Many communities in the US, especially those in rural areas, have limited access to healthcare. For example, some areas have significantly fewer doctors per capita than others, which might contribute to geographic inequities in health outcomes. This column discusses new research that shows how government designations of Primary Care Health Professional Shortage Areas – and an accompanying bundle of incentives from various programmes – can successfully attract physicians to areas of need. Between 2012 and 2017, designations led to meaningful increases in the number of early-career primary care physicians practicing in underserved counties. Geographically targeted policies can influence the distribution of primary care physicians across the country.
Access to healthcare is a major public policy issue. Within the US, policy debates often focus on demand-side factors like access to health insurance (e.g. Finkelstein et al. 2012, Courtemanche 2015, Gruber 2017, Alsan et al. 2024, Costa-i-Font and Raut 2025). However, the supply side of the market also matters: the ability to access healthcare requires healthcare providers, and the supply of providers may be inadequate in some areas. Recent estimates from the Health Resources and Services Administration indicate a national shortage of physicians that (i) will grow from about 124,000 physicians in 2027 to about 187,000 in 2037; (ii) will be greater for primary care specialties than others; and (iii) will be more pronounced in rural areas than metropolitan areas (Health Resources and Services Administration 2024). These trends raise important policy questions, as evidence suggests that physician shortages can contribute to preventable hospitalisations (Parchman and Culler 1999) and mortality (Gong et al. 2019), and that weaker supply of primary care is associated with worse population health (Starfield et al. 2005, Macinko et al. 2007).
To address unequal access to physicians across the country, policymakers identify areas with limited numbers of physicians per capita and try to increase resources to these areas. One prominent, national policy involves designating areas as Primary Care Health Professional Shortage Areas (HPSAs). These designations are used by several programmes to determine eligibility for physician incentives. For example, the HPSA Physician Bonus Program is administered by the Centers for Medicare and Medicaid Services (CMS) and pays 10% bonus payments for Medicare services furnished in HPSAs. Moreover, the National Health Service Corps (NHSC) uses HPSA designations for federal scholarship and loan repayment programs, a J-1 visa waiver programme uses the designations to allow foreign medical graduates practicing in HPSAs to remain in the US, and a Rural Health Clinic Program uses the designations as eligibility criteria for financial incentives to provide primary care in rural clinics.
Does designating shortage areas work?
In a recent paper (Khoury et al. 2025), we provided new evidence on the effectiveness of designating an area as a geographic Primary Care HPSA. We used data from several sources that span 2012 to 2017 to estimate the county-level effect of HPSA designation on the number of practicing physicians. Using a difference-in-differences research design, we compared the average number of physicians practicing in counties that were designated during our study’s time horizon (the treatment group) to the average number of physicians in a matched group of similar counties that were not designated (the control group), before and after the designated counties received their HPSA designations.
We first examined how designations impacted the number of physicians practicing in a county by career stage. Figure 1 illustrates the effects of designations on the number of early-career, mid-career, and late-career primary care physicians (PCPs) practicing in a county. Each graph corresponds to a different career-stage outcome and plots the average difference between the number of doctors in the treatment group and the number of doctors in the control group, relative to the difference in the year before the designation, with counts expressed per 10,000 population. We defined an early-career PCP to be one who completed medical school between five and ten years ago (to capture physicians making initial location decisions after completing their residencies), a mid-career PCP to be one who graduated between 10 and 30 years ago, and a late-career PCP to be one who graduated more than 30 years ago. Panel A shows an increase in the number of early-career physicians that emerged about a year after designation. In contrast, panels B and C show no evidence of changes in the counts of mid-career or late-career physicians, respectively.
Figure 1 Impact of HPSA designations on PCPs per 10k by career stage
Notes: These graphs show the dynamic impact of HPSA designations on county-level primary care physician (PCP) counts per 10,000 population by career stage. Each graph plots difference-in-differences point estimates and 95-percent confidence intervals.
We found that HPSA designation, on average, led to a statistically significant increase of 0.11 early-career PCPs per 10,000 population. Given the average treatment county population in our sample of 59,000, this estimate corresponds to roughly 0.65 more doctors per county. While the absolute number is modest, it corresponds to a 23% increase relative to the baseline mean number of early-career PCPs in designated counties. Because HPSAs are areas with few physicians per capita by definition, even a modest increase in the quantity of practicing physicians can meaningfully improve access to care for the community in need.
