Performance audit, Board of Medical Student Loans

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Auditor General
May 2000
Report No. 00-6
BOARD OF
MEDICAL STUDENT
LOANS
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. His mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, he provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Representative Roberta L. Voss, Chairman
Senator Tom Smith, Vice-Chairman
Representative Robert Burns Senator Keith Bee
Representative Ken Cheuvront Senator Herb Guenther
Representative Andy Nichols Senator Darden Hamilton
Representative Barry Wong Senator Pete Rios
Representative Jeff Groscost Senator Brenda Burns
(ex-officio) (ex-officio)
Audit Staff
Melanie Chesney—Manager
and Contact Person (602) 553-0333
Monique Cordova—Staff
William Parker—Staff
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, AZ 85018
(602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
May 25, 2000
Members of the Legislature
The Honorable Jane Dee Hull, Governor
Ms. Diane Brennan, Chairperson
Board of Medical Student Loans
Transmitted herewith is a report of the Auditor General, A Performance Audit of the
Board of Medical Student Loans. This report is in response to a June 16, 1999, resolution
of the Joint Legislative Audit Committee. The performance audit was conducted as part
of the Sunset review set forth in A.R.S. §41-2951 et seq. I am also transmitting a copy of
the Report Highlights to provide a quick summary for your convenience.
As outlined in its response, the Board of Medical Student Loans agrees with all of the
findings and recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on May 26, 2000.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
OFFICE OF THE AUDITOR GENERAL
Program Fact Sheet
Board of Medical Student Loans
Services: The Board of Medical Student Loans recruits physicians to serve in medically
underserved areas in Arizona by providing educational loans to medical students who
agree to practice in rural and other medically underserved areas of the State. The Board’s
responsibilities include: 1) investigating each loan applicant’s ability, character, and qualifi-cation;
2) granting loans to medical students; 3) collecting and maintaining data on students
and doctors who have received loans; and 4) determining the number of doctors who con-tinue
to work in rural and medically underserved areas after completing service obligations.
Revenues: $300,500 (Fiscal Year 2000
est.)
Two major revenue sources: 1) General
Fund; and 2) Medical Student Loan
Fund Repayments.
Fiscal Year 1998: $340,100
Fiscal Year 1999: $254,600
Fiscal Year 2000: $300,500
$286,200
$53,900
$239,000
$15,600
$276,400
$24,100
$0
$100,000
$200,000
$300,000
$400,000
Fiscal Year 1998 Fiscal Year 1999 Fiscal Year 2000
State General Fund Loan Repayments
Facilities: The Board own no facilities.
Board meetings are held at the University
of Arizona College of Medicine in Tuc-son,
Arizona.
Equipment: The Board owns no equip-ment.
Personnel: 0 full-time staff
The Board of Medical Student Loans
consists of eight members who are
appointed to four-year terms:
n Two doctors who are appointed
by the Chairman of the Allo-pathic
Board of Medical Examin-ers;
n One licensed osteopathic doctor
appointed by the Board of Os-teopathic
Examiners in Medicine
and Surgery;
n Three members appointed by the
Governor who are knowledge-able
about Arizona’s health care
problems;
n One staff member of the Univer-sity
of Arizona College of Medi-cine
who is appointed by the
University’s president; and
n The Director of the Department
of Health Services or a designee
who acts as an ex officio, non-voting
Board member.
OFFICE OF THE AUDITOR GENERAL
Agency Mission:
“To recruit physicians to
serve in medically under-served
areas in Arizona
by providing substantial
funding in educational
loans to students at col-leges
of medicine in Ari-zona.”
Program Goals (Fiscal Year 2000-
2001)
1. To successfully recruit and retain
students to participate in the program
by providing substantial funding of
their educational costs.
2. To provide physicians to medically
underserved areas in Arizona.
3. To increase the number of physicians
providing service in medically under-served
areas in Arizona.
Adequacy of Performance Measures:
Although the Board of Medical Student
Loan’s three goals appear to be reasona-bly
aligned with its mission, our review
of its performance measures identified
the following problem:
Ü The Board’s performance measures
do not include an outcome measure
for recruiting and retaining students
to participate in the program.
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OFFICE OF THE AUDITOR GENERAL
SUMMARY
The Office of the Auditor General has conducted a performance
audit and Sunset review of the Board of Medical Student Loans
(Board) pursuant to a June 16, 1999, resolution of the Joint Leg-islative
Audit Committee. This audit was conducted under the
authority vested in the Auditor General by Arizona Revised
Statutes §§41-2951 through 41-2957.
The Board of Medical Student Loans was established in 1977 to
provide financial assistance to Arizona medical students who
are residents of the State and agree to practice in rural and other
medically underserved areas after completing medical school
and residency training. In return for each year spent in a rural
or medically underserved location, the State forgives one year’s
worth of loans. Since the program’s inception, 118 students
have received loans.
Changes to Board’s Statutes Could
Help Clarify Service Area and
Retention Tracking Requirements
(See pages 11 through 18)
Changes are needed to clarify the kinds of locations where loan
recipients can fulfill their service obligation. Although state law
requires loan recipients to fulfill this obligation in rural and
other medically underserved areas as designated by the Ari-zona
Department of Health Services (Department), the Board
has approved a doctor’s practice at a location that is neither
rural nor a designated underserved area. The Board had good
intentions when it approved the service location, which is a
nonprofit health facility in Mesa that serves indigent and
working poor individuals who are uninsured and who have
drug and alcohol problems. However, if the Board wants
greater flexibility to approve service locations that do not meet
the Department’s criteria for being designated as underserved,
it should request that the Legislature amend its statutes.
Doctors must serve in
rural and other medically
underserved areas.
Summary
ii
OFFICE OF THE AUDITOR GENERAL
A second problem with service area requirements is that the
Board’s statutes do not define “rural,” making it difficult to de-termine
which locations that are not medically underserved
qualify as acceptable rural placements for loan recipients. Cur-rently,
the Board has approved four doctors to work in Prescott,
Flagstaff, Lake Havasu City, and Benson, which are not medi-cally
underserved areas but could be considered rural under
some definitions of the term, although not under others. The
Legislature should amend the Board’s statutes to define “rural”
or give the Board rule-making authority to adopt a definition of
the term.
Although statutes require the Board to collect data on how long
doctors continue to work in rural or underserved areas after
finishing their minimum obligations, they do not specify how
long the Board should continue these tracking efforts. The Leg-islature
should specify a time period in statute to track retained
doctors.
Changes in Applicant Selection
Process Needed to Ensure Equal
Consideration of All Students
(See pages 19 through 23)
The Board should make changes to its applicant selection proc-esses
to ensure continued fair and equal consideration of all
eligible candidates. A 1999 legislative change expanded pro-gram
eligibility to allow students from both public and private
medical schools to be eligible for loans. Previously, only Uni-versity
of Arizona College of Medicine Students were eligible;
however, the expansion also allows students from Arizona’s
only private medical school, Midwestern University’s Arizona
College of Osteopathic Medicine, to apply for loans.
Although the Board has begun to make changes to accommo-date
eligible applicants from the private osteopathic school,
additional changes to the applicant selection process could help
ensure that all applicants are considered fairly and equally for
funding.
n First, to ensure that the program’s requirement for Arizona
residency applies equally to all applicants, the Legislature
Osteopath students can
now apply for loans.
Summary
iii
OFFICE OF THE AUDITOR GENERAL
should add a definition of Arizona resident to the Board’s
statutes.
n Second, the Board should develop and use standard inter-view
instruments to guide the interview process.
n Finally, the Board should adopt a scoring system to help
evaluate and rank applicants for funding consideration. The
Board has indicated that it has already begun to develop an
evaluation tool that all interviewers will use to evaluate and
score applicants.
Other Pertinent Information
(See pages 25 through 31)
In addition to assessing the Board’s performance, auditors
gathered information on other state and federally funded pro-grams
that exist in Arizona to attract and recruit health profes-sionals
to work in rural and medically underserved areas. Some
programs offer financial assistance to students and health care
professionals in exchange for service in medically underserved
areas. Other programs provide education and clinical training,
job placement assistance to student and health care profession-als,
and employment opportunities.
iv
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v
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TABLE OF CONTENTS
Page
Introduction and Background..................... 1
Finding I: Changes to Board’s
Statutes Could Help Clarify
Service Area and Retention
Tracking Requirements .......................... 11
State Law Requires
Service in Rural and
Medically Underserved Areas................................ 11
Board Has Approved An
Inappropriate Service Site ....................................... 13
Board’s Statutes
Do Not Define “Rural”............................................ 14
Retention Tracking
Requirements
Need Clarification.................................................... 16
Recommendations ................................................... 18
Finding II: Changes in Applicant
Selection Process Needed
To Ensure Equal Consideration
for All Students........................................ 19
Legislative Change
Increases Eligibility and
Competition for Funding ........................................ 19
Changes in Selection Process
Needed to Ensure Equity ........................................ 20
Recommendations ................................................... 23
Table of Contents
vi
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (Concl’d)
Page
Other Pertinent Information ........................ 25
Existing Health
Professional Recruitment
Programs................................................................... 25
Possible Changes Affecting
Recruitment Programs............................................. 30
Sunset Factors ............................................. 33
Appendix ....................................................... a-i
Agency Response
Tables and Figure
Table 1 Board of Medical Student Loans
Status of Program Participants
As of June 30, 1999 ................................. 3
Table 2 Board of Medical Student Loans
Statement of Revenues, Expenditures,
and Changes in Fund Balance
Years Ended or Ending June 30, 1998,
1999, and 2000
(Unaudited)............................................ 8
Table 3 Board of Medical Student Loans
Health Professional Scholarship and
Loan Repayment Programs................... a-i
Table 4 Board of Medical Student Loans
Health Professional Education, Training,
Recruitment, and Employment
Programs................................................. a-v
Figure 1 Board of Medical Student Loans
Locations of Doctors Currently Serving
As of February 29, 2000.......................... 5
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OFFICE OF THE AUDITOR GENERAL
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance
audit and Sunset review of the Board of Medical Student Loans
(Board) pursuant to a June 16, 1999, resolution of the Joint Leg-islative
Audit Committee. This audit was conducted under the
authority vested in the Auditor General by Arizona Revised
Statutes §§41-2951 through 41-2957.
