Millions of dollars of state money meant to keep doctors in rural Oregon is has gone to doctors in areas well-served with abundant hospitals, The Oregonian found in a review of records.

The state money is available to physicians at least 10 miles from a city of 30,000 or more. But of more than 1,100 doctors who qualified under the program in its first two years, fewer than 200 worked in communities with serious unmet medical needs as defined by the state.

Both said the idea was to maintain access to doctors in remote towns, particularly those with too few obstetricians that the program was intended to help.

The program covers 80 percent of malpractice costs for obstetrician-gynecologists, 60 percent for others who deliver babies, and 40 percent for all other doctors.

Defenders, including the Oregon Medical Association, say recipients receiving the most support are obstetricians and others most threatened by malpractice premium hikes.

In addition to three plastic surgeons, the program has helped anesthesiologists in Ashland, dermatologists in Grants Pass, eye doctors in McMinnville and orthopedists in Newberg.

Of more than 1,100 recipients, only 71 primary-care doctors and 54 OB-GYN doctors offered obstetric care. Ten OB-GYN doctors receiving support no longer attended births.

In 2003 there was a surplus, and industry groups backed the subsidy in exchange for a cut in assessments that year. By the end of 2007, it is projected to have spent $25 million of the $40 million authorized for four years.

Audits by Saif Corp. check whether applicants are licensed, fit the rural definition and have legal levels of malpractice insurance. Saif needn't consider income or whether a specialty is locally scarce.

Ashland has quadruple the minimum number of primary-area physicians, according to the Office of Rural Health. Fifteen minutes up I-5 from Ashland, Medford has two modern hospitals. By the end of 2005, 60 Ashland physicians had received a total of more than $700,000 through the program.

Young told the Associated Press via fax that he used the subsidy to care for rural patients and that it helped him cover costs of practicing that were not otherwise covered by his practice. He said his practice is primarily focused on trauma and skin cancer patients, not on cosmetic surgery.

Defenders say the demands of small-town practice are such that newly recruited doctors often don't last long and many who do are nearing retirement.

"If one of those physicians leaves, the scale is tipped and the area becomes underserved," said Scott Ekblad, director of the Office of Rural Health. "Retaining access is as important as recruiting doctors to underserved areas."

Newberg has a new $70.6 million hospital but orthopedic surgeon Julie Isaacson is one of only two orthopedists on staff and cannot respond around the clock to orthopedic emergencies.

Isaacson said Newberg is as deserving as any rural community for the subsidy, even though there are nine orthopedists at a hospital in nearby Tualatin.

Some doctors are astonished that plastic surgeons, dermatologists and eye doctors in Ashland and in communities around Oregon's biggest cities receive the aid.

He is among four doctors caring for pregnant women in Lakeview and from a 50 or 60-mile radius. He received about $21,000 from the subsidy in 2004-05.

Robert Holland, a family practitioner in John Day, 160 miles from Bend, the nearest urban center, said the system "probably needs to be looked at."

Holland quit delivering babies about four years ago when his annual malpractice insurance jumped from $18,000 to more than $30,000. He found a lower price, resumed practice and received more than $22,000 from the subsidy in 2004-05.

Then, the Oregon Medical Association proposed an expansion, and the Legislature expanded eligibility to more than 1,000 doctors and dropped the income test.

Cory Streisinger, director of the state Department of Consumer and Business Services, said the income test "would have been very difficult to administer" but that "legislation is a product of compromise.

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