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FY 2009 Budget Justification

Clinician Recruitment and Service
National Health Service Corps

FY 2007 Actual
FY 2008
FY 2009
FY 2009 +/-
FY 2008
$39,736,000 $25,729,000 -$14,007,000
NHSC Recruitment BA $85,230,000 $83,741,000 $95,230,000 +$11,489,000
Total NHSC $125,673,000 $123,477,000 $120,959,000 -$ 2,518,000
FTE (Ceiling) 72 85 85 ---
FTE (Ceiling Exempt) 66 55 55 ---

Authorizing Legislation: Sections 338A, B, and I of the Public Health Service Act

FY 2009 Authorization Expired
Allocation Method Competitive Awards to Individuals

Program Description and Accomplishments
The National Health Service Corps (NHSC) assists Health Professional Shortage Areas (HPSAs) in every State, Territory, and Possession of the United States to meet their primary care, oral, and mental health services needs. Over its 37-year history, the NHSC has offered recruitment incentives, in the form of scholarship and loan repayment support to more than 28,000 health professionals committed to service to the underserved. NHSC clinicians have expanded access to high quality health services and improved the health of underserved people.

The NHSC has, since its inception in 1972, worked closely with the federally-funded Health Centers to help meet their clinician needs. Currently, approximately 50 percent of the NHSC clinicians serve in Health Centers around the Nation. The NHSC also places clinicians in other community-based systems of care that serve underserved populations, targeting HPSAs of greatest need.

The NHSC Scholarship Program awards scholarships to health professions students committed to a career in primary care and service in underserved communities of greatest need. Awards are targeted to individuals who demonstrate characteristics that are significantly related to a probable success in a career of service to the underserved. The Scholarship Program provides a predictable supply of clinicians who will be available over the next 1 to 8 years, depending on the length of their training programs. Upon completion of training, NHSC scholars become salaried employees of organized systems of care in underserved communities.

The NHSC Loan Repayment Program offers fully trained primary care clinicians the opportunity to receive assistance to pay off qualifying educational loans in exchange for service in a HPSA of greatest need. This service commitment is for a minimum of two years in an underserved community. The loan repayment program recruits clinicians as they complete training and are immediately available for service, as well as seasoned professionals seeking an opportunity to serve the Nation’s most vulnerable populations.

The combination of these two programs allows flexibility in meeting the future needs (through scholars) and the immediate needs (through loan repayers) of underserved communities in the following ways:

In FY 2006:

NHSC Field Strength By Program / by Discipline (as of 09/30/06)

Program Discipline  
Total 658 2,752 66 622 11 1,722 474 48 445 493 91 829 7

SP = Scholarship Program participants
LRP = Loan Repayment Program participants
RR = Ready Responders
SLRP = State Loan Repayment participants
CSP = Community Scholarship participants (demonstration project defunded in FY 1999)
MD/DO = Allopathic/Osteopathic physicians
DD = Dentists
DH = Dental Hygienists
NP = Nurse Practitioners
PA = Physician Assistants
NM = Nurse Midwives
M&BH = Mental and Behavioral Health professionals
DC = Doctors of Chiropractic (Demonstration Project)

  • The NHSC had 4,109 clinicians in service to the underserved, which was 99 percent of the target of 4,147
  • NHSC clinicians provided primary care services to approximately 4.47 million people, exceeding the target of 4.1 million by 9 percent.
  • The percent of clinicians retained in service was 76 percent, which was 96 percent of the target. (Retention is measured at one year after fulfillment of service commitment)
  • The NHSC Jobs Opportunity List showed a total of 8,032 vacancies nationwide; of these, 1,141 were filled by NHSC clinicians, and 1,525 were filled by other, non-NHSC clinicians, totaling 2,662, exceeding the target of 2,200 by 21 percent.

In FY 2007:

  • The NHSC Scholarship Program made 113 new awards; 225 scholars were placed in service.
  • The NHSC Loan Repayment Program placed 899 clinicians in service through new loan repayment contracts.

In FY 2008:

  • The NHSC Jobs Opportunity List showed a total of 4,888 vacancies nationwide; of these, 2,704 (55 percent) are located in health centers.
  • The NHSC Scholarship Program is projected to make 84 new awards; there are 878 scholars in school or in training.

