The publicly operated health plan will pay for scholarships, loan repayments, and recruiting costs for primary care doctors serving Los Angeles County's safety net.
L.A. Care Health Plan will honor eight students this Thursday as the first group to receive full medical scholarships through the plan's $31 million initiative to provide more primary care physicians for the county's underserved populations.
The scholarships program is one of three grant initiatives sponsored by L.A. Care, which will also offer loan repayment for primary care physicians who agree to serve safety net populations, and which will underwrite recruiting costs for safety net clinics.
John Baackes, CEO of L.A. Care Health Plan, the nation's largest public-operated health plan, spoke with HealthLeaders Media about the initiative.
The following is an edited transcript.
HLM: This $31 million is over how many years?
Baackes: It's $31 million this year and we will repeat that for perhaps five years and segregate the money into a board-designated fund. I do not know what the draw on this will be in terms of people applying for it. My hope is that we don't spend it all in the first year, that it sits there and we create an endowment so this can go on for more than five years.
HLM: Why $31 million?
Baackes: We looked at a similar program done in San Bernardino and Riverside County through Inland Empire Health Plan, and over four years they spent $31 million and added 230-some-odd providers to the county.
We are much bigger of a county than San Bernardino, and the deficiencies at the primary care level we know now it's about 9,000 statewide. Martin Luther King did a survey of their catchment area, which is representative of the communities most of our members live in, and we said let's use that number.
We're taking it out of unassigned reserves, which sit at about $477 million. We said let's segregate that amount and see what the demand is and if we're able to continue to operate at the margins we've got over the next few years, we would be able to do similar set-asides in future years. It wasn’t very scientific but it segregates the funds and now we can start the program.
HLM: Who is eligible?
Baackes: There are three elements to the program. The first one of immediate importance is that we will offer grants of up to $125,000 to organizations that employ primary care physicians that would be in our network. In other words, they are working for organizations that will serve the uninsured and other vulnerable populations. That would include every federally qualified health center that contracts with us, all Department of Health services, primary care clinics around the county, and any medical group that is contracted for the Medi-Cal population. They can apply for these funds.
So, there is the grant that goes to the organization that employs the physician. Then, we assume those physicians will also have medical school debt. We will also do payoff the loan and we will do that through our grant to a third-party organization that makes the loan payments on behalf of the student, so the student doesn't have a tax consequence.
Under the loan repayment arrangement, we want them to stay for three years. We will pay off the whole thing in monthly payments. If they leave before the three years is up, we will only have paid the monthly payments up until they time they leave. So, it's an enticement to get them to stay.
We're also trying to build a pipeline for the future. We have medical schools here in L.A. County, so we would like to support those medical schools by offering scholarships to students who commit to coming back to L.A. after they have their licensing and are practicing. We are doing eight scholarships and the students have already been picked who are coming in this year. They understand it is a free ride and they've made the commitment.
HLM: Why only primary care physicians?
Baackes: There is a demand for specialists and mid-levels. But if you don't have the primary care doctors, who are central to the Medi-Cal program, it doesn't matter about the rest of it. So, for year one, to see what the demand is, we will limit this to primary care doctors who are new to L.A. County, or who are new to the safety net. We don't want organizations to hire doctors from across the street and have them steal a doctor from another safety net provider. That is not the point.
HLM: Do you have a target number of recruits?
Baackes: Between that and the loan repayment and scholarship programs we would hope to we can get 50 doctors a year brought into the system under this program.
HLM: Why a three-year commitment from physicians?
Baackes: In talking to the institutions that employ these doctors, they said they wouldn't hire anyone who wouldn't commit to at least three years because the cost and time it takes to recruit physicians is a big investment. We said we would match that expectation, and the grant will add some oomph to that in terms of adding to the doctors' commitment.
HLM: Are international students eligible?
Baackes: Absolutely! If they are a licensed physician. How they got the medical license is not a qualifier, as long as they can be credentialed into our system.
HLM: How will you measure this initiative's success?
Baackes: MLK, in their catchment area, determined that there was a shortage of about 600 primary care doctors. It's about getting the doctors into L.A. County and placing them in the geographies that are important. So, our measurement will be volume and placement in the correct geographic areas. We don't need more doctors in Beverly Hills. We need them in South L.A.
HLM: Why is it so difficult to get primary care physicians in these underserved areas?
Baackes: One of the biggest expenses these places have that they can't afford are the replacement costs. We said of that $30,000 or $40,000 for a recruiter, use part of the grant money to pay for that and use the rest to support the salary of the doctors. The doctor is going to get paid by the organization, but they are using our grant to help them do that.
The problem they're having is that when doctors are recruited in L.A. County, Kaiser Permanente outbids everybody. The safety net clinics cannot match Kaiser's salary and benefits. Or, they can't match the teaching institutions that might hire these doctors to be in their clinics. So, if this allows that organization to boost the salaries so they can compete, then great! We've done some good.
John Commins is a senior editor at HealthLeaders.
Grants worth up to $125,000 are available to organizations that employ primary care physicians.
Physicians can have their medical school debt paid off in monthly installments.
Incoming medical students can apply for scholarships as part of the plan's effort to 'build a pipeline for the future.'