How Many Physicians Can a Rural Town Support?


This paper addressed the ability of smaller and underserved rural communities to financially support needed physicians. We used Washington State data to test the feasibility of constructing physician income potential models. The total spending for primary care physicians was estimated using age-sex-poverty status coefficients from the National Medical Expenditure Survey, supplemented by unique Part B Medicare data on the proportion of rural physician revenue from non-office based services. Community size and the distance to other cities and towns were crucial determinants of market share and thus the capacity of small towns to attract and support primary care practices. The distribution of physicians among towns followed predicted economic potential. That potential varied dramatically even among towns with similar populations due to the pull of competing locations for primary care. Surprisingly, the types of rural communities most likely to have fewer physicians than suggested by the projected potential were not small isolated towns, but larger communities with above-average population growth, closer proximity to metropolitan areas and somewhat lower average family incomes. Strategies such as the National Health Service Corps use a one-time “signing bonus” to overcome physicians’ initial reluctance to locate in an underserved area. An alternative approach is to address long-term income disadvantages by offering continuous subsidies such as the enhanced Medicare payments for certified Rural Health Clinics or the 10% Medicare supplemental payments for care provided in a HPSA.
This study was funded by HRSA’s Office of Rural Health Policy.



HRSA's Office of Rural Health Policy