The NHSC Loan Repayment Program is projected to make 646 new awards. The NHSC had a Program Assessment Rating Tool (PART) review in 2002, and received a Moderately Effective rating. This assessment found that the NHSC had a clear purpose and was designed to have a unique and significant impact; that the program ensures clinicians honor their service agreements, uses information to improve outcomes, and had shown some efficiency improvements. The review noted that efficiency could be improved with greater flexibility in allocating funds between scholarships and loan repayments.

In response to this review, the NHSC has in recent years better targeted NHSC placements in HPSAs of greatest need: in 2006 placing 1,141 NHSC clinicians in sites with an average HPSA score of 13.7, a score which improved on the previous year and exceeded the target. (The HPSA score is a proxy for the degree of need for health professionals in an area. Scores range from 1 to 25, with 25 representing the greatest need.) The program has recruited increasing numbers of minorities: 42 new scholars and 245 new loan repayers in 2007 identified themselves as racial/ethnic minorities. The program has been as flexible as possible under the current law to allocate more funds to loan repayers to meet more of the immediate need in underserved communities, and is endeavoring to replace its legacy information system to further increase management efficiencies.

Funding includes costs associated with grant reviews, processing of grants through the Grants Administration Tracking and Evaluation System (GATES) and HRSA’s electronic handbook, and follow-up performance reviews.

Funding History

FY 2004 $169,903,000
FY 2005 $131,448,000
FY 2006 $125,441,000
FY 2007 $125,673,000
FY 2008 $123,477,000

Budget Request
The FY 2009 Request of $120,959,000 is a decrease of $2,518,000 below the FY 2008 Enacted level. The $11,489,000 increase in the Recruitment Line, which supports the NHSC Scholarship and Loan Repayment Programs, and the State Loan Repayment Program,* will focus on the recruitment of dentists into the NHSC: $1,000,000 of this additional funding will support four new dental student scholars who will be available to serve in future years as they complete their training. This is in addition to the 84 scholars projected to be supported by the baseline funding. The remaining $10,489,000 will support new loan repayment contracts for 210 dentists over and above the 716 new loan repayment contracts that are projected to be made in this year. This will add a total of 926 clinicians to the NHSC Field Strength immediately. The $14,007,000 decrease in the Field Line, which funds the salaries of the NHSC staff and Ready Responders, as well as the grants and contracts that support the programs’ recruitment and retention efforts and the administrative costs of the NHSC, is a reflection of the increased efficiencies and economies of scale experienced by the Bureau of Clinician Recruitment and Service (BCRS) as the procedures of the NHSC Scholarship and Loan Repayment Programs are integrated with the other scholarship and loan repayment programs within BCRS.

The NHSC will increase its recruitment activities to disseminate awareness of the program’s new focus on oral health in order to increase the number of dentists interested in participating in the NHSC Loan Repayment Program. Additionally, the NHSC will increase its outreach to underserved communities and offer technical assistance to enable them to complete the process of becoming designated as dental HPSAs and to post dental vacancies with the NHSC.

This focus on oral health is an effort to address a well-documented need. According to a 2000 Surgeon General Report, dental caries is the single most common childhood chronic disease. Every year 30,000 elderly Americans are diagnosed with oral cancer; lower income populations are disproportionately affected and less likely to receive treatment. As of March 2007 more than 9,000 dentists would be needed to reach the target ratio of one dentist for every 3,000 people in dental HPSAs nationwide. In 2006, the NHSC filled 340 of 782 dental vacancies; in 2007 the NHSC posted 500 dental vacancies.

As a significant source of highly qualified, culturally competent clinicians for the Health Center Program, as well as other safety net providers, the NHSC can build on its success in assuring access to residents of HPSAs, removing barriers to care and improving the quality of care to these underserved populations. The NHSC Program is working with many communities in partnership with State, local, and national organizations to help address their health care needs.

* The State Loan Repayment Program is a dollar-for-dollar match between the NHSC and the State to provide loan repayment to clinicians to work in that State. The program is administered by the Bureau of Clinician Recruitment & Service (BCRS).

Funding in FY 2009 for the NHSC Programs will support efforts to work with Health Centers and other community-based systems of care to improve the quality of care provided and reduce the health disparities gap. As measurement of these efforts:

In FY 2009:

  • The NHSC Field Strength is projected to be 3,466.
  • The number of individuals served is expected to meet the target of 3.39 million people.
  • The number of vacancies filled by all sources is expected to exceed the 2,200 target.
  • The average HPSA score of 13.6 for sites receiving NHSC clinicians is expected to be met.