Board Responsibilities
The Board of Medical Student Loans was created in 1977 to re-cruit
doctors to provide services to medically underserved ar-eas
in Arizona. The Board recruits doctors by providing educa-tional
loans to medical students who agree to practice in rural
and other medically underserved areas of the State. Under
A.R.S. §§15-1721 through 15-1726, the Board’s responsibilities
include:
n Granting Loans—The Board may grant loans to medical
students to defray the expenses of their medical education.
The Board is required to investigate each applicant’s ability,
character, and qualification to determine his or her fitness to
become a loan recipient. The Board reviews a written appli-cation
and the results of applicant interviews conducted by
representatives from the Department of Health Services and
the medical schools. Although statutes allow the Board to
fund up to 40 students per year, the level of appropriations
in recent years has limited the number to 16 students each
year. In each of the past 3 years, the Board has funded 4 to 6
new students per year and renewed 11 to 12 students’
funding.
n Collecting and Maintaining Data—The Board collects and
maintains data on the doctors who received loans and con-tinue
to work in rural and other medically underserved ar-eas
after completing service requirements. In fiscal year
1999, the Board maintained data on 118 current and former
loan recipients.
Introduction and Background
2
OFFICE OF THE AUDITOR GENERAL
Allopathic schools of medicine grant
a doctor of medicine (MD) degree
and colleges of osteopathic medicine
in the United States grant a doctor of
osteopathy or (DO) degree. Both
degrees require study of the medical
sciences and participation in clinical
rotations. Additionally, the DO cur-riculum
emphasizes the relationship
of body systems and holistic patient
care. After graduation from medical
school, both medical doctors and
osteopathic physicians undertake an
additional 3 to 7 years of medical
residency training in a medical spe-cialty.
Program Requirements
A.R.S. §15-1723 authorizes the Board to grant loans to Arizona
medical students who are residents of the State and agree to
practice in rural and other medically underserved areas after
completing medical training. Students at public and private
medical schools in Arizona who intend to practice in the areas
of family practice, pediatrics, obstetrics, or internal medicine
may apply for the loans. Statutes require the Board to give pref-erence
to applicants who are not able to pay the cost of a medi-cal
education and to applicants who demonstrate a commit-ment
to serve in rural and medically underserved areas. Stu-dents
reapply for loans annually and may be funded for up to
four years.
Students who receive loans sign contracts agreeing to practice
in approved areas of Arizona for one year for each year they
accept funding, with a two-year
minimum service obligation. The
State forgives the loans on a year-for-
year basis if recipients practice
in approved areas of the State as
designated by the Department of
Health Services. After completing
residency training, a loan recipient
initiates a self-directed search for
employment in a rural or medically
underserved area, and requests the
Board to approve service locations.
If a student does not fulfill his/her
service obligation, the Board may
require repayment of the loan
amount plus 7 percent interest and
a penalty equal to the loan amount.
The Board adjusts loan amounts annually based on a statutory
formula that provides the cost of tuition charged by the Univer-sity
of Arizona College of Medicine plus $10,000, adjusted for
inflation. During school year 1999-2000, the loan amount is
$20,550 per student.
Students agree to practice
in primary care speciali-ties
such as family prac-tice.
Introduction and Background
3
OFFICE OF THE AUDITOR GENERAL
As noted in Table 1, 118 medical students had received funding
from the Board of Medical Student Loans as of June 30, 1999.
Doctors’ Current
Service Locations
Ten doctors are currently fulfilling their service obligations
throughout Arizona, as illustrated in Figure 1 (see page 5). Most
of the doctors who are currently serving received loans prior to
a 1992 law change that limited the program to primary care.
Board records indicate that at least three doctors are not pri-mary
care doctors—a general surgeon, a pathologist, and a psy-chiatrist.
The doctors serve both urban and rural populations
and Native Americans. Current placements include:
Ten doctors are cur-rently
serving obliga-tions.
Table 1
Board of Medical Student Loans
Status of Program Participants
As of June 30, 1999
Status
Number
of Participants
Student 18
Medical residency training 14
Fulfilling service obligation 10 a
Service obligation fulfilled 38 b
Repaid loan 29
Repaying loan 7
Other c 2
Total 118
a Two doctors began fulfilling their service obligations since June 30, 1999, and two doctors serving
prior to June 30, 1999, have since completed their service obligations.
b Three doctors fulfilled part of their service obligations and repaid the remaining portions of their
loans.
c One participant is disabled and one participant has a military deferment. Auditors could not de-termine
whether these persons can fulfill their service obligations.
Introduction and Background
4
OFFICE OF THE AUDITOR GENERAL
n Northern Arizona (2): A pathologist located in Flagstaff
and a doctor serving in Prescott.
n Western Arizona (1): A general surgeon serving Lake Ha-vasu
City and other outlying areas around the western Ari-zona
Colorado River region.
n Central Arizona (4): A doctor working at a clinic in the
Town of Guadalupe, one at the Maricopa Medical Center,
and another at a facility in West Phoenix. A fourth doctor
splits his time between two facilities: a free clinic in South
Phoenix and a facility in Mesa that offers health services to
indigent and working poor drug and alcohol addicts who
lack insurance coverage.
n Southern Arizona (3): One psychiatrist working for the
State’s behavioral health system in South Tucson, a doctor
working in the Town of Bisbee, and another in the City of
Benson.
Previous Evaluations
The Board of Medical Student Loans previously underwent
two reviews in 1995, a Sunset Review and a Program Authori-zation
Review (PAR). A Legislative Committee of Reference
completed a Sunset Review in October 1995. During the Board’s
Sunset hearing, the Committee recommended continuing the
Board for five years, modifying the Board’s statutes to allow
doctors to serve in rural areas of the State, and requiring the
Board to collect, prepare, and maintain data relating to the re-tention
of doctors in rural and other medically underserved
areas. The Legislature adopted the Committee’s recommenda-tions.
The Board also underwent a Program Authorization Review
(PAR) in 1995. In 1995, PARs were completed on several state-administered
programs designed to attract and retain health
Introduction and Background
5
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X
XX
XXX X
X
X
X
XX
Source: Auditor General staff analysis of the Board of Medical Student Loans
Program’s participant status database.
Figure 1
Board of Medical Student Loans
Locations of Doctors Currently Serving
As of February 29, 2000
Introduction and Background
6
OFFICE OF THE AUDITOR GENERAL
professionals in rural and medically underserved areas, in-cluding
the Arizona Medical Student Loan Program.1 The
Board’s November 1995 PAR contained two major conclusions.
n First, that the program’s performance measures adequately
measured program effectiveness, although it recommended
that the Board start to report the percentage of loan recipi-ents
who opt to fulfill service requirements rather than re-pay
loans. The Board has since begun to report this percent-age.
n Second, although the State of Arizona administered several
other programs to recruit medical providers to medically
underserved areas, the Arizona Medical Student Loan Pro-gram
was the only state program that recruited potential
doctors while they were still medical students. (For a de-scription
of other recruitment programs, see the Other Per-tinent
Information section on pages 25 through 31.)
Organization and Staffing
The Board consists of eight members who are appointed to
four-year terms. Two members are doctors who are appointed
by the Chairman of the Allopathic Board of Medical Examiners
and one member is a licensed osteopathic doctor appointed by
the Board of Osteopathic Examiners in Medicine and Surgery.
Three members are appointed by the Governor and are to be
knowledgeable about Arizona’s health care problems. Finally,
the president of the University of Arizona appoints one mem-ber
from the staff of the University’s College of Medicine, and
the director of the Department of Health Services or designee is
an ex officio, non-voting Board member.
Since Board loans were originally available only to University
of Arizona students, the University’s College of Medicine pro-vides
staff to the Board at no charge. Two financial aid staff, on
an as-needed basis, assist the Board. Due to a 1999 legislative
1 The Arizona Department of Health Services’ Primary Care Program and
the Arizona Area Health Education (AHEC) System, which is adminis-tered
by the University of Arizona Rural Health Office, also underwent
Program Authorization Reviews in 1995.
Introduction and Background
7
OFFICE OF THE AUDITOR GENERAL
change that expanded program eligibility to students at private
medical schools in Arizona, a financial aid officer from Mid-western
University’s Arizona College of Osteopathic Medicine
will also coordinate applications and track students from that
school.
Funding and Budget
The Board is funded through an annual General Fund appro-priation
and loan repayments in the Medical Student Loan
Fund (Loan Fund). The Board incurs no expenses and all
funding received is used for loans to students. The Loan Fund
consists of monies collected from recipients who repay their
loans rather than perform their service. The Legislature has
provided appropriations from the Loan Fund and the General
Fund to enable the Board to provide loans to 16 students annu-ally
during recent years. As shown in Table 2 (see page 8), in
fiscal year 2000, the Board anticipates awarding $328,800, with
$276,400 of that amount being appropriated from the State
General Fund. The remaining $52,400 will come from available
loan fund monies, including prior year loan repayments.
Revenues coming into the Loan Fund will likely decrease, re-sulting
in a greater need for General Fund appropriations if the
Board is to continue funding 16 students each year. In 1992 the
Legislature increased the financial penalties assessed to recipi-ents
opting to repay loans rather than perform service com-mitments.
Previously, recipients could repay their loan amount
with interest plus a $5,000 penalty rather than perform service.
Currently, students opting to repay may be liable for their loan
amount with interest plus pay a penalty equal to the amount
borrowed. As a result, as discussed in the Board’s 1995 Pro-gram
Authorization Review, the Board anticipates that more
students will fulfill their service obligations rather than repay
their loans. The Board reports that 59 percent of the loan recipi-ents
fulfilled their service obligations under the previous pen-alty
structure. The Board anticipates a 100 percent service rate
for recipients subject to the current penalty and a correspond-ing
decrease in revenues to the Loan Fund. Loan recipients
subject to the 1992 legislation are just now completing their 7
years of medical training.
All monies received are
used for medical student
loans.
Introduction and Background
8
OFFICE OF THE AUDITOR GENERAL
Audit Scope and
Methodology
This report includes findings and recommendations in two ar-eas:
n Changes to the Board’s statutes could help clarify appropri-ate
service sites, as well as requirements to track doctors
who remain in underserved areas after they complete serv-ice
obligations; and
n The Board needs to make additional applicant selection
process changes as a result of the program’s expansion to
ensure that all eligible applicants are considered equally and
fairly.
