Financial incentives for health professionals serving underserved areas

Evidence Rating  
Evidence rating: Some Evidence

Strategies with this rating are likely to work, but further research is needed to confirm effects. These strategies have been tested more than once and results trend positive overall.

Disparity Rating  
Disparity rating: Potential to decrease disparities

Strategies with this rating have the potential to decrease or eliminate disparities between subgroups. Rating is suggested by evidence, expert opinion or strategy design.

Health Factors  
Date last updated
Community in Action

Financial incentive programs offer scholarships and loans with service requirements, educational loans with a service option, and loan repayment or forgiveness programs to encourage health care providers to serve in regions that are rural, underserved, or Health Professional Shortage Areas (HPSAs). Such incentives are available to various types of providers, including physicians, nurse practitioners (NPs), physician assistants (PAs), nurses, dentists, and mental health providers, but typically focus on primary care and family medicine practitioners1.

What could this strategy improve?

Expected Benefits

Our evidence rating is based on the likelihood of achieving these outcomes:

  • Increased availability of health professionals in underserved areas

Potential Benefits

Our evidence rating is not based on these outcomes, but these benefits may also be possible:

  • Increased access to care

What does the research say about effectiveness?

There is some evidence that financial incentive programs increase the number of health care providers caring for patients in underserved areas2, 3, 4, 5, 6, 7. Additional evidence is needed to confirm effects and determine which incentives are most effective2, 8.

Participants in financial incentive programs are more likely to care for patients in underserved areas than non-participating peers3, 7, 9, 10. On average, participants remain in underserved areas longer than non-participants3, 10. However, providers may not always stay in rural or remote communities following their commitment8.

Scholarships8, loan repayments8, 9, and loan forgiveness programs appear to support recruitment of health care providers to underserved areas7. Loan repayment programs also appear to increase the duration providers practice in these locations2, 6, 11. A Maryland-based study suggests that physicians in rural areas who receive loan repayments remain in their positions beyond their service commitment9. Surveys of administrators at safety net health care practices indicate that loan repayment and forgiveness programs may make it easier and faster to recruit providers for primary care, behavioral health, and dental health care12. Financial incentives are more effective as part of multi-dimensional programs than incentives alone5, 8, and incentive programs offered at the end of training may be more successful than those offered earlier10. Surveys suggest that competitive salaries, professional development, knowledgeable support staff, and professional support may increase the likelihood of provider retention in rural or underserved areas following the completion of service commitments13.

Mid-level providers such as nurse practitioners (NPs), nurse midwives, and physician assistants (PAs) may be more likely to practice in rural areas than other health care professionals7. Primary care NPs14, 15 and family medicine NPs16 are also more likely to practice in rural or underserved areas than NPs with other specialties. Additional research is needed about financial incentive interventions to bring nurses, allied health professionals, and indigenous health care practitioners to rural or underserved areas17, 18.

Research suggests that providers who participate in financial incentive programs may have elected to practice in underserved areas even without incentives9, 10, 11, 18. A study of the National Health Service Corps (NHSC) found that motivations of participating providers was often two-fold: physicians wanted loan repayment assistance as well as to care for underserved populations19. Rural background or origin is also associated with the decision to practice and remain in rural communities3, 4, 7, 11, 20, 21.

Experts suggest that expanding financial incentives with service requirements to include general surgeons22, 23, OB/GYN physicians, nurse midwives24, and telehealth providers offering mental health care23 may increase access in rural and underserved communities.

How could this strategy advance health equity? This strategy is rated potential to decrease disparities: supported by some evidence.

There is some evidence that financial incentive programs have the potential to decrease disparities in access to care for patients in underserved areas by increasing the number of health care providers in rural and urban underserved areas2, 3, 4, 5, 6, 7. Additional evidence is needed to confirm effects.

Loan forgiveness or repayment programs, often funded by state governments or the National Health Service Corps (NHSC), may support increased access to care for patients in underserved areas by requiring providers to serve in safety net health care practices, including primary care, behavioral health, and dental health care12. Participating providers typically remain in underserved areas longer than non-participants3, 10. A Maryland-based study suggests that physicians participating in a loan repayment program care for more patients receiving Medicare than non-participating providers, which may increase access to care for older adults with low incomes9.

Overall, rural populations in the U.S. have higher rates of chronic health conditions, experience more poverty, and have significantly higher mortality rates than urban areas. Lack of access to primary care physicians is one component contributing to higher mortality rates33. Today, approximately 20% of the U.S. population resides in rural areas, but only 10% of physicians provide care there34. Additionally, half of rural physicians are over 55, and a third are scheduled to retire by 203335, creating a substantial and ongoing need to train and retain rural providers.

What is the relevant historical background?

