Bridging the Divide of Health and Economic Disparities between Rural and Urban America Thank you so much Provost Thorp, Dean McKay, Ross…. This is such a great honor. And I must say this University, and these leaders, my colleagues, have been so good to me… Timothy McBride, PhD Professor, Brown School, Washington University in St. Louis Co-Director, Center for Health Economics and Policy

Challenges Facing Rural Health in MO and the US Outline Challenges Facing Rural Health in MO and the US Why so many challenges facing rural health? State, federal responses to rural health challenges Bridging the Divide

Concerns Concerns about equity and access to care in rural Missouri, rural America Rural hospital closures Challenges accessing affordable care Provider shortages Rising concerns about impacts on health, well being in rural areas Rising mortality and morbidity among some groups Infant and maternal mortality Substance use disorders Question: why is this happening? What are the underlying causes? And as the title of my talk says, I want to talk today about bridging the divide between urban and rural America We have had much discussion in recent years about the great divide in our country And the horrific problems we have around equity and disparities in urban America, which have been with us forever … and remain. And of course they were brought to the forefront of the world here in STL as the unrest in Ferguson broke out. But really all that did for those of us who have lived here for decades is put a spotlight on problems we have known about Segregation Shocking income inequality Brutal and unconscionable social inequities of health A quote I will never forget from the days after Michael Brown’s death, was a quote from my friend and our colleague Jack Kirkland who was quoted as saying “I liken it to a flow of hot magma just below the surface… it’s just a matter of time when it’s going to blow.”

Rural Health Challenges

Financial distress Rural Hospital Closures Affordability and Costs Rising costs of insurance Public sector costs Out of pocket costs Access Provider shortages Public health challenges Substance use disorders Infant and maternal mortality Chronic disease, aging

Rural Hospital Closures (since 2010) (113 rural hospital closures) Source: UNC, Sheps Center.

Missouri Rural Hospital Closures (since 2010) Six Hospital Closures I-70 Community Hospital, Sweet Springs (15 beds) Southeast Health Center of Ripley County, Doniphan (21 beds) Twin Rivers Regional Medical Center, Kennett, MO (100 beds) SoutheastHEALTH Center of Reynolds County, Ellington MO (21 beds) Parkland Health Center, Farmington MO (98 beds) Sac-Osage Hospital, Osceola MO (47 beds) Source: UNC, Sheps Center.

Source: UNC, Sheps Center.

Source: UNC, Sheps Center.

Financial distress and rural hospital closures Causes of financial distress and closure are multi-faceted and complex Long-term unprofitability is a major cause Many factors go into contributing to long-term unprofitability Low volumes Market structure Population served (older, sicker, lower incomes) Service mix Workforce issues Technology challenges Policy challenges: lack of Medicaid expansion, low payment, Medicare payment changes The South has the greatest number of rural hospitals at high risk of financial distress

Why are rural health systems stressed?

Losing Jobs in Rural America Both rural and urban areas lost a LOT of employment during the recent recession… graph shows employment Index starting at 100 in 2008 by the depths of the recession both rural/urban areas had lost about 5-6 percentage points .. The worst recession since the great depression... But note… since then … urban America has recovered… is back above 100% … Urban 4% higher than 2008 But rural America has NOT. The jobs have not come back. Still 3% lower than 2008 Source USDA, Economic Research Service

Losing Population in Rural America Both rural and urban areas lost a LOT of employment during the recent recession… graph shows employment Index starting at 100 in 2008 by the depths of the recession both rural/urban areas had lost about 5-6 percentage points .. The worst recession since the great depression... But note… since then … urban America has recovered… is back above 100% … Urban 4% higher than 2008 But rural America has NOT. The jobs have not come back. Still 3% lower than 2008 Source USDA, Economic Research Service

Though poverty rates fell significantly until the early 1970s, nonmetro poverty rates have always been higher than metro poverty rates.

Some rural areas in the U. S Some rural areas in the U.S. have significantly higher poverty rates; mostly in the rural South and Southwest, Appalachia.