Table 2
Board of Medical Student Loans
Statement of Revenues, Expenditures, and Changes in Fund Balance
Years Ended or Ending June 30, 1998, 1999, and 2000
(Unaudited)
1998 1999 2000
(Actual) (Actual) (Estimated)
Revenues:
State General Fund appropriations $286,200 $239,000 $276,400
Loan repayments 53,944 15,591 24,090
Total revenues 340,144 254,591 300,490
Expenditures:
Aid to individuals 305,600 316,400 328,800
Excess of revenues over (under)
expenditures 34,544 (61,809) (28,310)
Fund balance, beginning of year 96,821 131,365 69,556
Fund balance, end of year $131,365 $ 69,556 $ 41,246
Source: The Arizona Financial Information System Revenues and Expenditures by Fund, Program, Organization,
and Object and Trial Balance by Fund reports for the years ended June 30, 1998 and 1999; and Board-estimated
financial activity for the year ending June 30, 2000.
Introduction and Background
9
OFFICE OF THE AUDITOR GENERAL
In addition, this report contains an Other Pertinent Information
section regarding various other state and federal programs that
support placement of health professionals in rural and medically
underserved areas of Arizona (see pages 25 through 31). Finally,
the report presents responses to the 12 statutory Sunset factors
(see pages 33 through 41).
This audit used a variety of methods to study the issues ad-dressed
in this report. These methods included interviewing
Board members, University of Arizona College of Medicine pro-gram
participants and potential future participants at Midwest-ern
University’s Arizona College of Osteopathic Medicine, medi-cal
school administrators and financial aid officers, representa-tives
from the Department of Health Services and Rural Health
Office, and a national expert in the retention of rural doctors; at-tending
the November 1999 Board meeting; reviewing statutes
and Board minutes; and conducting a literature review.
In addition, auditors interviewed representatives from medical
loan programs in seven other states to compare statutory provi-sions,
structure, and program operation with the Arizona Medi-cal
Student Loan Program. Auditors selected five of these states,
Arkansas, Mississippi, Indiana, New Mexico, and Oklahoma,
because state characteristics were similar to those of Arizona.
Specifically, these five states support one public allopathic medi-cal
college, require residency as a criteria for program eligibility,
and provide loans or scholarships to students in return for serv-ice.
Auditors chose the other two states, Illinois and Nebraska,
because literature identified them as states with medical loan
programs that track retention of doctors.
This audit was conducted in accordance with government
auditing standards.
The Auditor General and staff express appreciation to the mem-bers
of the Board of Medical Student Loans, the staff and students
of the University of Arizona College of Medicine, and the staff
and students of Midwestern University’s Arizona College of
Osteopathic Medicine for their cooperation and assistance
throughout the audit.
10
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FINDING I CHANGES TO BOARD’S
STATUTES COULD HELP
CLARIFY SERVICE AREA AND
RETENTION TRACKIING
REQUIREMENTS
Changes to the Arizona Board of Medical Student Loans Pro-gram’s
(Board) statutes could help ensure that doctors are
serving in appropriate locations and clarify how long the Board
should track where they serve. Although the Board’s statutes
require doctors to fulfill service obligations in rural and other
medically underserved areas of Arizona, one doctor is fulfilling
his service obligation in an urban area of the State that is not
medically underserved. In addition, because the Board’s stat-utes
lack a definition of “rural,” it is difficult to determine
which geographic areas of the State qualify as rural. Finally, the
statutes do not specify how long the Board should track doctors
after they have completed their service obligations.
State Law Requires
Service in Rural and
Medically Underserved Areas
A.R.S. §15-1723(D) requires participants in the Arizona Medical
Student Loan Program to fulfill their service obligations in rural
and other medically underserved areas of the State. The Board’s
statutes define medically underserved areas as those areas
designated by the Arizona Department of Health Services using
statutorily prescribed criteria. The Department of Health Serv-ices’
statutes and administrative rules define medically under-served
areas as follows:
n Federal Health Professional Shortage Areas (HPSAs):
The U.S. Department of Health and Human Services desig-nates
Health Professional Shortage Areas by approving ar-eas
proposed by state departments of health. Several types
of HPSAs can be designated including Primary Care
Finding I
12
OFFICE OF THE AUDITOR GENERAL
HPSAs, Mental Health HPSAs, and Dental HPSAs. These
types of HPSAs can include geographic areas, specific
population groups, or specific facilities. The Arizona De-partment
of Health Services (Department) uses federal crite-ria
to develop a proposed list of geographic, population,
and facility HPSAs. For geographic HPSAs, federal rules re-quire
states to consider such things as provider-to-population
ratios, infant mortality rates, the percentage of
people living below the federal poverty level, and the pres-ence
or absence of an unusually high need for health care
services. For population HPSAs, federal rules require states
to consider whether access barriers prevent the group from
using an area’s medical care providers. Such barriers could
be economic, linguistic, or cultural, or could involve refusal
of some providers to accept certain types of patients or
Medicaid reimbursement. Examples of such groups include
migrant farm workers and the homeless. Finally, federal
rules allow states to propose facilities such as jails, prisons,
and public or nonprofit medical centers as facility HPSAs.
Arizona facilities must either apply to the U.S. Department
of Health and Human Services or the Arizona Department
of Health Services to be considered for designation as a fa-cility
HPSA. Examples of Health Professional Shortage Ar-eas
in Arizona include all Indian reservations, the Maricopa
County jails, Tombstone in Cochise County, and He-ber/
Overgaard in Navajo County.
n Arizona Medically Underserved Areas (AzMUAs): In ad-dition
to federal HPSAs, the Arizona Department of Health
Services designates certain areas of the State as Arizona
Medically Underserved Areas. In contrast to federal HPSA
designations, AzMUA designations are strictly geographic.
Each year, the Department designates AzMUAs; approxi-mately
42 areas of the State received a designation in 1999.
Such areas are identified through a process that includes
consideration of factors such as an area’s estimated demand
for medical services, infant mortality rates, access to emer-gency
services, distance to health care facilities, and avail-ability
to routine transportation services. Examples of Ari-zona
Medically Underserved Areas include Tubac in Santa
Cruz County, El Mirage in Maricopa County, San Luis in
Yuma County, and Bryce in Pima County.
HPSAs can be geo-graphic
areas, population
groups, or specific facili-ties
like prisons.
AzMUAs are strictly geo-graphic
areas.
Finding I
13
OFFICE OF THE AUDITOR GENERAL
Board Has Approved An
Inappropriate Service Site
The Board has approved one doctor to fulfill his service obliga-tion
in an urban area that is not medically underserved. Al-though
the rationale appears to be based on good intentions, it
is in violation of state statute. If the Board wants greater flexi-bility
in approving such service sites, it should request a statu-tory
change.
One doctor’s service site violates statutes, but based on good
intentions—Board members approved one doctor to serve in
an urban non-medically underserved area of the State; how-ever,
the Board members appear to have had good intentions in
doing so. The Board is currently allowing one doctor to serve
part of his obligation at an urban site that is not a federal HPSA
or AzMUA. This doctor works part-time at a free clinic in South
Phoenix and part-time as the medical director of a nonprofit
medical center in Mesa that offers health services to drug and
alcohol addicts. The South Phoenix clinic is located in a federal
HPSA, which makes it an appropriate service site under state
statute. In contrast, the Mesa site is not an appropriate service
location. The Mesa site is not located in a geographic HPSA, is
not designated a facility HPSA, is not in an Arizona Medically
Underserved Area, and cannot be considered rural.
The Board’s reasons for allowing this doctor to work in Mesa
appear to be based on good intentions. Board meeting minutes
mention several reasons for allowing this doctor to fulfill his
service obligation at a site that is not located in a medically un-derserved
area.
n First, Board members noted that the addicted population is
a difficult population to serve and the Mesa facility primar-ily
serves people who are indigent or working poor and lack
insurance coverage.
n Second, Board members wanted to allow the doctor to
provide continuity of care to his patients. The Board min-utes
state that the doctor began working as the Mesa facil-ity’s
medical director in 1994 after completing his residency
training, and while participating in a fellowship program. In
One doctor is serving in
Mesa, an urban, non-medically
underserved
area.
Finding I
14
OFFICE OF THE AUDITOR GENERAL
1998, the doctor requested approval to continue working at
the Mesa facility to fulfill part of his service obligation.
n Finally, Board meeting minutes reflect that Department of
Health Services’ officials did not contest the Board’s deci-sion.
Two options could be explored to ensure statutory compli-ance—
Two options could be explored to ensure service sites
comply with state statutes.
n First, the doctor could ask the Mesa facility to apply for
designation as a facility HPSA. The nonprofit facility in
Mesa would have to request designation as a facility HPSA.
However, Department of Health Services staff noted that fa-cility
HPSA designations are difficult to obtain.
n Second, if the Board wants greater flexibility to approve
service locations that are not federally designated HPSAs or
Arizona Medically Underserved Areas, it should request
that the Legislature amend the Board’s statutes to allow the
Board to approve additional areas where doctors can fulfill
service obligations. If possible, the Board should request
that the Legislature make such a statutory change retroac-tive
to include past exceptions, such as the doctor in Mesa.
Board’s Statutes
Do Not Define “Rural”
The Board’s statutes do not define “rural,” which makes it diffi-cult
to determine which geographic areas of the State qualify as
rural areas, and which service sites are appropriate under state
statute. Because definitions of “rural” vary considerably, it is
not clear if current sites for four doctors who are not practicing
in medically underserved areas should be considered as rural
areas. The Legislature should define rural areas for the purpose
of the Arizona Medical Student Loan Program as it has for
other state programs that serve rural communities.
Appropriateness of four service sites is unclear—The Board is
allowing four doctors to serve in geographic areas that, while
not medically underserved, could be considered as rural de-
Finding I
15
OFFICE OF THE AUDITOR GENERAL
pending on how the term is defined. The Board has approved
one doctor to work in Prescott, another to work in Lake Havasu
City, and a third to work in Flagstaff, and recently approved
another doctor to fulfill her service obligation by establishing a
private practice in Benson. In addition, the Board has already
approved another doctor’s request to set up a family practice in
Benson after he finishes residency training in June 2000. Since
neither Prescott, Lake Havasu City, Flagstaff, nor Benson qual-ify
as medically underserved areas, they would have to qualify
as rural areas to be appropriate service sites in compliance with
state statutes.
