Economic Development

Rural Health Today

Economic Development

In rural communities, health care and the overall vitality of the community is intrinsically linked. A robust community supports and sustains quality health services for its residents by attracting highly trained and committed health care professionals. Communities with strong economies may be more likely to financially support their health care system through higher rates of health insurance coverage, philanthropic giving, and by investing in infrastructure that can be leveraged by the healthcare system. In return, a high-quality healthcare system can support economic and community development initiatives.

Providing quality health care services in a rural community does more than provide the needed health care. It also has a positive impact on the economic health of a community. According to American Medical Association’s Physicians Boost the Economy┬ástudy, a physician in a community means real revenue and real jobs. In fact, a 2016 report from the National Center for Rural Health Works (NCRHW) estimates that a rural primary care physician can generate more than $1.4 million in wages, salaries and benefits and 26.3 jobs in a local community with a hospital.

When economic growth occurs, the capacity of the local health care system may need to increase to support services for new families and businesses. This, in turn, would generate additional economic growth in the health care sector. If the health care system cannot keep pace with the health needs of the growing community, the lack of adequate capacity could affect access and quality for everyone, including both long-time community members and new residents. Families and businesses may seek health care outside the local area or not at all, decreasing the economic impact of these new businesses and families.

It is important that economic development officials and businesses in a community share information with their local health care system related to expected major economic growth. This will allow the health care facilities to plan for growth they may see in demand for services, as well as factors that may affect their expenses, like increased competition for workers. When health care facilities are not prepared for major economic growth in the community, it places significant strains on facilities as they try to catch up to the changing needs of the community.

Rural hospitals are often one of the largest employers in their community. They offer some of the best paying jobs available in rural areas, bringing professionals in to live and invest in the community. Some specific examples of how local health care services can impact the economy include:

  • A 2017 USDA study found that inpatient health care facilities were responsible for 1.25 million jobs, or 8.5%, of wage and salary employment in rural communities at their peak in 2011.
  • According to a 2016 assessment from the NCRHW, for every job in a critical access hospital, another 0.34 jobs are created in other businesses and industries in the local economy. A critical access hospital generates an average of $1.8 million in taxable retail sales in the rural community.