The decrease in the NHSC Field Strength from 4,109 in FY 2006 to 3,466 in FY 2009 is the result of two separate but interrelated factors. The first is that the NHSC awarded more than 3,000 new two-year loan repayment contracts in the years 2003 – 2005. The second is that as many of these clinicians apply for amendments for their 3rd, 4th, and 5th year of service, there is less funding for new contracts. While the clinicians with amendments remain in the Field Strength, the number of new clinicians starting service is smaller than the number of clinicians who fulfill the service commitment and are no longer counted in the Field Strength, causing the projected decrease. With the additional funding requested, it is anticipated that the NHSC Field Strength will stabilize around the FY 2009 number.

# Key Outcomes FY 2004 Actual FY 2005 Actual FY 2006 FY 2007 FY
2008 Target/Est
Out-Year Target
Target Actual Target Actual
Long-Term Objective: Improve the distribution of health professionals in underserved areas
4.I.C.1 Increase the number of individuals served through the placement and retention of NHSC (Baseline-2001: 4.44 M) 3.8 M 4.44M 4.1 M 4.47 M 3.8 M Jul-08 3.48 M 3.39 M 2010:
20% over baseline
4.1 Increase the number of individuals served in all communities seeking NHSC assistance through NHSC placement, retention and other sources (Baseline: 5.9 M)                 2010:
7.08 M
4.I.C.2 Increase the field strength of the NHSC through scholarship and loan repayment agreements 3,943 4,602 4,147 4,109 3,706a Jul-08 3,563b 3,466 NA
4.I.C.4 Increase the percent of NHSC clinicians retained in service to the underserved DNAc DNAc 79% 76% 79% Nov-08 79% 79% NA


# Key Outputs FY 2004 Actual FY 2005 Actual FY 2006 FY 2007
FY 2008 Target/ Est. FY 2009 Target/ Est. Year Target / Est. Out-
Target / Est. Actual Target / Est.   Actual
Long-Term Objective: Improve the distribution of health professionals in underserved areas
4.I. C.3 Increase the number of NHSC-list vacancies filled through all sources 2,660 3,141 2,200 2,662 1,746 Jul-08 1,776 2,200d NA
4.I. C.5 Increase the average HPSA score of the sites receiving NHSC clinicians, as a proxy for service to communities of greatest need. 12.9 12.2 13 13.7 13.6 Jul-08 13.6 13.6 NA
Efficiency Measure
4.E Maintain or decrease the average cost to the NHSC program of a patient encounter $5.09 $4.97 $4.21 $4.72 $4.19 Jul-08 $4.17 $4.15 NA
Other Outputs
  Loan Repayments 1,058 1,216 - 929 - 899 646 926 NA
  Scholarships 189 164 - 97 - 113 84 88 NA
  Appropriated Amount ($ Million) $169.90 $131.45   $125.44   $125.67 $123.48 $120.96  


a The targeted field strength for FY 2007 may differ from that shown in the NHSC waterfall table. Whereas the waterfall table is continually updated, the performance reporting guidelines do no permit changing a previously established target for the “reporting” year.
b The FY 2008 target differs from that shown in the FY 2008 Congressional Justification, as this is an updated estimate consistent with the NHSC waterfall table
c Retention data was not available in FY 2004 and 2005 due to incomplete data collection. The program has reformatted the survey to reduce ambiguity, and the retention figures for FY 2006 are expected to be available in November 2007.
d 2009 target is lower than latest result reported (2006), reflecting an anticipated decrease in the number of new loan repayment contracts, due to increased amendments to previously awarded loan contracts.

Table 1. Impact on NHSC Field Strength of FY 2009 Budget Request
Fiscal Year 2004 2005 2006 2007 2008 2009
Scholarships 189 164 97 113 84 88
Sch. Cont. 103 86 37 19 78 78
Fed. LR 1,058 1,216 929 899 646 926
Fed. LR Amend. 343 603 558 648 774 674
State LR 217 532 280 280 280 280
Sch. Obligors 735 733 658 635 669 641
Loan Repayers 2,577 2,907 2,752 2,427 2,273 2,205
State LR 558 873 622 557 557 557
CSP 19 15 11 10 9 8
FED 54 74 66 66 55 55
(9/30) 3,943 4,602 4,109 3,695* 3,563 3,466
Grant 1,976 2,469 2,219 1,995 1,924 1,872
Non-Grant 1,967 2,133 1,890 1,700 1,639 1,594

* Estimate

Waterfall Assumptions:
1. Funding Distribution: 20% Scholarship/80% Loan Repayment
2. FED = USPHS Commissioned Corps Ready Responders