Cuts to training could lead to doctor shortage in rural Minn.

Proposed cuts to state funding for medical training could lead to a long-term shortage of primary care physicians in rural Minnesota, educators and hospital officials said this week.

The legislature has proposed cutting nearly 90 percent of the funding for Medical Education Research Costs (MERC). The MERC fund, created in 1996, provides about $60 million a year to hospitals and clinics throughout the state to help cover the costs of training medical students. Educators say the funds have helped the state cope with an aging population and a shortage of primary care providers, by attracting medical students to clinics in rural Minnesota.

Without the funding, smaller clinics might decide they cannot afford to provide medical training and the University of Minnesota Medical School might decide it cannot afford to send as many students to rural areas, said Mary Koppel, an assistant vice president in the University of Minnesota's Academic Health Center.

"This is going to be a significant problem for thousands of students that are in the pipeline today," Koppel said.

The state provides MERC grants to about 600 sites throughout Minnesota. It also provides $5,350,000 in direct MERC grants for medical education at the University of Minnesota Medical Center - Fairview, the University of Minnesota School of Dentistry, and the Academic Health Center. The Legislature's Health and Human Services budget would cut the direct payments by 42 percent and cap the amounts that individual sites could receive.

Gov. Mark Dayton included smaller cuts to MERC in the budget proposal he released in February. The governor's plan would eliminate the direct grants and would take $9.8 million of funding currently in the MERC program and transfer it to the general fund.

Both the governor and Republican lawmakers have said cuts are needed to fix the state's $5 billion projected budget deficit, although they disagree on taxes and the level of cuts. The Legislature sent the final set of budget bills to Dayton on Thursday, but the governor has said he will not sign the bills into law because he has not reached an overall deal with Republicans on spending and taxation.

Department of Health Commissioner Lucinda Jesson said the level of cuts proposed by the Republican-controlled Legislature is unacceptable.

"I think the reduced funding for MERC is particularly a problem when it comes to what we really need to be doing more of, which is training more primary care physicians who want to go practice in Greater Minnesota," Jesson said. "Cutting off those dollars puts us at a real disadvantage."

But the University of Minnesota's Koppel said she's worried that the cuts to MERC will be difficult to fight in the context of the broader budget debate.

"If those dollars go away, the impact will not be felt for six years, but it will be felt," Koppel said. "Small towns will have an extremely difficult time attracting a physician to town if our students have never practiced there."

The MERC program also helps fund dental clinics in Willmar and Hibbing and provides about $500,000 for the Community-University Health Care Center in south Minneapolis. The center provides care to low-income children and adults, including many immigrants.

The Minnesota Hospital Association (MHA) said hospitals would lose $74.5 million in MERC funds in the next two fiscal years under the Legislature's proposal. The lobbying group's figures include the loss of federal matching dollars.

Lawrence Massa, president of the MHA, sent a letter to lawmakers Wednesday saying that the cuts would likely cause hospitals and clinics to eliminate or scale back their training programs.

"Minnesota's primary care workforce will wither while the need for these services skyrockets as more and more seniors need care," Massa wrote.

The largest hospitals stand to lose the most money from the MERC cuts, although smaller clinics could feel the impact of the cuts more due to lower overall operating budgets.

The MHA released spreadsheets this week calculating how much the MERC losses and other cuts would affect hospitals. It found that Hennepin County Medical Center would lose the most from the MERC cuts — about $14.4 million over the next two years. Other hospitals facing significant losses from MERC cuts include Regions Hospital, at $7.2 million, St. Mary's Hospital in Rochester, at $4.2 million, and St. Cloud Hospital, at $2.9 million.

Koppel, of the University of Minnesota's Academic Health Center, said that other cuts to the Health and Human Services budget make the MERC cuts worse. The Minnesota Hospital Association has said the budget will result in the loss of $931 million for hospitals in the next two fiscal years.