Legislative changes needed to define rural—The Legislature
should amend the Board’s statutes to define rural or give the
Board rule-making authority to adopt a definition of rural. The
Legislature has defined rural for other state programs that at-tract
health professionals to rural communities. For example,
Prescott, Lake Havasu City, Flagstaff, and Benson could be con-sidered
rural under the definitions established for the Rural
Health Professions Program1 and the Arizona Rural Private
Primary Care Provider Loan Repayment Program.2 The defini-tions
for these two programs located in A.R.S. §§15-1754(F) and
36-2174(A) define rural broadly as either:
1) a county with a population of less than 400,000 persons ac-cording
to the most recent United States decennial census;
or
1 The Arizona Legislature established the Rural Health Professions Pro-gram
in 1994. The program is administered by the University of Ari-zona’s
Program in Community Responsive Medicine. The program en-courages
health professions students to pursue careers in rural settings,
and offers intensive training experiences in rural communities. Every
year, a fixed number of medical students, nursing students, and phar-macy
students from Arizona’s three public universities are chosen to
participate in the program.
2 The Arizona Legislature established the Rural Private Primary Care
Provider Loan Repayment Program in 1997. The program offers repay-ment
of educational loans for health professionals who work in private
practices located in medically underserved rural areas of Arizona.
Rural areas are defined
for other programs.
Finding I
16
OFFICE OF THE AUDITOR GENERAL
2) a census county division with less than 50,000 persons in a
county with 400,000 persons or more according to the most
recent United States decennial census.
In contrast, the United States Census Bureau has a very restric-tive
definition that defines rural areas as places that have a
population of 2,500 or less. None of these four cities would be
considered rural under this definition. In establishing a defini-tion
of rural for the Arizona Medical Student Loan Program,
the Legislature should consider the impact that broad or re-strictive
definitions will have on eligible service areas. For ex-ample,
13 of the State’s 15 counties qualify as rural counties un-der
the definition used by the Rural Health Professions Pro-gram.
Applying such a broad definition to the Arizona Medical
Student Loan Program would essentially allow doctors to fulfill
service obligations anywhere in one of these 13 counties, irre-spective
of an area’s medical need.
Retention Tracking
Requirements
Need Clarification
The law that requires the Board to track retained doctors should
be clarified. Statutes require the Board to maintain data on
doctors who continue to practice in rural and medically under-served
areas once their service obligations are complete. How-ever,
the statutes do not specify how long the Board should
track doctors once their service obligations are complete. The
Board has also slightly overstated the number of retained doc-tors.
Board’s statutes require collection of retention statistics—
A.R.S. §15-1723(E) requires the Board to “collect and maintain
data on the retention of doctors who practice in rural and other
medically underserved areas.” The Legislature added this re-quirement
after the Board’s 1995 Sunset Review because they
wanted to know about the program’s long-term impact and
they were concerned about program accountability. Since the
program’s inception, 35 doctors have completed service obliga-
Board must track doctors
after they have completed
service obligations.
Finding I
17
OFFICE OF THE AUDITOR GENERAL
tions.1 As of June 30, 1999, the Board reports that 18 of these 35
doctors continue to practice in medically underserved areas.
Tracking duration is not specified in statute—The statute that
requires the Board to track the retention of doctors in rural and
medically underserved areas of the State does not specify how
long the Board should track these doctors. Since the statute
does not specify how long the Board should track these doctors,
the Board will need to track them indefinitely. However, the
Board’s administrator indicates that it is a time-consuming pro-cess
to track these doctors. As more doctors fulfill their obliga-tions,
the Board’s tracking effort will become more time con-suming.
Therefore, the Legislature should consider amending
the Board’s statutes to include the amount of time the Board
should track doctors after they have completed their obliga-tions.
For fiscal year 1999, the Board tracked doctors who com-pleted
service obligations back to 1986, the first year a doctor
completed service. Since the Board has tracked doctors 13 years
beyond completion of their service obligations, tracking doctors
10 to 15 years beyond completion of their service obligations
may be an appropriate tracking time period.
Retention statistics overstated by one doctor—The Board has
overstated the number of retained doctors by one.2 The Board
includes in its retention statistics a doctor who works for a fa-cility
that contracts with the State’s behavioral health system.
Although the facility provides services to medically needy peo-ple,
it is not located within an Arizona Medically Underserved
Area or Health Professional Shortage Area nor does it have a
facility or population HPSA designation. The Board should
include in its retention statistics only those doctors who con-tinue
to practice in rural and other medically underserved areas
as required by statute.
1 Thirty-five doctors have fulfilled their service obligations by performing
the required number of years of service. An additional three doctors
have performed some service and have repaid the remaining amounts of
their loans.
2 The Board’s retention statistics also include two doctors who continue to
work at their original service sites. One service site was not located in a
medically underserved area when the doctor began service. The other
service site was located in a medically underserved area when the doctor
began service.
Finding I
18
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. If the Board wants greater flexibility to approve service lo-cations
that are not federally designated HPSAs or Arizona
Medically Underserved Areas, it should request that the
Legislature amend A.R.S. §15-1723(D) to include additional
areas where doctors can fulfill service obligations as ap-proved
by the Board. The Board should request that the
Legislature make such a statutory change retroactive to in-clude
past exceptions, such as the doctor serving in Mesa.
2. The Legislature should amend the Board’s statutes to define
rural or give the Board rule-making authority to adopt a
definition of rural.
3. Unless and until the Board’s statutes are revised, the Board
should comply with the current statutes that restrict doc-tors’
service sites to those located in rural and medically un-derserved
areas.
4. The Legislature should amend A.R.S. §15-1723(E) to include
the amount of time the Board should track doctors who
continue to practice in rural and medically underserved ar-eas
once their service obligations are complete.
5. The Board should include in its retention statistics only
those doctors who continue to practice in rural and medi-cally
underserved areas once their service obligations are
complete.
19
OFFICE OF THE AUDITOR GENERAL
FINDING II CHANGES IN APPLICANT
SELECTION PROCESS NEEDED
TO ENSURE EQUAL
CONSIDERATION FOR
ALL STUDENTS
The Board should make changes to the applicant selection proc-esses
to help ensure that the increased number of eligible students
receive equal consideration for available funding. A 1999 legisla-tive
change expanded program eligibility to students attending
private medical schools, thereby increasing competition for pro-gram
funding. With increased competition and the need to ensure
that all applicants are considered equally and fairly, selection pro-cess
improvements should be made.
Legislative Change
Increases Eligibility and
Competition for Funding
A legislative change that increases the number of students eligible
for loans from the Arizona Medical Student Loan Program may
result in increased competition for limited program funds. In 1999,
the Legislature changed the Board’s statutes to allow students
from both public and private medical schools in Arizona to be
eligible for loans. Previously, only University of Arizona College
of Medicine students were eligible. That eligibility now extends to
Arizona’s only other college of medicine, Midwestern University’s
Arizona College of Osteopathic Medicine. In each of the past three
years, there have never been more than two additional applicants
above the number of loans available to new applicants. With the
anticipated increase in applicants from Midwestern University’s
Arizona College of Osteopathic Medicine, competition will likely
be greater in the future.
Competition for limited
loan monies may in-crease.
Finding II
20
OFFICE OF THE AUDITOR GENERAL
Changes in Selection Process
Needed to Ensure Equity
The Board has begun to make changes to accommodate eligible
applicants from the private osteopathic medical school, but addi-tional
changes to the selection process could be beneficial. The
Board has made some decisions needed to expand the program
and expects to award funding in the spring of 2000. However,
with the likely increased competition and only slight changes in
board membership, additional changes to the selection process are
important to ensure fair and equitable consideration of all appli-cants.
Board has made some program changes—The Board has taken a
number of actions necessary to expand the Arizona Medical Stu-dent
Loan Program to qualified students attending the Arizona
College of Osteopathic Medicine and plans to award funding this
spring. The Board held an initial planning meeting in November
1999 that included the newly appointed osteopathic doctor and
representatives from the Arizona College of Osteopathic Medi-cine.
The Board agreed to operate parallel programs at the Uni-versity
of Arizona and the Arizona College of Osteopathic Medi-cine.
The Board decided to do the following:
n Request that the Department of Health Services submit scored
applicant interview ranking sheets to the Board;
n Allow all eligible applicants from each school to be considered
for funding by the Board; and,
n Request that the financial aid officer from the University of
Arizona College of Medicine and the financial aid officer at the
Arizona College of Osteopathic Medicine develop parallel ap-plication
and tracking processes.
Finding II
21
OFFICE OF THE AUDITOR GENERAL
The Board planned to award the remaining five loans for the 1999-
2000 school year in the spring of 2000 and held a board meeting in
April to select loan recipients.1, 2 In January the financial aid offi-cers
distributed loan applications to the Arizona College of Osteo-pathic
Medicine students and also discussed applicant selection
and processing with the students. The University of Arizona Col-lege
of Medicine financial aid officer also made her students
aware of the available funding. Applications were due February 8,
2000. The Board met in April 2000 and awarded loans to three
students and tentatively awarded a loan to one additional student
pending residency determination.3
Additional changes to selection process could be beneficial—In
order to ensure that all students are considered fairly and equally
for funding, some additional changes could improve the selection
processes. Further, since the Board consists of more allopathic
doctor representation than osteopathic representation, selection
process changes should reduce any appearance of bias toward
allopathic students. Specifically, the following changes could be
beneficial:
n Legislature should add definition of “Arizona resident” to
statutes—The Board needs a common standard regarding
Arizona residency that applies to all applicants. Previously,
when only University of Arizona College of Medicine students
were eligible for the program, the Board used the University of
Arizona’s definition of residency. As a general rule, the Uni-versity
of Arizona requires that students establish domicile in
Arizona at least one year prior to registration. Further, the
University of Arizona College of Medicine requires medical
students to be Arizona residents. In contrast, Midwestern
University’s Arizona College of Osteopathic Medicine, a pri-vate
school, does not require Arizona residency as a condition
1 Loans for 16 students were available for school year 1999-2000. In the fall
of 1999 the Board renewed loans for 11 University of Arizona College of
Medicine students. The Board did not award the remaining loans at that
time because no qualified applicants had applied.
2 Students awarded these loans will be able to use monies to repay loans
already incurred for the 1999-2000 school year or for other purposes.
3 The Board did not award the one remaining loan in April 2000 because
no more qualified loan applicants had applied.
Changes needed to en-sure
equal treatment of
osteopath students.
