Economic-impact study promising for bill aimed at Arizona’s physician shortage

An economic-impact study by Rounds Consulting Group (RCG) found that Arizona and its rural areas “could realize significant economic and fiscal benefits” due to Sen. Heather Carter’s bill (SB 1354) that’s aimed at addressing Arizona’s physician shortage, should it pass.

Carter’s bill, which passed through the state Senate in March and is now in the House, would appropriate a total of $50 million from the state’s General Fund in the 2019-20 biennium. Specifically, in its current form, the proposed package allocates:

  • $20 million to AHCCCS for administering graduate medical education programs in critical access hospitals and community health centers in rural areas;
  • $11 million to the University of Arizona Health Sciences Center;
  • $10 million to the Department of Health Services to create a grant program that would provide funding to assist universities, community colleges, and health care institutions with specific efforts — funding for health care institutions, for example, would be awarded to help develop and run programs that use retired physicians and nurses to provide oversight and guidance to recent med- and nursing-school grads;
  • $4 million to the Department of Health Services for the primary care provider loan repayment program; and
  • $5 million to the Board of Medical Student Loans.

If passed, the bill would enable hospitals and community health centers to increase their number of physician residencies,” the RCG study, which the Arizona Hospital and Healthcare Association (AzHHA) commissioned, reads.

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To estimate impacts, RCG developed models on Yuma Regional Medical Center (YRMC), Kingman Regional Medical Center (KRMC), and Canyon Vista Medical Center in Sierra Vista (CVMC) — all three are rural hospitals.

The study breaks down the impacts of expanded medical residency programs in the hospitals combined (pictured below), as well as at each of the three hospitals individually. Together, RCG estimates that the impact of expanding the programs would result in 183 graduating physicians by year 10, with 137 of those physicians staying in the state.  


Image: SB1354 Impact on Kingman, Yuma, and Sierra Vista Hospitals (RCG)


AzHHA President and CEO Ann Marie Alameddin voiced her support in a press release:

“Physicians stay where they train after graduation,” Alameddin said. “Almost 75% of medical students who finish post-graduate training in Arizona stay in Arizona. This means state funding for physician residencies will move the needle on the state’s physician shortage and be a game-changer for rural communities.”

The bill, according to RCG’s estimates, would enable the three hospitals to directly create 225 new, high-paying jobs. And, it would allow the hospitals to directly produce “a direct economic output of $431.6 million by the tenth year of the program.”

When combined with “multiplier effects,” RCG reports that the programs proposed at those three hospitals would “support a total of 845 jobs, $374.8 million in wages, and produce $911.0 million in economic output by the tenth year of the program.”

The state, the study says, would collect $17.3 million in tax revenues, as a result, over 10 years.

Image: SB1354 Impact on Kingman, Yuma, and Sierra Vista Hospitals (RCG)


In the press release from AzHHA about the new study, RCG’s President and Chief Economist Jim Rounds said the same economics apply beyond the three hospitals, at the state level:

“I’m certain further studies would show the statewide impact could be four or five times higher,” Rounds said. 

A policy brief from the University of Arizona Center for Rural Health that details, specifically, the state’s shortage of primary care physicians, shows that Arizona currently meets 41.7 percent of its need for primary care physicians and ranks 44th in the nation for its total active primary care physicians per 100,000 people.

According to the brief, Arizona needs 563 primary care physicians to eliminate that specific shortage.