Aged population will double from 2000 to 2030! Median age: Rural 43, Urban 36 % of population age 65+: Rural 17.2%, Urban 12.8% Aged population will double from 2000 to 2030! Implications for Medicare&Medicaid Map shows two reasons for this: migration to retirement/recreation counties, but also loss of population elsewhere.

A lower proportion (28%<41%) have college education in rural America. Implication for opportunities for skilled labor positions.

Diversity in Rural America Although it is true that rural America is less diverse than urban America overall (rural: 78% white, non-Hispanic; US: 64% white, non-Hispanic)… Many areas of rural America are majority-minority I often hear people who believe that rural areas are not diverse in terms of ethnicity While it is true that overall in the US rural areas are less diverse than urban areas Rural is 78% white non-Hispanic Urban is 64% white non-Hispanic Many rural and small towns or census tracts are majority-minority as shown in this picture In general these are found in the South (African-American), Southwest/West (Latino) and in some places in the Plains (Native Americans)

Health Insurance Marketplaces As the marketplaces developed: premiums offered in rural areas (dashed lines) exceeded premiums offered in urban areas. Growth rate higher in rural than in urban. Premiums lower in Medicaid expansion states. How has our work spoken to this over the years? In the short time I have here I will cite only a few example studies. One is a recent one that is an example of a body of work focused on whether insurance markets are functioning in rural areas. In particular the Health Insurance Marketplaces under Obamacare. We followed these closely over four years, following every county in the U.S. and every insurer, and studied the variation in these plans. And the competition – or lack thereof between these plans. There has been big concerns about higher premiums in some areas, and insurers that have dropped out, and some places where there is only one insurer or a couple insurers competing. In work led by my colleague Abby Barker, we have found is that is largely if not completely a rural phenomenon—maybe mostly in about 1/3 of the counties in the US especially. And as this slide shows the premiums are higher in rural counties (the dashed lines) and rising faster there… and in states that have not expanded Medicaid. Health Insurance Marketplaces: Issuer Participation and Premium Trends in Rural Places, 2018 Abigail R. Barker, PhD; Lindsey Nienstedt, BA; Leah M. Kemper, MPH; Timothy D. McBride, PhD; Keith J. Mueller, PhD August 2018

Change in Uninsured due to ACA? Uninsured as percent of population Change 2013 2017 Urban 13.5% 8.8% -4.7% Rural 12.9% 9.2% -3.7% Total 13.4% -4.6% In a third study I will show you, and one we will be updating… What role has Obamacare had on rural areas overall? Note before the ACA passed in 2013 the uninsured rate was actually lower in rural areas 12.9%, compared to 13.5% But in 2017, this reversed, and the uninsured rate in higher in rural areas (9.2%) as compared to urban areas (8.8%) Why is this? A higher proportion of rural people live in states that did not implement the Medicaid expansion Marketplace plans have been less available, and more expensive in rural areas, so less liken to be taken up Also … less outreach and more skepticism about the ACA? So ironically the ACA could help rural people more but it is being used less. Uninsured rate LOWER in rural areas before ACA implemented; Uninsured rate now higher. Why? Higher proportion of rural people live in states that did not implement Medicaid expansion As shown, marketplace plans less available and more expansive in rural areas Also … less outreach and more skepticism about ACA?

Medicare Advantage Enrollment Growth Continued steady growth in Medicare Advantage enrollment in rural and urban areas. But rural enrollment has always lagged behind urban by about 10 percentage points. Implications for rural provider payment. Or, even though they aren’t allowed to charge higher premiums for sicker populations, they can, in subsequent years, charge more in places where their own costs turn out to be higher – for whatver reason.

Medicaid Enrollment Growth Or, even though they aren’t allowed to charge higher premiums for sicker populations, they can, in subsequent years, charge more in places where their own costs turn out to be higher – for whatver reason. Medicaid and CHIP enrollment growth 38% growth in Medicaid Expansion States 12% growth in non-expansion states 29% growth overall in all states Source: CMS, January 2018.

More than 63% of rural hospital inpatient days paid by Medicare and Medicaid; 49% for urban hospitals. SOURCE: Healthcare Management Partners, LLC, June 2017.