Finding II
22
OFFICE OF THE AUDITOR GENERAL
for admission. In order to ensure that all applicants are re-quired
to meet the same residency requirements, the Legisla-ture
should define residency in the Board’s statutes.
n Standard interview instruments should be used for inter-views—
In addition, the Board should develop and use stan-dard
interview instruments with core questions to help guide
the interview process. The Department of Health Services cur-rently
uses a standard interview instrument for all applicants
and has agreed to interview applicants at both medical
schools. However, the interviews conducted by medical
school representatives have not been standardized. The Dean
of Students at the University of Arizona College of Medicine
will interview students from the College of Medicine. At the
Arizona College of Osteopathic Medicine, a committee will
conduct student interviews. The use of a standard interview
instrument with core questions would ensure that all students
are asked the same basic questions and enable the Board to
equally consider each applicant based on responses to like
questions. Auditors found that the National Health Service
Corps’ scholarship program uses a standard interview in-strument
that enables evaluators to more fairly and equally
consider applicants’ qualifications despite the program’s use
of multiple interviewers across the United States. 1
n Board should adopt a scoring system—Finally, the Board
should adopt a scoring system to help evaluate applicants. The
Board is required by statute to select applicants who are Ari-zona
residents, who will practice in primary care, and the
Board must also consider the applicant’s financial need. Board
members stated that they consider these factors and individu-ally
rank applicants based on their individual assessments re-garding
the applicant’s fit for the program and commitment.
However, this process is somewhat subjective. The Board in-dicates
that it is developing an evaluation tool that all inter-
1 The National Health Service Corps (NHSC) consists of a number of pro-grams
including a scholarship and a loan repayment program. The
NHSC Scholarship Program awards scholarships to students receiving
academic training in medicine, osteopathy, dentistry, and other health
professions, and the NHSC Loan Repayment Program repays the edu-cational
loans of trained health professionals. The acceptance of financial
assistance obligates individuals to provide health care services in feder-ally
designated Health Professional Shortage Areas.
Finding II
23
OFFICE OF THE AUDITOR GENERAL
viewers will use to score applicants’ responses. There are other
factors that the Board considers when determining who is
awarded a loan, including responses to questions on the appli-cation
regarding the applicants’ desire to serve in medically
underserved areas. The Board could also assign scores to the
applicants’ responses to these questions. Further, a scoring
system that weighs the importance of the various selection
criteria would better enable the Board to select the best quali-fied
candidates from those who apply. In addition, it would
help the Board document and justify its selection of applicants
for limited funding. However, such a scoring system should
not preclude the Board from using its professional judgment
in applicant selection.
For example, Nebraska’s Rural Health Scholarship Program
scores all applicants based on common criteria, assigns points
to applicants in each area examined, and multiplies the points
in each category by weights in order to develop a standard
score for each applicant. The Nebraska program then uses
these scores as a statistical mechanism to help evaluate schol-arship
recipients. Nebraska developed the scoring system over
20 years ago as a tool to identify desirable qualities that com-missioners
agreed were important indicators for successful
applicants. The Nebraska program administrator estimates
that the scoring system took a year to fully develop and im-plement.
Recommendations
To ensure that all eligible applicants are given equal and fair con-sideration
for available funding,
1. The Legislature should add a definition of Arizona resident to
the Board’s statutes.
2. The Board should develop and use standard interview in-struments
for applicant interviews.
3. The Board should adopt a scoring system to rank applicants
and guide selection of the most qualified applicants for fund-ing.
24
OFFICE OF THE AUDITOR GENERAL
(This Page Intentionally Left Blank)
25
OFFICE OF THE AUDITOR GENERAL
OTHER PERTINENT INFORMATION
During this audit, other pertinent information was obtained
about other state and federally funded programs that exist in
Arizona to attract health professionals to work in rural and
medically underserved areas. Possible changes in designated
health professional shortage areas could affect some of these
programs in the future.
Existing Health
Professional Recruitment
Programs
Several different programs exist in Arizona to attract health
professionals to rural and medically underserved areas (see
Appendix, pages a-i through a-vi for summary tables). These
programs are of several basic types. Scholarship programs pro-vide
financial assistance to health professions students in ex-change
for service in medically underserved areas once medical
training is complete. Notwithstanding its name, the Arizona
Medical Student Loan Program is like a scholarship program.
Loan repayment programs repay the already incurred educa-tional
loans of health professionals. Under these programs,
health professionals who have incurred educational debt can
have their loans paid off by serving in medically underserved
areas. Finally, other programs provide educational and clinical
training, mentor students, assist with job placement in medi-cally
underserved areas, and provide employment opportuni-ties
in such areas. Major programs are outlined below:
Scholarship and Loan Repayment Programs—The follow-ing
programs offer financial assistance to students and health
care professionals in exchange for service in medically under-served
areas:
n National Health Service Corps (NHSC) Scholarship and
Loan Repayment Programs: The Bureau of Primary
Health Care in the U.S. Department of Health and Human
Services sponsors an array of programs to attract health pro-fessionals
to serve in federal Health Professional Shortage
Other Pertinent Information
26
OFFICE OF THE AUDITOR GENERAL
Areas, including a scholarship program and a loan repay-ment
program. The NHSC Scholarship Program under-writes
training for medical students, nursing students, and
students studying to become physician assistants in ex-change
for future service in a federal HPSA. The NHSC
Loan Repayment Program provides for the repayment of
educational loans for trained health professionals who agree
to work in a federal HPSA. Health professionals eligible to
apply for loan repayment assistance include primary care
doctors, nurse practitioners, physician assistants, certified
nurse midwives, dentists, and mental health professionals.
The Arizona Department of Health Services administers
National Health Service Corps programs at the state level.
Currently, Arizona has 49 health professionals serving the
State through NHSC scholarship and loan repayment pro-grams.
Thirty-one health professionals received scholarship
assistance, and 18 are receiving loan repayment assistance.
The 49 health professionals include 34 medical and osteo-pathic
doctors, 5 psychiatrists, 3 dentists, 4 nurse practitio-ners,
and 3 physician assistants.
n The Arizona Loan Repayment Program: The federal Bu-reau
of Primary Health Care also sponsors the State Loan
Repayment Program, a joint federal- and state-funded loan
repayment program. The Arizona Department of Health
Services administers the program at the state level. Health
professionals who sign loan repayment contracts agree to
serve at eligible sites in a federal Health Professional Short-age
Area (HPSA) in exchange for loan repayment. Program
requirements restrict placement to private, nonprofit clinics
located in federal HPSAs. Arizona’s program pays up to
$25,000 per year for doctors, and up to $7,500 per year for
physician assistants, nurse practitioners, and certified nurse
midwives. Fifteen health professionals are currently serving
Arizona through this program including 8 medical and os-teopathic
doctors, 2 dentists, 2 nurse practitioners, and 3
physician assistants.
n Rural Private Primary Care Provider Loan Repayment
Program: The Arizona Department of Health Services ad-ministers
an additional loan repayment program, which is
funded with state tobacco tax revenues. Reimbursement
Other Pertinent Information
27
OFFICE OF THE AUDITOR GENERAL
amounts are the same as the Arizona Loan Repayment Pro-gram.
However, unlike the Arizona Loan Repayment pro-gram,
participants are not restricted to private, nonprofit
clinics. Nine health professionals are currently serving Ari-zona
through this program, including 7 medical and osteo-pathic
doctors and 2 physician assistants.
n Indian Health Services Scholarship Programs: Indian
Health Services (IHS), a federal agency within the U.S. De-partment
of Health and Human Services, offers three types
of health professions scholarships that support American
Indian and Alaska Native students enrolled in health pro-fessions
programs. Two scholarship programs assist health
profession students without imposing service obligations. A
third scholarship program obligates students to fulfill serv-ice
obligations in approved IHS facilities and other sites as
approved by the IHS director; students from a variety of
disciplines ranging from medicine and nursing to business,
accounting, public health, and counseling can receive this
type of scholarship assistance.
n Indian Health Services Loan Repayment Program: In-dian
Health Services also sponsors a Loan Repayment Pro-gram
that provides for the repayment of health profession-als’
educational loans for a two-year service obligation in an
IHS facility or approved Indian health program. This pro-gram
is not restricted to American Indians or Alaska Na-tives.
In Arizona, Indian Health Service programs are administered at
IHS area offices located in Phoenix, Tucson, and the Navajo
Nation.
Education, Training, Employment, and Recruitment Pro-grams—
The following programs offer educational and clinical
training, employment opportunities, and job placement assis-tance
to students and health care professionals:
n J-1 Visa Waiver Program: The federal J-1 Visa Waiver
Program allows foreign medical graduates to practice in the
United States under special circumstances. Federal law re-quires
foreign medical graduates to return to their home
countries for at least two years after the completion of their
Other Pertinent Information
28
OFFICE OF THE AUDITOR GENERAL
training; however, J-1 Visa waivers allow these doctors to
remain in the United States if a federal agency or state de-partment
of health so requests. The Arizona Department of
Health Services may request up to 20 J-1 Visa Waivers per
calendar year for doctors to work at least three years in
designated underserved areas of Arizona. The State began
program participation in 1997. Currently, 26 J-1 Visa doctors
are serving Arizona through this program. The Department
requested 13 waivers in 1997, 9 waivers in 1998, and 4 waiv-ers
in 1999. Foreign doctors also may request waivers
through the United States Department of Agriculture
(USDA). The Arizona Department of Health Services is
aware of 5 J-1 Visa doctors serving Arizona through the
USDA.
n Arizona Rural Health Professions Program: This pro-gram
is an interdisciplinary program that provides students
intensive training experiences in rural communities
throughout the State. The program is administered by the
University of Arizona’s Program in Community Responsive
Medicine. Each year, the State’s three public universities se-lect
15 medical students, 10 nurse practitioner students, and
4 pharmacy students to participate in the program.
n Arizona Area Health Education Centers (AHEC): The
Bureau of Health Professions in the U.S. Department of
Health and Human Services sponsors AHEC programs
which, in Arizona, are operated by the University of Ari-zona
Rural Health Office. The mission of Arizona’s AHEC
system is
“to improve the development, recruitment, minority rep-resentation,
distribution, and retention of health profes-sional
personnel in Arizona’s rural and medically under-served
communities.”
