Rural areas in the United States face significant healthcare shortages, with 20% of the U.S. population living in rural areas but only about 10% of physicians practicing there[1]. Supporting doctors as small business owners in these areas can address both healthcare access and economic development challenges. This approach creates local jobs, contributes to the local economy, and improves the health of rural residents.

Rural communities struggle with limited access to healthcare services and higher rates of chronic diseases compared to urban areas[2]. Additionally, these areas often face economic challenges, including limited job opportunities and declining populations. By supporting doctors in establishing and maintaining private practices in rural areas, policymakers can address both healthcare and economic issues simultaneously.

Key Considerations

Benefits of Doctor-Owned Practices in Rural Areas

1. Job Creation: On average, each physician supports 17.1 jobs (including their own)[3].
2. Economic Contribution: Each physician generates an average of $3.2 million in economic output across their careers[3].
3. Community Investment: Physicians with rural backgrounds are 2.4 times more likely to practice in rural areas, providing stable healthcare access[4].

Challenges

1. Lower Revenue Potential: Rural hospitals have a median operating margin of -0.3%, compared to 2.3% for urban hospitals[5]. Private practices tend to be more profitable than hospitals overall, but face similar challenges in rural areas.
2. Staffing Difficulties: As of December 2023, 63% of Primary Care Health Professional Shortage Areas were located in rural areas[6].
3. Limited Resources: Rural practices may struggle to access capital for equipment and facility improvements[7].

Policy Options

1. Financial Incentives

• Implement tax credits for establishing or expanding rural practices.
• Expand loan forgiveness programs for doctors committing to rural areas for a specified period.

2. Business Support

• Provide business management training programs tailored for healthcare professionals.
• Establish mentorship networks connecting new rural practitioners with experienced ones.

 3. Technology Integration

• Offer grants for telemedicine equipment and training to expand service reach.
• Invest in rural broadband infrastructure to support modern healthcare technologies.

4. Workforce Development

• Create rural healthcare tracks in medical and nursing schools to expose students to rural practice.
• Develop and fund rural residency programs and rotations to attract new graduates.
• Implement “Grow Your Own” (GYO) Doctor programs to recruit and support students from rural areas through medical education.
  • Offer targeted scholarships or loan forgiveness programs for rural students committing to practice in their home communities.
  • Develop partnerships between rural high schools, community colleges, and medical schools to create clear pathways for rural students into medical careers.
  • Provide mentorship and support programs to help rural students navigate the medical education process.

Projected Outcomes

• Increased access to healthcare services in rural areas, potentially reducing emergency department visits by 25% for uninsured and 6% for insured patients[8].
• Increased employment, with each physician supporting an average of 17.1 jobs in their community[3].
• Improved health outcomes for rural residents through better access to preventive and local care.
• Long-term economic growth in rural communities through increased employment and local spending.

References

[1] Health Resources and Services Administration. (2023). “Rural Health Information Hub: Rural Healthcare Workforce.” https://www.ruralhealthinfo.org/topics/health-care-workforce

[2] Centers for Disease Control and Prevention. (2023). “Rural Health.” https://www.cdc.gov/ruralhealth/about.html

[3] American Medical Association. (2023). “The National Economic Impact of Physicians.” https://www.ama-assn.org/about/research/economic-impact-study

[4] Parlier, A. B., et al. (2018). “The road to rural primary care: A narrative review of factors that help develop, recruit, and retain rural primary care physicians.” Academic Medicine, 93(1), 130-140.

[5] American Hospital Association. (2023). “Rural Health Care.” https://www.aha.org/rural-health-care

[6] Health Resources and Services Administration. (2023). “Designated Health Professional Shortage Areas Statistics.” https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport

[7] National Rural Health Association. (2023). “Policy Documents.” https://www.ruralhealthweb.org/advocate/policy-documents

[8] Sharma, A. I., et al. (2021). “Impact of Rural and Urban Primary Care Physician Supply on Potentially Preventable Emergency Department Visits.” Journal of Rural Health, 37(2), 321-330.