Obama's budget for FY 2011 includes $169 million for the National Health Service Corps to send nearly 400 doctors, nurses and dentists to underserved areas in exchange for paying off part of their student loans.

Among the ideas in health care legislation to fix the primary care shortage is offering loan forgiveness to graduates doing family medicine. The bills would also expand the National Health Service Corps, which places graduates in underserved rural and urban areas in exchance for loan forgiveness. Read more here (subscription).

Obama's budget outline includes $330 million for health care in underserved areas, part of which "expands loan repayment programs for physicians, nurses and dentists who agree to practice" there. Obama's blueprint also includes $73 million targeted for health care in rural areas and more than $4 billion for the Indian Health Service.

Obama announced that Mary Wakefield would head the Health Resources and Services Administration, citing her experience as "a nurse, a Ph.D., and a leading rural health care advocate." Wakefield is director of the Center for Rural Health at the University of North Dakota's school of medicine.

The final stimulus package signed by Obama includes $500 million for "health professions training programs." Of that amount, $300 million goes to "recruitment and field activities" for the National Health Service Corps, which supports medical personnel in areas it identifies as underserved. The stimulus specifies the other $200 million should be used in part for "the scholarship and loan repayment programs authorized" in the Public Health Safety Act.

Daschle withdrew from consideration as Health and Human Services secretary today, saying he did not want his tax problems to distract from the Obama team’s work.

Addressing questions about rural health care from Sens. Richard Burr, R-N.C., and Lisa Murkowsi, R-Alaska, Health and Human Services nominee Tom Daschle invoked his South Dakota background in his confirmation hearings, saying: “I ran for Congress 30 years ago to help places like rural South Dakota where people sometimes went without proper health care because the nearest doctor's office was too far away.” He pledged to help get more doctors and nurses working in rural communities and to modernize rural practices by expanding broadband access and the use of health IT.