health care small

Health care practitioners have long been in short supply in rural Oregon, a problem that limits care to a significant part of the state’s population and, by doing so, hampers rural economic growth.

To address the problem, the Legislature in 1989 created the rural provider tax credit. The credit has been updated numerous times since then. However, its value as in incentive has been overwhelmed by the rising cost of medical and dental education, which often leaves medical professionals hundreds of thousands of dollars in debt.

It’s time for another adjustment.

House Bill 2552 would double the income tax credit for rural health care providers. It also would remove income-based eligibility criteria, thereby encouraging specialty care providers to serve rural areas.

As OBI’s Scott Bruun explained to the House Committee on Behavioral Health and Health Care Feb. 7, the debt load carried by young doctors, dentists, nurses and other providers makes it much more difficult for them to practice in rural parts of the state. The population density in those areas is often insufficient to generate the patient volume and cash flow necessary to address those debt burdens. Even when a younger practitioner wants to stay in a rural area, the patient density and financial opportunities of the Portland area and Willamette Valley can often be too valuable to turn down.

Meanwhile, the rapid retirement of baby-boom providers has strained patient access in rural areas. Updating Oregon’s rural provider tax credit would help to ease this strain.

It’s worth noting that health care providers are often small business owners, too. Dental offices in Burns and La Pine, medical clinics in Ontario and Ashland are businesses, usually small businesses, not unlike the local tire store, coffee shop or equipment rental company. All small businesses in Oregon must contend with unique challenges, including rising taxes over recent years and an increasingly complex regulatory environment. But health care provider small businesses operating in rural parts of the state are also dealing with extraordinary cost and demographic challenges. All of these challenges work against patient access.

Unfortunately, tax credit levels in statute have not been adjusted in years. While rural practitioners use and appreciate the credit as it now stands, it’s likely too modest to entice the start of a new rural practice or compel an existing one to stay.

The adjustments contained in HB 2552 would better match Oregon’s incentives with current conditions and preserve health care access. By doing so, they would help create the conditions nonmedical employers need to grow and invest in rural Oregon, providing additional jobs, prosperity and tax revenue. For these reasons, increasing Oregon’s rural medical provider tax credit is a key component of OBI’s Growth and Innovation Raodmap.

Read Scott Bruun’s full testimony here.