Income tax breaks may keep psychiatrists in state


DES MOINES, Iowa (AP) — With Iowa facing a psychiatrist shortage in the middle of sweeping changes to the county-based mental health system, one lawmaker thinks giving income tax breaks to psychiatry students will be enough to encourage them to practice in the state.

Republican Rep. Dave Heaton's bill was reviewed by the House Ways and Means Committee this week. It would waive state income taxes for psychiatrists with school debt who choose to practice in areas of Iowa that are medically underserved.

"We don't have enough psychiatrists in this state," the Mount Pleasant lawmaker said. "We're desperate. ... We just don't have the infrastructure to deal with the influx of people who will be seeking mental health services."

The Iowa Department of Revenue estimates Heaton's plan could get a psychiatrist who's in debt and making an average of $195,000 per year a tax break of about $10,000 each year.

Roger Tracy, assistant dean and director of the Office of Statewide Clinical Education Programs, a division of the University of Iowa Carver College of Medicine's administration, said the income tax break is not a bad idea but won't do the trick.

"We need to have incentives for Iowa medical school graduates to enter psychiatry training in-state ... that improves the retention rate," Tracy said.

The Office of Statewide Clinical Education Programs, which tracks the number of medical professionals in Iowa, reported a slight increase in the number of adult and child psychiatrists in Iowa over the past decade. But the demand has far outweighed the supply.

In 2012, there were 243 working psychiatrists, but employers in both urban and rural hospitals and clinics reported a need to fill 41 vacant positions.

Tracy said the demand would be even higher if many employers hadn't given up looking for a full-time psychiatrist to staff their clinics. Instead, they're contracting with cheaper psychiatric nurse practitioners or counselors to provide care.

Dr. Donald Black, director of the state's only psychiatry residency training program at the University of Iowa, said medical school graduates are turning away from the profession because it pays less than specialties like radiology or anesthesiology.

"Also I don't think the public is aware of their debt load and it often drives their decision-making," he said. "Lower-paid specialties like psychiatry are less attractive to medical school graduates who want higher-paying specialties ... to help pay off their loans."

Black said his residents typically enter the program already $160,000 in debt from medical school.

About 10 to 12 residents graduate from the program each year, but only about 40 percent stay in the state.

"We're probably in deficit mode," Black said.

Dr. Dylan Murray is a first-year psychiatry resident from Bettendorf and completed all his education in-state. He said he likely will practice in Iowa despite his school debt creeping past $200,000, because he thinks lawmakers in the state care about the mental health system.

"The money, at the end of the day, isn't enough to keep you in one place," Murray said.

He has looked at residency programs in Wisconsin and Illinois, but said he was disenchanted by their legislative priorities.

"I want to ideally work in a place where mental health care is on the minds of legislators," he said.

Dr. Betsy McGee, a fourth-year chief resident at UI's psychiatry program, said she's not certain if she will stay in Iowa to practice.

"The burden of debt is pretty high and (the income tax break) would be an incentive," said McGee, who's from Illinois. "But these incentives are not just monetary."

She knows she wants to work in a rural area with an underserved mental health population. She said residents need more opportunities to train outside of the urban academic setting that Carver College of Medicine in Iowa City provides.

"That's sort of your comfort zone," she said. "But we're oversaturated with mental health care providers in urban areas."

Gov. Terry Branstad wants to spend $2 million annually to pay off student loans for up to 20 students who commit to working five years in a rural part of Iowa. He wants to spend another $2 million a year to provide matching grants to hospitals to create more medical residencies.

Now it's up to this year's Legislature to approve the plan.

Rep. Matt Windschitl, the Missouri Valley Republican who chairs the subcommittee, said he wants to make sure creating such a credit wouldn't overburden taxpayers and he wants to hold another meeting before passing the measure to the full House Ways and Means Committee.

Iowa ranked 40th for the ratio of doctors to residents and 48th in psychiatry specifically, according to a 2011 report from the Association of American Medical Colleges. Neighboring states Wisconsin, Minnesota and Nebraska all ranked higher.

"Anything the state can do to help right this situation is welcomed including financial incentives, incentives to boost number of residents in our program, or start up new programs," Black said.

Democrat Sen. Joe Bolkcom, chair of the Senate Ways and Means Committee, said he'll take a look at Heaton's income tax credit bill but doesn't believe giving tax breaks will really influence a doctor's decision to stay in the state.

"I think it's down the list for actually being a powerful incentive to keep somebody in Iowa," Bolkcom said. "I think the (governor's) loan repayment makes a lot of sense. ... It's a better investment for us than just forgiving people's taxes."

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