Next, we examined the medical school backgrounds of the physicians who responded to HPSA designations. Specifically, we explored whether the early-career physicians who responded had attended ranked or unranked medical schools, which might serve as a rough proxy for quality. Figure 2 shows that the post-designation increase in early-career PCPs was driven entirely by those who attended ranked medical schools. We estimated an increase of 0.099 early-career, ranked PCPs per 10,000 population, a 40% increase that translates to roughly 0.58 more physicians in an average treatment county.
Figure 2 Impact of HPSA designations on early-career PCPs per 10k by ranked versus unranked medical schools
Notes: These graphs show the dynamic impact of HPSA designations on county-level early-career primary care physician (PCP) counts per 10,000 population by ranking of medical school. We used the 2018 U.S. News & World Report rankings of medical schools for primary care to determine ranked and unranked schools. Each graph plots difference-in-differences point estimates and 95-percent confidence intervals.
Finally, we conducted a set of supplementary exercises to assess the broader effects of HPSA designations. We examined whether designations influenced the location decisions of physicians in non-primary care specialties (eligible for bonus payments but not NHSC scholarships and loan repayments), as well as nurse practitioners and physician assistants (eligible for NHSC programmes but not bonus payments). We also tested whether physician supply changed after a county lost its HPSA designation and the associated incentives. We found no statistical evidence of meaningful effects from these analyses.
Overall, our findings provide strong evidence that primary care HPSA designations impacted location decisions of early-career PCPs from ranked medical schools, but much less evidence of responses from other types of providers. While our study does not pin down which specific HPSA-tied programme is driving our estimates, these patterns are consistent with the incentives embedded in the NHSC scholarship and loan repayment programmes. These programmes are likely more attractive to early-career PCPs, who are more likely than later-career PCPs to be fulfilling scholarship requirements or to have student loan debt. On the other hand, bonus payments can also be expected to have an outsized influence on early-career physicians, as these physicians are just starting their careers and choosing where to practice initially, whereas later-career physicians are more likely to face higher costs of relocating already-established practices.
Implications for policy
The US government has been designating HPSAs for decades to guide major physician incentive programmes, yet causal evidence on the effects of these designations is scarce. Our study provides a first step towards evaluating the efficacy of this overarching policy and shows that HPSA designations can attract doctors to areas in need. Our results suggest that place-based healthcare policies are a useful tool for improving access to healthcare across the country.
At the same time, our findings highlight the potential for more targeted incentives to increase cost-effectiveness. We found clear evidence of responses from early-career PCPs, but no evidence of effects for PCPs in later career stages, who make up the bulk of the workforce. Bonus payments are not targeted by career stage, so the programme likely directs substantial funds to physicians who are not responsive to these incentives on the margin. Therefore, targeting larger bonus payments toward early-career physicians and reducing or eliminating bonus payments to other physicians may increase the program’s effectiveness while reducing costs.
Our results also highlight the need for more research related to HPSA policy. Other work shows that physicians tend to practice near their residency locations (Falcettoni 2018), raising the question of when and how policy can effectively shift practice locations, and for which physicians. Additional research in the vein of Holmes (2005), which uses data from the 1980s and 1990s to analyse the earlier effects of NHSC loan repayment, could help identify the effects of specific HPSA-tied programmes and their associated incentives. Recent research has also started to investigate another important question of how shortage designations influence population health (McClellan 2024, Sauve‐Syed 2025).
Finally, HPSAs represent just one component of a broader policy toolkit. Evidence indicates that a wide range of approaches can play a role in increasing regional physician supply, including local- and state-level loan repayment programmes (Kulka and McWeeny 2019, Ghosh 2024), Medicaid expansion (Huh and Lin 2024), visa waiver programs for international medical graduates (Braga et al. 2024), and subsidies for training residents in high-need areas (McNamara and Pineda-Torres, 2024). Evidence from Brazil shows that medical school quotas for students from underserved areas can be effective as well (Costa et al. 2024). Continued research on the costs and benefits of different approaches to addressing physician shortages is crucial for designing effective, evidence-based policy that improves healthcare access for communities in need.
Source: VOXeu
