The Case for Rural Hospitals

Cora Nucci, February 23, 2011

Does having more hospitals drive up utilization and healthcare costs?

New Hampshire Governor John Lynch thinks so. He recently called for moratorium on hospital construction, though in the Granite state only the legislature can order such a move and make it stick.

"We are overbuilding, and if we want to control healthcare costs, we need a comprehensive review to determine what our state's healthcare facility needs are," Lynch was quoted in the Boston Globe.

That view doesn't jibe with the results of HealthLeaders Media's latest industry survey, where rural healthcare leaders identified the top three cost drivers as (ironically) government laws and mandates, labor costs, and clinical technology. Patient lack of responsibility was fourth. Overutilization of services came in fifth. 

And maybe the Governor didn't see the report issued recently by the Illinois Hospital Association, detailing the economic benefits of hospitals in the Prairie State:

"[Hospitals] employ more than a quarter of a million Illinoisans and pay them $14.8 billion in wages and benefits annually. In nearly half of the state’s counties, hospitals are among the top three employers. These include skilled, family-supporting jobs that are critical to surviving and recovering from the economic downturn. These jobs generate another 225,900 jobs."

And did Lynch look at stats on hospital beds per capita? By national standards, New Hampshire is not overbuilt. Based on 2008 data, the state had 2.2 beds per 1000 population, which is below the U.S. average of 2.7 per 1000 and tied for 11th lowest in nation. New Hampshire, like its New England neighbors, is shaking off the remnants of a brutal economic recession and its population is aging, right in line with the rest of the country.

Rural hospitals in particular, deliver an economic boost to communities as a source of decent-paying jobs. The responsible way forward would be to plan for and build hospitals now. The economy will benefit in the long term. Scramble later to deal with a shortage of beds and not only will the costs go up, access to care will go down, and years of good jobs and incomes  will be lost.

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