland Counties. The New Jersey Primary Care Practitioner Loan Redemption Program makes about a dozen grants a year.

Dr. Susan T. Kaye, a medical director at Atlantic Health System and chair for the Department of Family Medicine at Overlook, said the $100,000, four-year medical school loan repayment program is available to Atlantic’s family and internal medicine residents. There is currently no limit to the number of graduating residents who can take advantage of the program, which made its first payout last year and has enrolled seven physicians to date.

New Jersey doesn’t have enough primary care physicians -- the shortage is estimated at 1,500 and growing -- and the Atlantic program is aimed at building up the capacity of primary care, Kaye said.

“We are expanding our primary care physician base to meet the needs of the community we are serving,” she said. Several years ago, Atlantic looked into the difficulty it was having recruiting medical students into its family medicine residency programs “and an even harder time retaining them in our communities.”

Atlantic graduates six family medicine residents a year, and about 24 internal medicine residents, but many go on to become specialists rather than pursue a career in primary care.

“Clearly one of the difficulties with retention in the state of New Jersey is that it’s a very high cost-of-living state, so we were having a really hard time stabilizing and growing our primary care base,” Kaye said. “And we know from many studies that have been done that communities with a robust and active primary care base have better health care outcomes. So we understood that to serve our population and make sure we were meeting the needs of our patients we needed a robust and growing primary care base.”

According to Kay, Atlantic has an advantage because primary care physicians are among the 250 residents that it trains at any one time. “If we can retain them in our communities it will really meet the needs of the large patient population we service.”

Kaye said Atlantic was losing its residents to other states with generous loan repayment programs, although Atlantic’s loan repayment program has been embraced by the residents. “For a resident with a lot of student loans, it’s wonderful. I don’t think there is any question that it has increased our retention of our graduating residents. And it has been a marked success in terms of adding value to primary care as a career choice.”

John L. Bucek is director of graduate medical education at Somerset Medical Center, which for about the past eight years has provided its residents with $5,000 over two years to help repay their loans.

“I think it is enough money that people feel like it’s a nice gift. We don’t think that the amount of money changes people’s minds about coming to a residency in New Jersey, but we do think it eases the burden, considering how much they borrow.”

Bucek said Somerset provides the assistance because the medical center is able to do so, and wants to help its residents. The $100,000 in student loan debt that Bucek left medical school with in 1993 seemed like a huge sum at the time. “Now medical students have $200,000 or $270,000 in debt which is just an impossible amount of money. That is the principal; they also have to pay interest on it. Programs that will help them repay anything are helpful.”

Dr. Douglas Ratner, chairman of medicine and program director of the internal medicine residency at Jersey City Medical Center, said if there are too few physicians in a specialty within the medical center’s service area, and several other conditions are met, financial support can be offered to recruit physicians. JCMC has a robust internal medicine and OB-GYN residency program, and “we have been able to get eight of our graduates to come and stay in the area, which is something that is a tremendous plus for Jersey City.”

He said the healthcare sector has to make primary care a more attractive specialty, and noted that this is happening by shifting primary care to the patient-centered medical home model, where the physician can focus on improving quality and outcomes, and is compensated for achieving better results. “That really makes it much more interesting and attractive for residents who want to practice primary care and it will help turn the tide.”

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