“Deaths of Despair” Deaths of despair from alcohol, substance abuse, guns, suicide.. Also obesity. Leading to first declines we have seen in mortality in years, decades. Much of it in the south, East South Central region, and rural areas in specific. Cumulative disadvantage: low education, poverty. What is the outcome of all this? It is a soapbox I am constantly on to tell my colleagues to focus on the health and system outcomes of all this. We have seen in my opinion one of the largest exogenous changes in the environment since the passage of Medicare, since the implementation of DRGs What is the impact on health, people, providers, systems? As I mentioned there is increasing focus on rural hospital closures, health of rural health systems But in terms of rural health I will cite this area of focus: The Deaths of Despair topic brought up by economists Ann Case and Angus Deaton They pointed us to data showing an alarming rise in mortality among middle aged whites There was some controversy about this, not I think because the finding is wrong, but because of a few things… Mortality rates for whites, though rising are still lower than people of color Mortality rates for women are rising as well And other nuances in the data, including that it is hard to pinpoint the exact causes Nevertheless they pointed to some potential causes: cumulative disadvantage, poverty; suicides, guns, substance abuse. And for the purposes here I want to point to note that they found the rising mortality in rural areas.

Key takeaways Causes of financial distress and closure are complex and the number of hospitals at risk of financial distress is growing Rural America has endured major shocks in the last few decades to its economy Like the rest of America, rural America is aging, but a faster rate Educational attainment levels are lower Payer mix Uninsured rates lower since 2013, but drop smaller in rural Medicaid coverage growing, Medicare Advantage growing (and Medicare) Lack of Medicaid expansion adding to financial stress in some states Marketplace enrollment lower in rural Overall: rural has higher proportion of funding covered by public funding

State and Federal Policy Missouri: Gov. Parson has identified rural health as one of his major focus areas Transformation of the Missouri Medicaid program Federal policy: Rural health not a major focus of recent policy initiatives Price transparency, prices of prescription drugs, “Surprise billing” Presidential campaign? Clashes over ACA, Medicare for all Rural health and rural America A concern: Will the critical needs of rural areas be pitted against the needs of urban areas? Will this be seen as a “zero sum game” To help rural America, we need to take from urban America?

Bridging the Divide

Disparities and Equity Concerns about equity and access to care in rural Missouri, rural America Rural hospital closures Challenges accessing affordable care Provider shortages Rising concerns about impacts on health, well being in rural areas Rising mortality and morbidity among some groups Infant and maternal mortality Substance use disorders Question: why is this happening? What are the underlying causes? And as the title of my talk says, I want to talk today about bridging the divide between urban and rural America We have had much discussion in recent years about the great divide in our country And the horrific problems we have around equity and disparities in urban America, which have been with us forever … and remain. And of course they were brought to the forefront of the world here in STL as the unrest in Ferguson broke out. But really all that did for those of us who have lived here for decades is put a spotlight on problems we have known about Segregation Shocking income inequality Brutal and unconscionable social inequities of health A quote I will never forget from the days after Michael Brown’s death, was a quote from my friend and our colleague Jack Kirkland who was quoted as saying “I liken it to a flow of hot magma just below the surface… it’s just a matter of time when it’s going to blow.”

Bridging the Divide Parallel concerns in urban Missouri, urban America Challenges accessing affordable care Provider shortages Transportation issues Social determinants of health Concerns about health in urban America Mortality and morbidity higher among some groups Infant and maternal mortality Substance use disorders And as the title of my talk says, I want to talk today about bridging the divide between urban and rural America We have had much discussion in recent years about the great divide in our country And the horrific problems we have around equity and disparities in urban America, which have been with us forever … and remain. And of course they were brought to the forefront of the world here in STL as the unrest in Ferguson broke out. But really all that did for those of us who have lived here for decades is put a spotlight on problems we have known about Segregation Shocking income inequality Brutal and unconscionable social inequities of health A quote I will never forget from the days after Michael Brown’s death, was a quote from my friend and our colleague Jack Kirkland who was quoted as saying “I liken it to a flow of hot magma just below the surface… it’s just a matter of time when it’s going to blow.”