The system includes five centers located in five regions of
the State. Together, the centers serve as a statewide, com-munity-
based infrastructure for the recruitment and reten-tion
of health care professionals. The AHEC system sup-ports
clinical rotations for health professions students and
medical residents in rural and other medically underserved
communities, offers continuing medical education to health
Other Pertinent Information
29
OFFICE OF THE AUDITOR GENERAL
care professionals in rural and medically underserved areas,
and exposes young people from such communities to health
care career options. Arizona’s AHEC programs were
phased in gradually with an initial six years of federal core
support. Beginning in fiscal year 1991, Arizona’s General
Fund began to absorb the cost of AHEC programs, reaching
a state-supported amount of $1.2 million in fiscal year 1995;
however, in fiscal year 1996 the state AHEC system lost all
state funding. The AHEC system continues to operate with-out
state-appropriated funding
n Arizona Health Provider Resources Program (AHPR):
The Rural Health Office also operates the Arizona Health
Provider Resources Program. The program provides health
professional recruitment and retention assistance to Ari-zona’s
rural and medically underserved communities. The
AHPR is a founding member and the Arizona designated
contact for provider referrals of the National Rural Recruit-ment
and Retention Network, which provides national ex-posure
and advertising of health care opportunities. In 1999,
the program reported receiving more than 200 inquiries
from interested primary care providers and gave them in-formation
regarding provider opportunities and other state
and federal programs in Arizona. The AHPR is currently
performing a recruitment and retention feasibility study to
assess recruitment and retention needs in the State.
n Federal Community Health Centers: The federal Bureau
of Primary Health Care sponsors Community Health Cen-ters
across the United States. Community Health Centers
provide family-oriented primary and preventive health care
services for people living in rural and urban medically un-derserved
communities. Twelve federally supported Com-munity
Health Centers operate in Arizona. Arizona’s
Community Health Centers treat Medicare patients, and
privately insured and uninsured patients, and participate in
Arizona’s Medicaid system and the State’s tobacco tax pri-mary
care programs. The nonprofit Arizona Association of
Community Health Centers supports the State’s Commu-nity
Health Centers through advocacy, representation,
shared services, and technical assistance. In addition, the
Association recruits and provide employment opportunities
for National Health Service Corps participants. According
Other Pertinent Information
30
OFFICE OF THE AUDITOR GENERAL
to the Arizona Department of Health Services, Community
Health Centers employ 25 of the 49 National Health Service
Corps professionals currently serving in Arizona.
Possible Changes
Affecting Recruitment
Programs
As part of the review of the Arizona Medical Student Loan
Program, auditors identified common concerns and possible
changes that could impact recruitment of health professionals
in medically underserved areas. These concerns and possible
changes were identified through auditors’ review of board
minutes and interviews of administrators of other programs
designed to attract and recruit health professionals to medically
underserved areas, as well as students at the University of Ari-zona
College of Medicine.1 Identified concerns and possible
changes include the following:
n Impact of HPSA Redesignations on Placement Oppor-tunities:
Several board members, one program adminis-trator,
and medical students expressed concerns about fu-ture
changes in the State’s federally designated Health Pro-fessional
Shortage Areas (HPSAs). State and federal laws
often require participants in state and federally funded pro-grams
to work in federal HPSAs. Several board members
and one program administrator expressed concern that
some areas currently designated as HPSAs would lose their
designations, thereby decreasing placement opportunities in
these areas and making it more difficult for program par-ticipants
to find employment. A few students stated that
1 In addition to the Board of Medical Student Loans Program coordi-nator,
auditors interviewed the Department of Health Service’s man-ager
for National Health Service Corps programs, the program man-ager
for the State’s two loan repayment programs, and the program
manager for the Arizona Health Provider Resources Program.
Other Pertinent Information
31
OFFICE OF THE AUDITOR GENERAL
they want better information on trends in medically under-served
areas and future job opportunities.1
n Shortages in Eligible Placement Sites: In addition to po-tential
losses in eligible placement sites from future HPSA
redesignations, several program administrators and board
members expressed concerns about the lack of eligible
placement sites. For example, these individuals noted that
some communities in Arizona have great need for doctors’
services; however, they may lack the physical infrastructure
and facilities necessary to attract and support doctors.
n Changes in Health Professional Workforce: Finally, pro-gram
administrators at the Arizona Department of Health
Services expressed uncertainty about the forces influencing
the demand and supply of health professional workers.
They said the market for medical and osteopathic doctors
does not appear saturated; however, there appears to be a
glut of mid-level health professionals, such as nurse practi-tioners
and physician assistants, who were willing to take
primary care positions in medically underserved areas.
They also noted that many communities prefer doctors.
1 According to Department of Health Services staff, doctors who par-ticipate
in the National Health Service Corps and the Arizona Medi-cal
Student Loan program are required to initiate self-directed job
searches after they complete their residencies. The State does not
guarantee job placement in designated medically underserved areas.
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33
OFFICE OF THE AUDITOR GENERAL
SUNSET FACTORS
In accordance with A.R.S. §41-2954, the Legislature should con-sider
the following 12 factors in determining whether the Board
of Medical Student Loans (Board) should be continued or ter-minated.
1. The objective and purpose in establishing the
Board.
The Board was established in 1977 to administer the Ari-zona
Medical Student Loan Fund. The Board’s mission is
“To recruit physicians to serve in medically under-served
areas in Arizona by providing substantial
funding in educational loans to students at colleges
of medicine in Arizona.”
The Board grants loans to medical students who, upon
completing their residencies, agree to provide medical
services in rural and other medically underserved areas of
the State. To participate in the program, a student must be
an Arizona resident who plans to practice in family prac-tice,
pediatrics, obstetrics, or internal medicine. Loan re-cipients
agree to serve in a rural or other medically under-served
area of the State for at least two years, or one year of
service for each year of loan support, whichever is longer,
upon completion of medical residency training. Initially,
the Board provided funding to only University of Arizona
medical students. However, a 1999 legislative change al-lows
students at other Arizona medical schools to receive
loans. Currently, students at both the University of Ari-zona
College of Medicine and Midwestern University’s
Arizona College of Osteopathic Medicine are eligible for
loans. According to the Board, medical students receive
about 83 percent of the average annual cost of a public
medical education in exchange for their service commit-ments.
Sunset Factors
34
OFFICE OF THE AUDITOR GENERAL
2. The effectiveness with which the Board has met its
objective and purpose and the efficiency with which it
has operated.
The Board has been generally effective in meeting its ob-jective
and purpose and has generally operated efficiently.
Since its inception, the Board has awarded funding to a
total of 118 students. As of June 30, 1999, of those 118 stu-dents,
48 had completed or were completing their service
obligations, 34 had yet to begin to fulfill their service obli-gations
because they were still in school or in their medical
residency training, and 36 had repaid or were repaying
their loans.1 Additionally, the Board has generally oper-ated
efficiently in that all of the program’s funding is
awarded to medical students. The Board’s administrative
support is provided free of charge by the University of
Arizona College of Medicine. Further, Board members
have not received any compensation.
However, the Board could operate more effectively in two
areas.
n First, the Board should include in its retention statistics
only those doctors who continue to practice in rural
and other medically underserved areas of the State (see
Finding I, pages 11 through 18). The Board’s fiscal year
1999 retention statistics include one doctor who works
at a facility that serves the medically needy, but the fa-cility
is not located in a federal Health Professional
Shortage Area or Arizona Medically Underserved
Area.
n Second, some changes to the Board’s selection proc-esses
could help it operate more effectively. To ensure
that all eligible applicants are given fair and equal con-sideration
for funding, the Legislature should add a
definition of Arizona resident to the Board’s statutes,
the Board should develop and use standard interview
instruments for applicant interviews, and the Board
1 Of the 34 loan recipients who had yet to begin to fulfill their service obli-gations,
1 is medically disabled and 1 has a military deferment.
Sunset Factors
35
OFFICE OF THE AUDITOR GENERAL
should adopt an applicant scoring system (see Finding
II, pages 19 through 23).
Limited research on health professions’ loan repay-ment
and scholarship programs suggests that loan re-payment
programs may be more effective than schol-arship
programs to get health professionals to fulfill
their service obligations. Loan repayment programs
provide repayment of health professionals’ already in-curred
education loans in exchange for service. Schol-arship
programs, like the program administered by the
Board of Medical Student Loans, provide up-front
funding for students’ health professions education in
exchange for future service. The United States General
Accounting Office (GAO) evaluated the National
Health Service Corps scholarship and loan programs in
1995, and determined that the loan repayment pro-gram
offered a better long-term investment of scarce
federal resources to address shortages in primary care
providers when compared to the scholarship program.
The GAO determined that loan program participants
were more likely to complete their agreed-upon service
than scholarship program participants. Similarly, a na-tional
expert at the University of North Carolina who
has studied state-supported programs indicated that
programs that focus on recruiting doctors after they
complete training or during residency are better at get-ting
them to complete their service obligations than
scholarship programs. When auditors interviewed this
expert, he stated that loan repayers do not face as many
uncertainties as those associated with long-term obli-gations.
He added that programs that require service
obligations up to seven years in advance do not factor
into account lifestyle changes, such as marital and fam-ily
status.1
1 Auditors interviewed Donald E. Pathman, M.D., MPH, of the University
of North Carolina; he informed auditors that the Journal of Rural Health
was reviewing a yet-to-be-published paper entitled “Medical Training
Debt and Service Commitments: the Rural Consequences.”
Sunset Factors
36
OFFICE OF THE AUDITOR GENERAL
3. The extent to which the Board has operated within the
public interest.
The Board has operated in the public interest by placing
Arizona doctors in medically underserved areas of the
State that may not have otherwise received such medical
services. Currently, ten doctors are fulfilling their service
obligations at locations statewide. In addition, the Board
may grant loans to help defray the cost of a medical edu-cation
to qualified Arizona residents who may otherwise
be unable to pay the expenses of medical school. The
Board has awarded funding to 16 students each year for
the past few years. Finally, as of June 30, 1999, the Board
reports that 18 doctors continue to practice in medically
underserved areas of the State after completion of their
service obligations.1
4. The extent to which rules adopted by the Board are
consistent with the legislative mandate.
Since the Board does not have the authority to promulgate
rules, this factor does not apply.
5. The extent to which the Board has encouraged input
from the public before adopting its rules, and the ex-tent
to which it has informed the public as to its ac-tions
and their expected impact on the public.