In 1907, the American Medical Association (AMA) began publishing medical school ratings36. Shortly after, medical system reformer Abraham Flexner’s 1910 report asserted that there were too many medical schools in the U.S. and that they produced poorly trained physicians37. The Flexner Report contributed to decisions to virtually end women’s admission to medical schools and severely restrict Black students’ admittance38, 39. Medical school programs standardized38 and began charging higher tuition and fees, which further limited who could attend. At the same time, graduates may have been drawn to urban areas post-graduation due to higher salaries, larger patient bases and networks of health professionals, and more modern technology and facilities, such as laboratories36. By the 1920s, public health officials warned that fewer providers were practicing in rural areas36.

In the 1960s and 1970s, there were efforts to increase access to college and health professional schools for students identifying as minorities, from low income backgrounds, and for women. Recruitment efforts, pipeline programs, and affirmative action policies were designed to address the long history of structural barriers that prevented underrepresented minority students from enrolling in higher education, including medical schools40, 41, 42, 43, 44, yet racial disparities in medical school enrollment persisted40, 41, 44.

In the 1970s, Congress established the National Health Service Corps (NHSC), awarding scholarships to primary care providers in exchange for a minimum of two years’ service in Health Professional Shortage Areas (HPSAs)45. In 1987, NHSC expanded to increase the number of spots for providers in HPSAs. The Patient Protection and Affordable Care Act of 2010 (ACA) granted the NHSC permanent authorization along with a mandatory funding stream45.

The number of medical students with rural backgrounds has been declining since the early 2000s and underrepresented minority students with rural backgrounds remain a small percentage of medical students; for example, less than 0.5 percent of new students in 201746. As of 2023, only 7% of physicians identify as Hispanic or Black47. The cost of medical education likely plays a significant role in the small numbers of underrepresented minority and rural students pursuing medicine47.

Equity Considerations
  • How can financial incentive programs address the health care needs of both rural and urban underserved areas? Can underserved practices partner directly with programs?
  • How can providers receiving financial incentives connect with formal or informal networks of support during their placement in a rural or underserved area to feel more integrated with the community?
  • What additional strategies can rural areas implement to retain providers?
Implementation Examples

The National Health Service Corps (NHSC) provides up to $50,000 in loan repayment and scholarships for physicians, dentists, advance practice nurses (nurse practitioners, certified nurse midwives), physician assistants, dental hygienists, and mental health professionals who work for two years in a Tier 1 Health Professional Shortage Area (HPSA)25. NHSC’s Students to Service Loan Repayment Program (NHSC S2S LRP) also provides up to $120,000 to fourth year medical students who commit to practice primary care in a HPSA for three years full-time or six years half-time; the 2024 program features a new Maternity Care Target Area (MCTA) Supplemental Award of up to $40,000 in additional loan repayment funding for maternity care health professionals who then practice in MCTAs26.

A number of other entities provide loan repayment programs. The Health Resources and Services Administration (HRSA), for example, offers a Nurse Corps Loan Repayment Program that repays 60% of qualified loan balances for two years of work at a critical shortage facility; for an optional third year, it will pay 25% of the original balance27. The Indian Health Service’s Loan Repayment Program provides up to $25,000 per year for two years for a variety of providers and allied health professionals; the contract may be extended annually until eligible loans (up to $50,000) have been paid28.

State funded loan repayment programs may complement the NHSC federal program25, 29, such as North Dakota’s ND Healthcare Professional Loan Repayment Program, the Oklahoma’s Health Care Workforce Training Commission’s Physician Loan Repayment Program, and New Hampshire’s State Loan Repayment Program30, 31, 32. States can also include other specialties in their loan repayment programs, for example, in North Carolina general surgeons practicing in HPSAs are eligible23.

Implementation Resources

Resources with a focus on equity.

RHIhub-Loan repayment - Rural Health Information Hub (RHIhub). Scholarships, loans, and loan repayment for rural health professions.

US DHHS-NHSC - U.S. Department of Health and Human Services (U.S. DHHS). National Health Service Corps (NHSC). Growing the primary care workforce by serving communities.

HRSA-NURSE Corps LRP - Health Resources and Services Administration (HRSA). NURSE Corps Loan Repayment Program (LRP). Registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty are eligible for loan repayment.

US DHHS-IHS - U.S. Department of Health and Human Services (U.S. DHHS). Indian Health Service (IHS). IHS Loan repayment program.

RTT Collaborative - RTT Collaborative. Rural education & training: Resources on rural residencies, training tracks, program locations, and financial resources.


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27 HRSA-NURSE Corps LRP - Health Resources and Services Administration (HRSA). NURSE Corps Loan Repayment Program (LRP). Registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty are eligible for loan repayment.

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31 OK HWTC-Loan repayment - Oklahoma Health Care Workforce Training Commission (HWTC). Physician Loan Repayment Program.

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