Rural Communities Miss Health Care Boom

By Cynthia Moothart

Opponents of health reform argue that we should allow the free market to do its thing, that somehow corporations which have put decades of profits over people will turn things around. As a native Iowan working on behalf of rural communities, this blinkered thinking sadly suggests Harold Hill arriving back in River City with the promise of new trombones.

For sure, theirs is a complicated song and dance, but it’s a storyline that lacks the credible and necessary change of heart to ensure a happy ending: Last year alone health-care corporations and their proxies spent nearly a half-billion to sink reform. And their actions don’t just threaten the lives of millions of Americans; in rural places whole communities are put at stake.

The inseparable link between health care and economic viability was revealed in a study by the National Center for Rural Health Works. It found that one primary-care physician working in a rural area generates $1.2 million in annual revenue and creates 23 jobs; a single hospital accounts for as much as 20% of the local economy. A loss of providers, by contrast, results in devastating hardship: Even the departure of one-half of one full-time doctor translates into more than a half-million drop in community income and 14 jobs.

“Health care is the No. 1 provider of jobs — good jobs — in rural areas,” said Val Schott, director of the Oklahoma Office of Rural Health at Oklahoma State University. “On the reverse side, as we see health care fail we see whole communities dry up and virtually disappear. Health care is critically important to payroll and jobs but also to any kind of economic development, because no one is going to move where there is not good care.”

According to Claudia Tanoos, vice president of the Terre Haute (Ind.) Economic Development Corp., access to quality health care ranks among the top considerations of companies looking to launch or locate in a community — just as its absence has a crippling effect on local economies.

She knows something about this as part of the Rural Health Innovation Collaboration, launched last year to increase providers and economic-development opportunities in small Indiana communities. The group formed after the town of Clinton lost one physician to retirement and another to relocation, leaving only one doctor to care for its 5,000 residents.

“It’s not just that there is health care but the right health care to ensure workers are able to come to work each day,” she said. “Rural areas do have difficulty attracting industries and companies where health care isn’t accessible.”

Charting Decades of Decline

Twenty-five percent of the US population is scattered across 90% of our nation’s rural landscape, yet fewer than 1 in 10 physicians call such places home. Today, of the 65 million Americans living in areas with too few primary-care providers, 50 million are rural residents.

Over the last 25 years, 470 rural hospitals have closed for lack of funds and another 2,157 areas now suffer from acute physician shortages. The situation continues to worsen: Places like rural Minnesota are expected to see the number of unfilled jobs explode. In the next decade, for instance, outlying areas in the state are predicted to face a shortage of 8,000 registered nurses.

“Remote rural areas have serious access issues, especially when it comes to specialized care,” said Carol Jones, a senior economist with the Economic Research Service of the USDA. “This problem has been recognized for some time, and a number of different strategies were pursued to address it. The challenge is to sort out which policies can and are making a difference and which are not.”

What hasn’t worked is a health-care system dominated by the free market. As noted by David Himmelstein, a physician and leading researcher at Harvard University, “medical resources follow income.” And with their greater poverty rates, older residents and diffuse populations, rural areas simply aren’t profitable enough to maintain comprehensive health-care infrastructure.

Equally alarming is that a majority of providers are nearing retirement age without a crop of young physicians, nurses and mental-health specialists to take their place. The Iowa Department of Public Health was stung by this reality while planning its health-provider flu vaccination program. Large numbers of medical personnel throughout the state exceeded the cutoff age of 49 to receive the live-virus H1N1 vaccine. In Van Buren — a county of just under 10,000 situated in the southeast corner of the state — not a single provider met the age requirement.

The loss of rural health facilities also jacks up the cost of care. Millions are spent each year transporting urgent-care patients across miles of countryside, resulting in many surpassing the 30-minute threshold in which the nature and necessity of care explodes in price. Rural patients also are being seen for routine issues at regional health facilities, where costs are substantially higher than in small communities. As Schott notes, the average cost per day for care in big-city hospitals is about $7,000; the price is down around $1,100 in rural areas.

Economic factors at work

Compounding the problem is the changing nature of work in rural areas, where unemployment and under-employment are chronic issues. An analysis this fall by the nonprofit JOBS Now Coalition illustrates the point. In Minnesota’s Iron Range, 17,600 unemployed workers were competing for 1,500 unfilled jobs, more than half of which were part time and nearly all were offering wages well below the cost of living. Of rural residents with jobs, roughly a third work for small businesses but less than half receive employer-based insurance because of prohibitive costs.

The result is that rural Americans pay nearly half of their own health-care expenses, greatly exposing them to the exploding price of care. The situation is particularly grim for farmers, in which 1 in 5 has substantial medical debt.

“If we don’t bring down the cost of health care the rest is just window dressing,” said John Roberts, executive director of the Nebraska Rural Health Association. “And we’ll be left with a health-care system none of us recognizes.”

Already it is unrecognizable for millions of rural residents who can’t afford basic care before health problems become life-threatening. In North Dakota, for instance, the US Department of Health & Human Services reports that 42% of residents have not had a colorectal cancer screening in the past two years, a number relatively consistent with other Midwest states.

Chris Petersen, owner of a small sustainable hog farm in north-central Iowa, is such a patient. Dropped by his private health insurer following minor hernia surgery, he and his wife now pay $1,300 a month for coverage through the state health program, available only to residents deemed uninsurable by private companies. But with a $2,500 annual deductible, Petersen can afford just one of the four annual diabetes and high-blood-pressure checks recommended by his doctor.

“This is not health care; this is sick care, and not even comprehensive sick care,” he said. “We’re taking a bad situation and potentially making it worse, which costs the system even more.”

Amber waves of change

Pressure on the rural health system will increase exponentially over the next decade, as baby-boomer migration is expected to increase the rural population aged 55 to 75 by 30%. Unlike relocation patterns of the 1990s, in which a majority moved into rural counties adjacent to metropolitan centers, this next wave of transplants is expected in more remote areas — the same places, in other words, where the availability of care already fails to meet existing need.

“If [baby boomers] continue the marked preference for nonmetro destinations exhibited during their earlier life stages, nonmetro net migration of baby boomers could reach as high as 1.5 million in this decade and 1.6 million in the next,” writes John Cromartie in “Baby Boom Migration Tilts Toward Rural America,” a report of the USDA Economic Research Service.

The article goes on to state that such population increases will drive up “infrastructure costs for local governments and require health care and other services not currently available,” fearsome realities for regions already shedding jobs and suffering from acute shortages of care.

As much as Harold Hill’s conversion from con man to community man was screenwriter fantasy when The Music Man debuted in 1957, so, too, is the insistence in today’s political theater that health-insurance corporations are interested in anything beyond their bottom line. The only real difference is The Music Man, set in my home state, was a triumph of small-town values over financial interests. If reform opponents have their way, millions of rural residents will simply remain the victims of corporate greed.

Cynthia Moothart is policy director with League of Rural Voters (, based in Minneapolis, Minn. Email

From The Progressive Populist, March 1, 2010

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