The Board does not have the authority to promulgate
rules. However, the Board informs the public of its actions
by holding public meetings, as needed, to discuss appli-cant
qualifications, to award funding to eligible students,
to approve service locations, and to take any other actions
needed to administer the program. The Board complies
with the Open Meeting Laws regarding posting public
meeting notices at least 24 hours in advance, as well as re-quirements
for keeping meeting minutes. Finally, the
Board publishes an annual report that includes informa-tion
regarding the purpose of the Arizona Medical Student
1 As discussed in Finding I, pages 11 through 18, the Board has slightly
overstated its retention statistics.
Sunset Factors
37
OFFICE OF THE AUDITOR GENERAL
Loan program, the number of students funded, and the lo-cations
where doctors are providing service.
6. The extent to which the Board has been able to in-vestigate
and resolve complaints that are within its
jurisdiction.
According to the Board, there have been a few instances in
which participants in repayment have complained. The
Board has sought the advice of the Attorney General to
appropriately handle these matters.
7. The extent to which the attorney general or any other
applicable agency of state government has the
authority to prosecute actions under the enabling
legislation.
A.R.S. §15-1724(G) authorizes the Attorney General’s Of-fice
to take actions needed to enforce the contract and
achieve repayment of loans provided by the Board. Ac-cording
to the Board, since the program began, two loan
recipients have been referred to the Attorney General’s Of-fice
for repayment problems and have since repaid or are
repaying the loans. In an additional two cases, the Board
entered into payment arrangements with doctors, follow-ing
the Office of the Attorney General’s advice. Finally, one
additional case referred to the Attorney General’s Office
was resolved with the case being returned to the Board
and the loan recipient completing the service commitment.
8. The extent to which the Board has addressed defi-ciencies
in its enabling statutes which prevent it from
fulfilling its statutory mandate.
A number of changes have been made to the Board’s stat-utes
over the years to update the loan program. During the
1992 legislative session the amount of each loan granted by
the Board increased from $6,000 to tuition plus no more
than $10,000, adjusted for inflation. As a result, the Board is
able to provide substantial funding to cover the cost of a
public medical school education. In addition, during the
Sunset Factors
38
OFFICE OF THE AUDITOR GENERAL
same legislative session, the loan repayment penalty was
substantially increased. A loan recipient who does not ful-fill
the service obligation repays the loan at 7 percent inter-est
plus liquidated damages in the amount borrowed.
Prior to this change, the law specified $5,000 liquidated
damages. Finally, a 1992 legislative change requires stu-dents
to specialize in family practice, pediatrics, obstetrics,
or internal medicine. Previously, loan recipients could en-ter
any field of medicine.
The Legislature also made significant changes to the
Board’s statutes in 1996. First, the Legislature modified the
areas of the State where doctors can serve to include rural
areas in addition to other medically underserved areas.
Second, the Legislature added A.R.S. §15-1723(E) which
requires the Board to collect and maintain data on the re-tention
of doctors who practice in rural and other medi-cally
underserved areas of the State.
Finally, in 1999 the Legislature made some changes to the
Arizona Medical Student Loan Program and the Board’s
composition. The Legislature amended A.R.S. §15-1723(A)
to allow students at both public and private medical
schools in Arizona to be eligible for loans. Additionally, it
added an osteopathic physician to the Board who is ap-pointed
by the Arizona Board of Osteopathic Examiners in
Medicine and Surgery and made the Department of
Health Services’ board member a non-voting member.
9. The extent to which changes are necessary in the
laws of the Board to adequately comply with the fac-tors
listed in the Sunset review statute.
Some legislative changes could help the Board comply
with the Sunset factors.
n First, if the Board thinks that the Arizona Medical Stu-dent
Loan Program should serve certain populations
not located in rural and other medically underserved
areas of the State, it should request a legislative change
to A.R.S. §15-1723(D) to include additional areas ap-proved
by the Board. Currently, the Board has given
approval to one doctor who works for a facility that of-
Sunset Factors
39
OFFICE OF THE AUDITOR GENERAL
fers health services to indigent and working poor drug
and alcohol addicts who lack insurance coverage.
However, this health facility is not located in a rural or
medically underserved area of the State (see Finding I,
pages 11 through 18).
n Second, to better enable the Board to approve only ap-propriate
service locations, the Legislature should de-fine
rural or give the Board rule-making authority to
do so. Four doctors are currently fulfilling their service
obligations by working in areas of the State that could
be considered rural. However, because rural is not de-fined,
these doctors’ service sites may not be appropri-ate
(see Finding I, pages 11 through 18).
n Third, the Legislature should clarify A.R.S. §15-1723(E)
to specify the amount of time the Board should track
doctors who continue to practice in rural and other
medically underserved areas once their service obliga-tions
are complete (see Finding I, pages 11 through 18).
n Finally, the Legislature should include in the Board’s
statutes a definition of Arizona resident so all appli-cants’
eligibility is determined based on the same resi-dency
requirements (see Finding II, pages 19 through
23).
10. The extent to which termination of the Board would
significantly harm the public health, safety, or welfare.
Terminating the Board would not significantly endanger
the public health, safety, and welfare. The Arizona Medical
Student Loan Program is only one of a number of state and
federal programs that place health care professionals in
medically underserved areas of Arizona (see Other Perti-nent
Information, pages 25 through 31). However, the
Board does provide substantial funding to approximately
16 medical students each year who, in turn, provide a
minimum of 2 years of care to Arizona residents in rural
and other medically underserved areas. According to the
Sunset Factors
40
OFFICE OF THE AUDITOR GENERAL
Board’s records, since its inception, 38 doctors have pro-vided
a combined total of more than 104 years of service to
medically underserved areas of Arizona during their years
of commitment.
If the Legislature were to terminate the Board, a phase-out
of the program would be beneficial to those students who
currently are receiving funding. In addition, the Board or
another entity is needed to approve service sites of those
who have yet to fulfill their service obligations and to
monitor those who are currently fulfilling their service ob-ligations.
n First, those students who are currently receiving pro-gram
funding would have to incur unanticipated debt
from other sources to complete their medical education
if the program were terminated. According to the
Board, most students currently receiving funding plan
to participate in the program for four years. If the pro-gram
were terminated, these students would have to
find other sources of funding, but would still owe a
minimum two-year service commitment or would
have to repay their loans.
n Second, the Board approves service sites for those
doctors who are ready to fulfill their service obliga-tions.
If the Board were terminated, an alternative en-tity
should approve service sites.
n Finally, the Board monitors doctors who are currently
fulfilling their service obligations to ensure that the
doctors serve the appropriate amount of time. If the
Board were terminated, an alternative entity should
monitor the service obligations.
11. The extent to which the level of regulation exercised
by the Board is appropriate and whether less or more
stringent levels of regulation would be appropriate.
Since the Board is not a regulatory agency, this factor does
not apply.
Sunset Factors
41
OFFICE OF THE AUDITOR GENERAL
12. The extent to which the Board has used private con-tractors
in the performance of its duties and how ef-fective
use of private contractors could be accom-plished.
The Board has not used private contractors and there does
not appear a need to do so.
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APPENDIX
OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
Appendix
Table 3
Board of Medical Student Loans
Health Professional Scholarship and Loan Repayment Programs
Program
Sponsoring
Agency Administrator Description
Arizona Medical Stu-dent
Loan Program
State of Arizona Board of Medical
Student Loans
State program established in 1977 that provides financial sup-port
to Arizona medical students who:
Ü Are residents of the State;
Ü Agree to specialize in primary care and practice medicine
in rural and other medically underserved areas after com-pleting
residency training.
National Health Service
Corps Scholarship Pro-gram
U.S. Department
of Health and
Human Services
(DHHS), Bureau
of Primary
Health Care
Arizona Depart-ment
of Health
Services (ADHS),
Office of Primary
Care Resources
Federal program that underwrites training and pays full tui-tion
and fees for eligible primary health care students:
Ü Selected students agree to provide primary health care
services in federally designated Health Professional Short-age
Areas (HPSAs) after completing training;
Ü Eligible providers include primary care physicians, family
nurse practitioners, certified nurse-midwives, and physi-cian
assistants.
a-i
OFFICE OF THE AUDITOR GENERAL
Appendix
Table 3 (Cont’d)
Board of Medical Student Loans
Health Professional Scholarship and Loan Repayment Programs
Program
Sponsoring
Agency Administrator Description
National Health
Service Corps Loan
Repayment Program
DHHS, Bureau of
Primary Health Care
ADHS, Office of
Primary Care Re-sources
Federal program that repays loans incurred by health care
professionals who agree to a 2-year commitment to provide
primary health care services in federal HPSAs.
Arizona Loan Re-payment
Program
DHHS, Bureau of
Primary Health
Care; and the State of
Arizona
ADHS, Office of
Primary Care Re-sources
Joint federal and state program established in 1994:
Ü The federal government provides a dollar-for-dollar
match to states to repay qualifying educational loans for
primary health care providers who agree to practice in a
public or nonprofit entity located in a federally desig-nated
HPSA.
Rural Private Primary
Care Provider Loan
Repayment Program
State of Arizona ADHS, Office of
Primary Care Re-sources
State program established in 1997:
Ü Repays educational loans for physicians, dentists, nurse
practitioners, certified nurse-midwives, and physician as-sistants
with current or prospective rural primary care
practices located in medically underserved areas of the
State of Arizona;
Ü Supported by tobacco tax revenues.
a-ii
OFFICE OF THE AUDITOR GENERAL
Appendix
Table 3 (Concl’d)
Board of Medical Student Loans
Health Professional Scholarship and Loan Repayment Programs
Program
Sponsoring
Agency Administrator Description
Indian Health Serv-ices
(IHS) Scholarship
Program
DHHS, Indian
Health Services
Twelve IHS Area
Offices around the
United States, in-cluding
three that
serve Arizona.
IHS operates three scholarship programs to assist American
Indian and Alaska natives to pursue health careers:
Ü Section 103 Program: Provides financial support to students
who enroll in courses leading to a bachelor’s degree in a
specific professional area.
Ü Section 103p Program: Provides financial support to stu-dents
who enroll in courses that will prepare them for ac-ceptance
into health professions schools.
Ü Section 104 Program: Provides financial assistance to stu-dents
enrolled in health professions and other programs.
Students agree to enter into a service obligation with the
IHS to provide health services upon completion of their
health education programs.
IHS Loan Repayment
Program
DHHS, Indian
Health Services
Twelve IHS Area
Offices around the
United States, in-cluding
three that
serve Arizona.
