Editor’s Note: For an alternative viewpoint, please see: Counterpoint: Repealing Obamacare Will Create, Not Destroy Jobs
In 2014, Adam O’Neal, mayor of tiny Belhaven, North Carolina, made headlines when he walked 273 miles from his town to Washington, D.C. The mayor put on his walking shoes because of the impending closure of the town’s only hospital. O’Neal wanted not only to save his own town’s hospital but to call attention to the risk for hospitals all over rural America. A self-proclaimed conservative Republican, O’Neal wanted North Carolina to expand Medicaid as a way to secure the hospital’s finances.
Rural economies have faced tough times since the Great Recession. Long after employment rebounded in urban areas, unemployment in rural America remained stubbornly high. Although rural areas stopped bleeding jobs by 2015, even now rural employment remains well below its pre-recession levels.
As jobs have disappeared, health services — hospitals, clinics and healthcare providers — have become vital economic anchors in rural America. Healthcare jobs account for a greater share of the jobs in rural counties than in urban counties, a recent study of Tennessee found.
And Tennessee is not the only one. In rural areas, local health centers and hospitals are likely to be one of the top two employers. Jobs in healthcare tend to pay well, offer stable employment and provide benefits. Simply having healthcare providers in a community is an economic plus. The National Center for Rural Health Works estimates that the addition of a single physician in a rural hospital generates 26.3 jobs.
The Affordable Care Act has strengthened job markets in rural America. Medicaid expansion under the ACA has put rural hospitals on a stronger financial footing. In a study of the Ascension Health System, a large nonprofit provider, the Kaiser Family Foundation found that hospitals in states that expanded Medicaid experienced financial improvement compared to hospitals in states that did not expand Medicaid.
In fact, three-quarters of the rural hospitals that have closed since 2010 are in states that chose not to expand Medicaid coverage. The community health centers that provide healthcare in underserved areas have benefited from more funding under the ACA. The law directly increased the rural healthcare workforce with increased funding for the National Health Service Corps, which provides loan repayment and grants for healthcare providers who work in underserved areas, especially rural communities.
Today 700 rural hospitals are in danger of closing. The numbers will certainly increase if the ACA is repealed. The National Institutes of Health estimates that a hospital closure reduces per-capita income by an average of $703 and increases the local unemployment rate by 1.6 percent. Rural hospital closures are especially devastating. The loss of healthcare jobs echoes throughout the economy as physicians leave and jobs supported by the health sector vanish.
Hospital closure can tilt a rural county into a downward economic spiral as future economic development prospects take a hit. Rural counties without a hospital find it difficult to attract new employers who are reluctant to locate in areas without an emergency department. Retirees looking for a rural lifestyle avoid counties with inadequate healthcare.
Late last year, after efforts to save it failed, demolition began on Belhaven’s only hospital. Its closure not only harmed local access to healthcare, it also put the North Carolina town’s economic future in jeopardy. Repeal of the Affordable Care Act threatens rural communities across America with a similar fate.
