Bangor Daily News - May 19,
2007
Graduating to a federal
payment
By Todd Benoit
o
all the new college graduates looking for meaning in their freshly limitless
if somewhat indebted lives, I just want to say one word to you — just one
word. Are you listening? Medicare. How do I mean that? There’s a great
future in Medicare. That’s according to two researchers who see "health care
as a key industry in the changing economy of rural areas."
But like the one-word advice of "plastics" in the movie "The Graduate,"
what might be rewarding economically also raises questions about the sort of
state Maine is and to what it aspires.
The evidence compiled in a new study by Charles Colgan and David Hartley
of the Muskie School at the University of Southern Maine is both impressive
and disturbing. In 1969, they write, health care accounted for less than 5
percent of Maine employment; by 2005, it had more than tripled to 17
percent. As high as that growth has been statewide, it’s even higher in
rural counties.
The so-called rim counties of Oxford, Somerset, Piscataquis, Aroostook
and Washington lost 3,000 manufacturing jobs between 1990 and 2005, but
gained 6,000 health care jobs, and the health care wage, they write, exceeds
overall wage growth both in these counties and overall in Maine. What funds
this terrific expansion? Among small rural hospitals, about half of the
money comes from Medicare, and another 11 percent from Medicaid.
The way Colgan and Hartley seem to see it in their study published by the
Maine Center for Economic Policy, Maine is going to keep getting older on
average and could receive more federal dollars for health care, so why not
make a virtue of a necessity? "Because of its rapid growth in rural areas,
health care employment offers the most attractive opportunities for young
people to stay in the region," they write.
A similar thought occurred to researchers at the Moore School of Business
of the University of South Carolina not long ago. They figured that state’s
Medicaid program, with a federal match worth $2.1 billion, supported 61,000
jobs and $1.5 billion in income. Maine’s Medicaid federal match is $1.4
billion and proportional claims certainly could be made about its job and
wage production. Coincidentally, the Palmetto State competes with Maine in
receiving more federal dollars than it sends to Washington. As of 2004,
South Carolina got back $1.38 for every $1 sent in; Maine got $1.40.
No one who has seen the value of local hospitals would doubt their
benefit to the physical well-being of a region or as a revved-up economic
engine, and as Colgan and Hartley point out, they also bring technology and
new people to places that otherwise might not have them.
But this dependence on federal transfer payments as a form of economic
growth carries real risks to, if nothing else, the reason rural areas should
be respected and supported. A few years ago, Joel Kotkin, a senior fellow at
the New America Foundation, wrote about saving the rural Great Plains by
encouraging entrepreneurs to take risks.
The subsidy system and transfer payment systems he traced to the "dust
bowl" 1930s, "have drained rural communities of most of the spirit of
innovation and self-sufficiency that characterized them in their pioneer
days. Instead of remaining ruggedly self-reliant, as most Americans think of
them, they increasingly depend, like the much-disdained urban ghettos, on
their own forms of welfare — farm subsidies, Social Security, grants to
Native Americans — to survive."
These payments offer endless incentive to support a regulated,
homogenized and fully documented community through a flow of services to a
population, mostly elderly, who do not usually have a strong interest in
reinventing a local economy. The rural sense of place, for better or worse,
is tolerated only to the extent that it doesn’t interfere with Washington’s
sense of control.
Colgan and Hartley don’t advocate Medicare as a restorer of rural life.
They merely measure health care’s large impact on it and point out the
industry’s undeniable economic benefits. What is that federal cash worth to
a poor region that depends on transfer payments to continue to grow? A lot,
I’d guess, but nothing is given away; there’s always a cost.
The cost in this case might be a broad swath of the state that cannot
afford to get itself out of its dependence on those federal transfers, and
beneath that generations of those local new graduates who want something
more than the security of the money line from Washington. Maine won’t know
about them, naturally, until after they’re gone.
