Indiana is driving away its doctors and nurses

Last week, a colleague worked her fourth consecutive extended shift. The position beside her has been vacant since 2021. Nobody is coming.

That issue represents a structural failure — one playing out in emergency departments, rural clinics, and obstetrics units across Indiana. And without deliberate legislative action it will get worse.

Indiana’s nursing workforce mirrors a troubling national pattern: nearly 40% of registered nurses are 55 or older and approaching retirement, with no equivalent wave behind them to fill those beds. Meanwhile, more than half of Indiana’s 92 counties face primary care shortages. As of December 2025, HRSA had designated 169 primary care Health Professional Shortage Areas across the state, affecting millions of Hoosiers.

In rural counties, the picture is grimmer still. Patients wait longer for appointments. Emergency departments hold admitted patients for hours, sometimes days, because beds and staff are limited. Specialty services that once existed locally have quietly migrated to Indianapolis or Fort Wayne or simply disappeared.

The Indiana Hospital Association’s January 2026 Kaufman Hall analysis puts the financial stakes in concrete terms: Indiana hospitals posted a median operating margin of just 1.9% through August 2025, compared to a national median of 2.6%. Operating income fell 5.5% year over year, nearly $50 million in resources that are no longer available for patient care. Some projections suggest margins could slide to negative 3% without corrective action.

When margins collapse, services close particularly in rural areas. We are seeing this play out in Indiana where Greene County General Hospital eliminated its obstetrics unit. Pregnant patients there now drive farther, sometimes much farther, to deliver their babies.

Incentives problem

Indiana does not lack talented physicians, mid-level providers, or nurses. Our training programs are excellent. The problem is that the incentive structure we have built consistently steers nurses and providers away from the communities that need them most.

The average medical student now graduates carrying roughly $200,000 in educational debt. Many express genuine interest in rural or underserved practice. But when rent is due and loan payments begin, Indianapolis pays more than Boonville. This is a rational, incentive driven response to the system we have designed.

The same math applies to nurses. Indiana’s median registered nurse salary runs roughly $15,000 below the national average and nearly $15,000 below neighboring Illinois. For a new graduate weighing two offers, that gap is not abstract. It is a car payment, a student loan installment, a year’s worth of groceries.

Administrative burden deepens the problem. National studies estimate that physicians now spend nearly as much time on administrative tasks as direct patient care. Prior authorization alone has become a full-time job layered on top of an already full-time job. Clinicians burning out in year five or six are not a mystery. They are a predictable outcome.

What lawmakers can do

There is some genuinely good news. Indiana received a $206.9 million first-year award in December 2025 under the federal Rural Health Transformation Program, the GROW: Cultivating Hoosier Health initiative, aimed at expanding rural access and workforce investment through 2030. That is real money, and it creates a real opportunity. But federal dollars without complementary state policy are a floor, not a ceiling.  None of what follows requires reinventing the wheel. 

Expand loan repayment and make it worth staying. Indiana participates in loan repayment programs through the Indiana State Department of Health, and they help. But they remain modest relative to the debt burdens driving workforce distribution. Tying larger incentives to multi-year commitments in federally designated shortage areas would meaningfully shift those calculations. Recruiting a healthcare provider costs hundreds of thousands of dollars. Retaining one is almost always cheaper.

Make interstate licensure compacts actually work. Indiana has joined both the Interstate Medical Licensure Compact and the Nurse Licensure Compact. Good. But participation is not performance. When the Indiana Professional Licensing Agency is understaffed and credentialing takes months, clinicians accept positions in Ohio or Michigan before Indiana finishes the paperwork. In an era of expanding telehealth and cross-state practice, licensure speed is a competitive advantage. The General Assembly should fully fund and modernize IPLA so that credentials are processed in weeks, not months.

Align Medicaid reimbursement with the actual cost of care. Approximately two million Hoosiers receive coverage through Medicaid. When reimbursement rates fall chronically short of what it costs to deliver evidence-based care, hospitals face a binary choice: restrict services or absorb losses. Rural hospitals, which disproportionately serve Medicaid populations, cannot indefinitely absorb losses. The obstetrics closure in Greene County is one data point. It will not be the last unless reimbursement reflects reality.

Reform prior authorization. Every hour a physician spends navigating insurance bureaucracy is an hour not spent with a patient. Thoughtful prior authorization reform, protecting accountability while eliminating reflexive delays, would return meaningful clinical time to frontline care teams. This is not a radical ask. It is a practical one.

The window is now

Bipartisan recognition of these challenges has begun to emerge at the Statehouse, and that matters. Workforce policy does not lend itself to culture war. It lends itself to problem-solving. Both parties share a common constituent interest: people who can see a provider when they are sick.

Indiana has strong training institutions, capable clinicians, and health systems genuinely committed to their communities. What we lack is a policy architecture that keeps those clinicians here in the communities that trained them and need them. My colleague will probably work another extended shift this week. The vacancy beside her will probably remain unfilled. Indiana has paid that price long enough. The General Assembly has this session to decide whether to keep paying it.