What about Rural America? …What is Rural America? So how do we connect this with rural America? What in fact IS rural America? I have done a lot of my work about rural America over the last three decades and I think rural America is not well understood. There are many stereotypes about rural America… Sometimes it conjures up images like we saw from the Great Depression days in this picture on the left .. And before the Industrial Revolution most of the population lived in rural areas, and many people were very poor. When I was growing there was a ridiculous show called the “Beverly Hillbillies” about a rural family that struck it rich finding oil on their land, and then moved to Beverly Hills. Like anything else coming out of Hollywood, they not typical of rural America Or is it the iconic picture of beautiful farms and rolling prairies and cows? Are there more cows than people?

What is the character of an area? County 1 County 2 County 3 Median family income $79,904 $46,878 $40,346 Percent below poverty 10.3% 24.3% 29.1% Unemployment rate 6.7% 10.6% 11.1% In Labor Force 66.0% 64.6% 54.1% Highest education: high school (or less) 40.2% 40.6% 79.0% Percent foreign born 6.9% 6.3% 0.7% Percent non-white 30.8% 54.4% 28.3% Let’s start with a quiz …. You didn’t think I was going to give you a quiz, did you? Three areas .. Three counties in America … and which one of these is rural? Which ones are urban? You can see some striking differences… one county has High income, low poverty, low unemployment… others don’t But it’s not so easy to characterize… is it?

What is the character of an area? St. Louis County St. Louis City Pemiscot Median family income $79,904 $46,878 $40,346 Percent below poverty 10.3% 24.3% 29.1% Unemployment rate 6.7% 10.6% 11.1% In Labor Force 66.0% 64.6% 54.1% Highest education: high school (or less) 40.2% 40.6% 79.0% Percent foreign born 6.9% 6.3% 0.7% Percent non-white 30.8% 54.4% 28.3% Population 1,000,560 316,030 17,599 County Urban Rural Turns out… The one on the left is St. Louis County .. Urban Middle… STL City… urban Right … Pemiscot county… rural

Bridging the Divide Some of the challenges we face in rural America mirror those faced in urban America At least parts of urban America – central cities – but usually not the “suburbs” We need to recognize this and design policies that address these challenges, regardless of place But recognize where the challenges are uniquely “rural”, or uniquely “urban” And as the title of my talk says, I want to talk today about bridging the divide between urban and rural America We have had much discussion in recent years about the great divide in our country And the horrific problems we have around equity and disparities in urban America, which have been with us forever … and remain. And of course they were brought to the forefront of the world here in STL as the unrest in Ferguson broke out. But really all that did for those of us who have lived here for decades is put a spotlight on problems we have known about Segregation Shocking income inequality Brutal and unconscionable social inequities of health A quote I will never forget from the days after Michael Brown’s death, was a quote from my friend and our colleague Jack Kirkland who was quoted as saying “I liken it to a flow of hot magma just below the surface… it’s just a matter of time when it’s going to blow.”

Rural America What characterizes Rural America today? Slow economic growth Depopulation Lack of access to health care; few health providers; rural hospital closures Poor health Despair, morbidity, higher mortality How different is this from Urban America, central cities? Let’s drill down some more on what really are some of the critical problems in rural America You can see the list on this slide Slow economic growth (and declining access to good jobs); income inequality Depopulation Lack of access to health care; workforce concerns – few or declining providers Rural hospital closures Poor health – obesity Despair; rising morbidity… increasing mortality Look at this list … doesn’t this characterize many of the urban areas in the US? St. Louis?

Triangulation… Rural, Suburban, and Urban America One of the points of all this is that perhaps many urban areas have more in common with rural areas in terms of the conditions facing them than urban areas have with suburban areas. This is point my brother Dennis made to me many decades ago and it has stuck with me since then. We live in a divisive time when some like to divide people.. But what if we tried to bring people together based on their common needs and hopes? And not on their fears? That may seem like a radical idea… but think about it .. We have done this before … we thought about policy like this in the Great Depression.. In the 1960s…

Moving forward If we concentrate on what connects us, and not what divides us… there is so much we can achieve.

Contact Information Timothy McBride tmcbride@wustl.edu