Economic importance of the health-care sector in a rural economy

Abstract

Introduction: Leaders in rural communities around the world are struggling to provide primary health-care services. Common reasons for this situation include low population density, low incomes in that population, and inadequate medical payment policies. Per capita incomes in many rural Oklahoma communities, like rural areas in most other US States, are lower than the State average due to higher unemployment, higher proportion of income derived from transfer payments (government subsidies) and fewer higher paying employment opportunities.

Objective: The primary objective of this paper is to measure the economic impact that the health sector has on a community's economy.

Methods: A model, which measures the direct and secondary employment and income impacts of the health sector, is presented using Atoka, a rural county located in south-eastern Oklahoma, USA, as case study. The model is applied to the county's five health-sector components (hospitals, doctors, nursing homes, pharmacies and others). Employment and payroll data are obtained for these sectors and the model measures the employment and payroll generated throughout the community as the health businesses and employees spend dollars in the community.

Results: The total employment impact of the health sector in Atoka County represents approximately 18.5% of the total non-farm employment. Secondary impacts of health-sector activity include the creation of jobs in other industries due to business and household spending.

Conclusion: This study demonstrates the economic importance of the rural-health sector by quantifying its impacts on employment and payroll. The relationships among the existence of quality health care, industry attraction and quality of life for senior members of the rural community are suggested. By using a tool such as the IMPLAN model presented, rural community leaders are offered assistance to make important decisions about the provision of health-care services, particularly when the possible closure of the local hospital becomes an issue.