Can Funding Fix Rural Physician Shortages? Evidence from a Location Choice Model

Abstract:Physician geographic density affects access to care, especially in rural areas. This paper examines the location choice of early career physicians, the components of which include standard demographics, practice environment proxies such as Graduate Medical Education (GME) programs, and personal ties to the location. Using these demand parameters, I study the impacts of workforce policies by estimating the changes to rural probability when relevant attributes are varied in counterfactual analysis. I find that previous ties are major drivers of practice location: physicians have 49 times higher odds of choosing the location where they did their residency, but the effects are drastically reduced by approximately half in rural areas. Higher local hourly wages have little to no effect. Rural residency training exposure works specifically through fostering previous ties to the location rather than changing the preference for rural practice. The findings underscore the importance of local attributes and provider response in policy investments and the potential of alternative and long-term initiatives, such as building a local health care workforce, besides traditional approaches.

ASHEcon 2025 Session