Posted by Bill Sandweg on 16 May 2022.

Capitalism has done wonders for the world in terms of raising the standard of living for so many people.  Of course, like everything else in this world, capitalism is not an unbridled blessing.  It has its dark side.  When it comes to health care, capitalism has caused a lot of problems.  Among them are the rise of health insurance giants, the growth of hospital chains, big pharma, and the increasing emphasis on medicine as a business whose goal is to make money to name just a few.  Today, I want to discuss how capitalism affects rural hospitals.  Rural hospitals face many problems trying to serve their communities.  Capitalism sometimes makes things worse.

If you had to design a system that would almost force rural hospitals to fail, you would do well to copy our present system.  Start with the absence of health insurance for many people who live in rural areas.  They need health care but cannot afford to get it.  Hospitals that provide care to them are stuck with bills that they can never collect.

The populations that rural hospitals serve are shrinking in most areas.  People are moving to the cities.  Many small towns are dying and taking their hospitals with them.  Most of the hospitals that have closed in the United States in recent years have been in rural areas.

Medical professionals, who spent years in school and have lots of student debt, often don’t want to practice in small towns with limited cultural opportunities.  Even if they enjoy small town life, they may not be able to meet their financial obligations with the limited money they can make in a rural as opposed to an urban area.

Rural hospitals need big ticket surgeries covered by insurance to compensate for care provided to uninsured patients but many insured patients are choosing to have their big surgeries in the nearby city.  This leaves the rural hospital with less profitable services such as outpatient procedures and emergency department visits.   They face increasing competition for even this revenue source from physician-owned surgery centers and freestanding urgent care centers.

Perversely, another problem rural hospitals face is that they often own the valuable land their hospital is built on.  This valuable real estate attracts venture capital, which buys the hospital and sells the real estate to a separate entity.  The new entity then leases the land back to the hospital.  The hospital, which was already having trouble making ends meet, now has a bill for rent that it did not have before.

Capitalism is driving all of these changes.  After making it almost impossible for rural hospitals to succeed, capitalism insists that rural hospitals fully pay their way.  Capitalism insists the law of supply and demand should apply to these hospitals.  If they cannot pay their way, they must not be really necessary and should go out of business.  This is a slap in the face of the people who live in rural areas and need health care.  Sorry, capitalism, our fellow citizens who live in rural areas deserve health care and it should be the obligation of the state to make sure they get it.