Repays health professionals’ educational loans in exchange
for a two-year service obligation in an IHS facility or ap-proved
Indian health program. Program is not limited to
American Indians and Alaska Natives.
Source: Auditor General staff analysis of program reports, program literature, and interviews with agency personnel.
a-iii
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OFFICE OF THE AUDITOR GENERAL a-iv
Appendix
OFFICE OF THE AUDITOR GENERAL
Table 4
Board of Medical Student Loans
Health Professional Education, Training, Recruitment, and Employment Programs
Program
Sponsoring
Agency Administrator Description
Arizona Area Health
Education Centers
(AHEC)
DHHS, Bureau of
Health Professions
Rural Health Office
University of Ari-zona
Established in Arizona in 1984 with federal funding:
Ü Five regional AHEC centers operate in Arizona. They
serve as a state-wide, community-based infrastructure for
recruiting and retaining health professionals in rural and
medically underserved areas.
Arizona Health Pro-viders
Resources Pro-gram
Rural Health Office,
University of Ari-zona
Rural Health Of-fice,
University of
Arizona
Program provides health professional recruitment and re-tention
assistance in Arizona’s rural and medically under-served
areas. The program is a founding member of the Na-tional
Rural Recruitment and Retention Network.
Arizona Rural Health
Professionals Pro-gram
State of Arizona University of Ari-zona,
College of
Medicine, Program
in Community
Responsive Medi-cine
State program established in 1994 to provide Arizona health
professions students intensive clinical training experiences in
rural Arizona:
Ü Each year, the State’s universities select 15 medical stu-dents,
10 nurse practitioner students, and 4 pharmacy
students to participate.
a-v
Appendix
OFFICE OF THE AUDITOR GENERAL
Table 4 (Concl’d)
Board of Medical Student Loans
Health Professional Education, Training, Recruitment, and Employment Programs
Program
Sponsoring
Agency Administrator Description
Federal Community
Health Centers
DHHS, Bureau of
Primary Health Care
DHHS, Bureau of
Primary Health
Care
Twelve federally qualified Community Health Centers oper-ate
in Arizona:
Ü Provide family-oriented primary and preventive health
care services for people living in rural and urban medi-cally
underserved areas;
Ü Located in areas where economic, geographic, or cultural
barriers limit access to primary health care for a substan-tial
portion of the population;
Ü Private, nonprofit, Arizona Association of Community
Health Centers provide support.
J-1 Visa Waiver Pro-gram
U.S. Immigration
and Naturalization
Services
ADHS, Office of
Primary Care Re-sources
J-1 Visa Waivers allow foreign doctors to waive federal re-quirements
to return to their home countries after complet-ing
medical training if a federal agency or state health de-partment
so requests:
Ü The Arizona Department of Health Services may request
up to 20 J-1 Visa waivers per year for doctors to work at
least three years in medically underserved areas.
Source: Auditor General staff analysis of program reports, program literature, and interviews with agency personnel.
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OFFICE OF THE AUDITOR GENERAL
Agency Response
OFFICE OF THE AUDITOR GENERAL
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May 9, 2000
Debbie Davenport, Auditor General
State of Arizona
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, Arizona 85018
Dear Ms. Davenport:
The Board of Medical Student Loans appreciates the objective evaluation of the Arizona
Medical Student Loan Program conducted by your office. The research your team did on
the Nebraska program will be helpful to us in improving our interview evaluation form.
We will also be implementing other recommendations made by the audit team.
FINDING I
Changes to Board’s Statutes Could Help Clarify Service Area and Retention
Tracking Requirements
The Board of Medical Student Loans has relied upon the evaluation of service sites by
the Arizona Department of Health Services (ADHS), the state agency responsible for
determining medically-underserved areas. ADHS recommended approval of the sites in
Prescott, Lake Havasu City, and Flagstaff, which were subsequently approved by the
Board for physicians meeting their service commitments to the Arizona Medical Student
Loan Program.
Prescott/Mayer and Humboldt:
ADHS recommended approval of the site of the physician in Prescott who located her
practice less than 20 miles from Mayer and 10 miles from Humboldt. Mayer/Humboldt
is a medically underserved area. Like many communities in Arizona, Mayer and
Humboldt lack the facilities necessary to attract and support doctors. There was no
facility available in Mayer or Humboldt to support a practice when this physician started
serving these towns. She was the first full time pediatrician in the area when she began to
practice in this vicinity.
Lake Havasu City and outlying areas:
ADHS recommended approval of the Lake Havasu City physician who provides vascular
and general surgery, and who has been the only vascular surgeon in the area, which
extends along the Colorado River. Evaluations of medically-underserved areas by ADHS
are only done for primary care and this physician was a student in the Arizona Medical
Student Loan Program before it required primary care service. However, planning
studies in the service area reported a community need for vascular surgery specialists,
and the lack of a vascular surgeon available for timely consultations on hospitalized
patients was of particular concern to the hospital and attending physicians. Patients were
being sent by helicopter to Phoenix. ADHS recommended approval of this physician’s
service to the Board of Medical Student Loans. This physician has also filled in for the
general surgeon in Parker, AZ, which is designated both a Medically Underserved Area
(AzMUA) and a Health Profession Shortage Area (HPSA).
Flagstaff/Winslow:
The Board of Medical Student Loans approved this physician’s service based upon
ADHS’s recommendation of approval. The physician serves not only Flagstaff but also
Winslow Hospital, which provides services to the Native American population through
the Indian Health Service. At the time of approval, Winslow was reported by ADHS as a
medically-underserved area and Flagstaff as having a Medically Underserved Population
designation (MUP, designated by the Governor of Arizona).
Non-Profit Facility serving Indigents in Mesa:
One doctor is fulfilling his service obligation working with indigent and working poor
individuals without insurance coverage for chemical addiction, in an urban area of the
State. The physician began working at the facility during his training in Toxicology. It is
difficult to recruit physicians to serve this population and the Mesa facility serves only
people who lack insurance coverage for chemical addiction. A large portion of the
patients have undiagnosed or untreated medical problems. Once patients are medically
safe from the complications of their withdrawal syndrome, the staff establishes an
ongoing treatment regimen. The facility is supported by the Arizona Department of
Health Services, United Way, Maricopa County, and the cities of Phoenix, Tempe and
Mesa. The Board approved his service to this medically-underserved population.
Benson:
In the approval of Benson as a service site for two family practice physicians, the Board
considered several factors. It was reported to the Board by ADHS that the census figures
say that there is a population of 9000 but that there are 12,000 – 15,000 in the service
area. Benson is a rapidly growing rural area that had six male physicians in Benson when
the decision was made, including one that planned to retire the next year and one that
wasn’t working full time. There were no female physicians and no obstetrical services.
The community was averaging 125-130 live birth deliveries per year and patients were
going to Tucson or Sierra Vista for care. The approved female physician planned to
emphasize gynecology in her practice and provide pediatric as well as adult care. She and
the other approved physician and his brother have plans to share on-call with her and
provide obstetrical services. Both physicians approved are from the area and the health
care people in the community expressed a desire to have them return to the community
and be part of their master health care plan for the area. Both physicians plan to make a
lifelong commitment to offer full spectrum family practice to the community. ADHS did
not make a recommendation, but the Board referred back to the Sunset Review hearing
where it was made clear that the Board was to concentrate on rural areas. The Board
reasoned that this is a growing rural community that wants these two physicians from the
area, one of them born and raised there, to provide medical services there. The
physicians were approved for service in Benson.
Recommendations:
1. The experience of the Board of Medical Student Loans in administering this program
has led to the conclusion that the Board needs greater flexibility in approving service
sites that meet the spirit and intent of the program in serving medically-underserved
and rural people in Arizona.
The finding of the Auditor General is agreed to and the audit recommendation will
be implemented.
2. The Board agrees that the statutes should be amended to define rural.
The finding of the Auditor General is agreed to and the audit recommendation will
be implemented.
3. The finding of the Auditor General is agreed to and the audit recommendation will
be implemented.
4. The Board of Medical Student Loans agrees that the statutes should be amended to
limit the amount of time the Board must track doctors who continue to practice in
rural and medically-underserved areas. We recommend that the statute read that the
Board “collect and maintain data on the retention of doctors who practice in rural and
other medically underserved areas for at least ten (10) years.
5. We believe that 10 years will demonstrate the physician’s intention to continue or not
in providing this needed service to Arizona, and make it less burdensome for
university staff. At the same time, including the word “minimum,” allows the Board
to continue to collect data if staff time allows.
6. The finding of the Auditor General is agreed to and the audit recommendation will
be implemented.
FINDING II
Changes in Applicant Selection Process Needed to Ensure Equal Consideration for
All Students
The Board of Medical Student Loans is pleased with the cooperation between the faculty
and staff of The University of Arizona College of Medicine (UA) and Midwestern
University and their Arizona College of Osteopathic Medicine (AZCOM) in bringing the
private osteopathic medical students into the Arizona Medical Student Loan Program.
The legislative change was effective in August 1999 for 1999-2000.
The UA College of Medicine Program Coordinator Senior made two trips to AZCOM to
work out the details of the joint participation with faculty and staff and to present the
program to the osteopathic students. Arizona Department of Health Services (ADHS)
also sent a representative to be part of that presentation to the students. Midwestern’s
Director of Financial Aid and AZCOM’s Associate Dean for Academic Affairs attended
two meetings of the Board of Medical Student Loans and plan to continue to attend in the
future. The written information, application and contract have been revised to include
both the allopathic and osteopathic students, and a standardized interview instrument and
an interview evaluation form was developed and used for recent interviews of UA and
AZCOM student applicants. Eligible osteopathic students who applied have been
approved for funding for 1999-2000.
Recommendations:
To ensure that all eligible applicants are given equal and fair consideration for available
funding,
1. The Legislature should add a definition of Arizona resident to the Board’s statutes.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
2. The Board should develop and use standard interview instruments for applicant
interviews.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
3. The Board should adopt a scoring system to rank applicants and guide selection of the
most qualified applicants for funding.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented. Such a scoring system should not preclude the Board from using its
professional judgment in applicant selection, as noted in the Audit Report.
We are looking forward to working with the Legislature to implement the recommended
changes in the statutes, which we believe will strengthen the Arizona Medical Student
Loan Program.
Sincerely,
Diane Brennan
Chairperson
Board of Medical Student Loans
DB:mjg
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