‘Cause there ain’t no money for ’em…that’s why.

By ‘hills’ I’m implying rural America, and unfortunately, most people living there pay for doctors through medicare.  As I’m sure you’ve heard, this lovely Guv program pays less than cost in many circumstances, which is a great primer for how to go bankrupt, but isn’t a good way to keep doctors around.

In general, there are many doctors who would gladly forgo the demand for actual dollars as compensation for their years of training and constant hard work.  American history is full of examples of small-town country docs accepting cremed marmelade and a basket of Emu eggs as payment for little Dirk’s delivery and circumcision.  Those days are disappearing, of course.  The reason for it is actually quite simple:  Medical training today costs close to 8 yearly incomes of an average middle-class American family.  In rural areas, where most families are hovering at the poverty line, training a doctor would cost roughly (emphasis on rough) the entire yearly salary of 3 low-income rural families for 8 solid years.

Few can afford this, of course.  Especially altruistic types, who tend to be broke in the first place.  So would-be doctors these days go into debt for the money.

And then the banks come callin’…and they aren’t happy with 3 chickens and a haircut every month for the next 40 years.  They want cash.  Bear in mind that Uncle Ebeneezer will at no time recognize concepts like “quaint Americana” or the notion of “civic duty”.  Civic duty to your average banker consists of leaving only one desk light on at night…the one illuminating the stunning windfall of interest payments soon to be arriving from the hapless big-hearted doc in Flish, SD.

“But!”  Our wise Guv exclaims, “Let’s institute loan repayment program! We’ll make it available to doctors who are willing to work in areas we will designate as ‘under-served’.  We’ll offer HUGE sums of loan-repayment money.  Something like $20,000!  Who can resist that?”

Great idea.  Except that every great idea from government has to be governmented, which then quickly turns it into a really stupid idea.  Governmenting.  It’s my new invention.  I’ve transmorgified a noun into a verb.  Since it’s my invention, I get to define it: 

Governmenting, v. – The act of taking a perfectly reasonable idea that could benefit vast swaths of Americans, endorsing it, and then subjecting it to a kaleidescopic array of regulations, bizarre armchair ethics, vague definitions and hyper-polysyllabic word definitions such that the initial idea is not only forgotten but dwindles into laughable obsolescence.

Yes, the Guv offers an average of $20,000 per year of loan repayment.  Sounds fantastic, right?  Except that the average doc owes $250,000.  “Quit complaining, you brat!”  You might exclaim, “It’s pretty good money even if it’ll take you awhile to pay off the loans.”

Actually, that’s true.  Some people work an entire year just to pull in around $20,000.  In fact, docs are still occasionally heading for the hills with just this argument ringing in their ears.  As he drives down dusty I-90 toward the incomprehensibly-named “Crow Agency” Montana (leave it to the Guv to name a town an agency), young Dr. SW thinks to himself, “Hmmm.  250k divided by 20k equals 12.5 years.  Working out here brings me substantially less in yearly salary, so that 20k will be all I can contribute to my loans.  But 12 years.  That ain’t bad.  I can take it.  Nice view, after all.

But here’s the problem…the REAL problem with Governmental loan repayment programs.  It’s very simple.

The repayment is taxed.

The English language is too limited to describe the stupidity of this.  The same entity that gives the money takes it right back before the hapless doc – standing in his new Wrangler jeans at the bean-mash and Chevy show – actually gets to pay those loans.  And the entitiy who paid the loan doesn’t think of themselves as the same as the entity who is doing the re-taking so they often don’t even mention this taxation concept to docs before they sign their contracts.

To someone’s credit (no idea who), they’re coming clean recently about the taxation issue, inserting a disclaimer into their recruiting material.  Jammed forgettably into the back of the glossy packet I received extolling the virtue and adventure of working on the frontier, was this:

Participants in the LRP (loan repayment) will be paid up to $20,000 per year for signing a 2-year LRP contract and agreeing to serve full-time clinical practice at a designated Indian health program priority site in the United States.

It should be noted that LRP benefits have been ruled to be subject to FICA (social security) taxes.  This means that 7.65% of the loan repayment amount will be withheld and sent to the SS Administration.  Additionally, 20% of the LRP contract amount will be sent directly to the Internal Revenue Service to assist in paying the additional income taxes incurred as a result of participating in LRP.

This means nearly 30% of a doctor’s loan repayment grant is re-taken before it can be applied to the actual loan.  And remember, the base salary of rural docs is significantly lower than that of city counterparts, so the grant repayment is important.

The system needs repairs on many levels.  Universities need to charge less (maybe landscape less or something).  Banks need to make funds available at less profit.  Training needs to be shorter – everywhere else in the world, doctor training is 6 years after high school and then residency.  In the U.S. the training takes 8.  And a big part of the solution needs to be Government programs that are genuinely viable, moral and rational.  The current system tricks doctors into taking low-paying jobs in distant lands and traps them there by helping them with much less of their loans than they expected.

There’s lots of things that need fixing, but one of the first should be to stop all the governmenting.