An Economic Challenge of Rural Areas

I grew up mostly in rural areas, later in elementary school I lived in a town of 900 people, and then I went to middle school and high school in a town of about 2400 people. In the first town, which was more remote, the economy was definitely more agricultural. In the second, by a quirk of fate there were some manufacturing and professional services businesses in town, as well as a share of farming. In 2016 when I moved from a small city of 50,000 people to a town of 9,000 people, I didn't really expect to learn some of the things I learned. 

One example, in the town I lived in from 2016 through 2018, the hospital had closed, and there was an urgent care instead, along with a few private family medicine clinics. In a nearby town only 20 minutes away there was a hospital. Hospitals are a good thing for a community. They often have good paying jobs, they provide some stability, and when people get sick or injured it's good if they are closer to a hospital than farther away. So how do you keep a hospital open? Essentially two ways, either you have enough paying customers that it operates with a small profit (or a non-profit with a balance at the end of the year), or the second option is that someone funds the hospital even though it loses money. In the second example that could be the federal government, it could be a wealthy donor, it could be community donations. I don't really know how you get that second example to work across the whole USA in thousands of small towns, I don't have an answer for that. It seems like the federal government is the right organization to prioritize keeping hospitals open, but hospitals are a hyper local organization, so from another valid point of view, the solution to keeping each one open should be local.

Another way to phrase it, in Iowa I used to bicycle with an internal medicine doctor, and one day he told he me he sees about 5,000 patients a year. Using that as a metric, we could say that it takes roughly 5,000 patients to fund one doctor. The number is probably somewhat less than that because there are specialists, pediatricians, OBGYNs and others that see a similar number of patients a year, but only see a subset of the population. Even if we reduce that by about 2/3rds to say 1500 patients to justify the salary of one doctor, as you get to the smaller towns of say 900 people, it gets hard hire and maintain a doctor. The doctor will likely be paid less than in a larger city, and will likely have essentially zero opportunity for career growth, whether that is teaching or getting into hospital management or learning a specialty. 

Again, I don't know what the solution is. I like the idea of universal healthcare, and specifically with funding for medical professionals in rural areas that is not directly related to how many patients they see or what type of tests and treatments those patients require. In other words, something that says, yes there is $X minimum amount of funding for doctors and nurses in towns of Y number of people every year, regardless of how sick or how many tests those patients are in a given year. In the current USA medical system there is an incentive for more medical tests, more prescription drugs, but not for keeping people actually healthy or having easy access to a doctor. I think that's wrong, and that's a systemic issue that applies to most of the whole USA medical system.

That's one small example, but it's a great example, because it's something that does affect nearly all small towns. Another example is business and industry. For example manufacturing, that's an easy one to talk about. NPR recently did a series about is manufacturing special, and the short story is that it is special, because it's something where blue collar jobs exist that don't require a college degree, yet manufacturing jobs pay well and typically have some level of career progression available, and overall they aren't especially dangerous. When I was living in the town of 9,000 people I worked in a facility that did manufacturing and had a total employment of about 400 people. I didn't actually directly support the manufacturing that happened there, I actually supported a manufacturing facility in Mexico. It was interesting because there was a pervasive fear that at any given time one mistake by any of the engineers would lead to the whole facility being shut down. I always thought that was ridiculous, but that fear is grounded in some very valid lived experiences. On the street where the factory was, there were the remnants of other businesses, especially one large warehouse that had shut down and laid off quite a large number of staff. That business closing, along with the local hospital closing, were both regularly talked about around town. Definitely not an every day sort of conversation, but every few months it would be brought up.

The real fear there, was that people would have to move if the business shut down. The people employed at the factory, maybe 200 of the 400 would stay, but the others would likely have a very very difficult time finding local work, and decide to move farther away. That's a big fear. It's something that is based on reality that happened in other towns. In a big city, like Denver, one company closing, even a big one, doesn't have much effect to the million plus people living there. There is an inherent stability to a large population economically, it's a diversified economy that not every small town has the luxury of.

I don't have all the answers, ha, I don't even have many of the questions to ask. I read probably a decade ago that many rural American communities are headed toward the minimum number of people to support the agriculture in those areas. I think that's probably true. And frankly, it probably doesn't include hospitals or much industry like manufacturing. Now every town is different, there will always be entrepreneurs who want to build businesses in their hometowns. There will be local and regional companies, maybe not one in every town, but when a few in neighboring towns close, the one remaining will likely have more business.