Health - Rural and Underserved Areas

Excerpted From: State Briefing Book on Health Care

September 23, 1994
W22

Rural and Underserved Areas

It is widely believed that certain groups of people are being underserved by the U.S. health care system. They include (1) low-income families, (2) uninsured people and (3) those who live in rural areas. The following proposals meet the needs of these people innovatively - not by spending more money but by using current funds more effectively. Some of the proposals would require waivers from the federal government.

Good Idea: Medical Enterprise Zones.

Many people assume that the only way to meet the health care needs of rural citizens is to spend more government money on rural health care programs. In fact, government regulations are probably a far greater obstacle to good quality care at a reasonable price than is a lack of funds. Many state and federal regulations discriminate against rural areas by placing onerous, cost-increasing restrictions and regulations on health care providers and facilities. These regulations often cause existing facilities to close and prevent new facilities from opening. [See the sidebar on Medical Enterprise Zones.]

In most states, for example, medics who treated soldiers in the field in the Vietnam or Persian Gulf wars are not allowed to treat ordinary citizens, even if no doctor lives in the area. The same restrictions apply to nurses and physicians’ assistants, despite studies showing that paramedical personnel can deliver certain kinds of primary care as well as licensed physicians.

The concept behind Medical Enterprise Zones (MEZs) is that underserved areas should have the freedom to make their own decisions about the best way to meet health care needs with scarce resources. Accordingly, within MEZs, many of the normal restrictive rules and regulations would be suspended, creating new options and opportunities for the people who live there.

"Medical Enterprise Zones give underserved areas the freedom and flexibility to meet health care needs with scarce resources."

Good Idea: Medical Enterprise Programs.

Closely related to the MEZ is the concept of Medical Enterprise Programs (MEPs). Whereas an MEZ is defined in terms of a geographical area, a MEP is defined in terms of a market being served. The urban poor face many of the same problems as rural residents - not because of a lack of physicians and facilities, but because they have been priced out of the market by government regulations engendered by special interests. Accordingly, individuals and facilities providing medical services primarily to low-income families should be allowed to participate in Medical Enterprise Programs that are exempted from many government regulations in a manner similar to those in an MEZ.

Mediocre Idea: Subsidize Rural Providers.

Many states have adopted policies to increase the number of primary care physicians practicing in rural and underserved areas, including tuition waivers for medical students who agree to practice in these areas and limits on medical malpractice liability if a retired physician decides to voluntarily serve poor patients. A more recent and radical proposal would redistribute income from medical specialists to primary care physicians.

The implicit assumption behind these schemes is that urban politicians and bureaucrats know how best to allocate money to provide health services to rural residents. A better solution would be to send the money directly to the district so that its residents could allocate it to meet their needs. They might, for instance, use the money to provide free immunizations, to improve a clinic rather than a hospital or, if restrictions were removed, to increase their supply of nurses or physicians’ assistants.