Letter to the Editor

Cutting costs at the expense of rural communities - is it all dollars and no sense?


name here
Ben Piper
1 BMsc, ANU Rural Medical Society President *


*Dr Ben Piper


1 Australian National University Medical School, Canberra, Australia


22 February 2005 Volume 5 Issue 1


RECEIVED: 9 January 2005

ACCEPTED: 22 February 2005


Piper B.  Cutting costs at the expense of rural communities - is it all dollars and no sense? . Rural and Remote Health 2005; 5: 388. https://doi.org/10.22605/RRH388


© Ben Piper 2005 A licence to publish this material has been given to ARHEN, arhen.org.au

full article:

Dear Editor

The access to affordable and quality health care has been adopted internationally as a basic human right and healthcare professionals have an ethical responsibility to see that this occurs. However in Australia we have grown to expect more than this, we expect health care of the highest standard. How then are we to ration the healthcare resources that we have available to us, and how do we determine what is a high standard of healthcare?

It would be unreasonable to determine a high standard of health care by the level of medical technology available, because this is obviously economically unsustainable. Perhaps it is not the lack of possible medical infrastructure that is important but, alternatively, the quantity required to keep a community in a healthy and viable state.

In small communities this is much more complex than one may first like to imagine in that it is not just the services that the medical facility provides but also the services that it consumes that are important to community survival. On an ethical basis, beneficent behaviour by a healthcare institution is not only evident in its services rendered to community but in addition through its role as a consumer in the economy and provider of employment. Therefore the removal or outsourcing of such services must be carefully contemplated on all three issues to determine the ultimate impact to a community.

Indirect cost to the community

The medical industry consumes many resources in small communities and supplements a major portion of the employment workforce. In the outsourcing of services that hospitals consume, such as catering, laundry and cleaning, a seemingly menial portion of income from the community's economy is removed. In reality, this has the potential to cripple small businesses, the flow-on effects from which effect families and individuals, the very people the hospital is there to sustain. So do the decision makers and policy developers have an ethical responsibility to the community to maintain support for local economies at the expense of their bottom line? The recent ten-point plan instigated by five of the leading national health campaigners addresses this in its first point:

1. Small rural hospitals must be utilized as centers of quality health care and training and their future directed by a focus on health outcomes and community sustainability rather than purely financial considerations.1

This demands that management take a wider view to decisionmaking incorporating the economic and social impact that hospitals have on rural communities2-3. To be effective, healthcare governing bodies would be required to develop and adopt policies that can empower hospital management to act flexibly in accordance with ethical and moral considerations and not solely on economic guidance.

Why have hospitals outsourced or downsize?

The damaging effects of declining health care to rural communities have been documented throughout the world4-5. Given that the negative impacts on the viability of rural communities are known, why are we still seeing a reduction in services in rural hospitals?

One of the major problems for small hospitals is their lack of autonomy. The current trend in Australian healthcare systems is to expand control to larger and larger healthcare zones. This delocalisation restricts the hospitals' ability to make strategic decisions as to how best serve the community. After all, is that not what they are there to do? Small rural hospitals, if they are to survive, must be able to take advantage of all of their strengths. The small size of rural hospitals renders them more able to adapt and be more sensitive to the changing requirements and needs of the community. The loss of a hospital's ability to act autocratically undermines the opportunities to take advantage of this strength.


The essential nature of health care to a community is magnified in rural communities where the economic and social impacts of the loss of these services are the greatest2,4-5. If we are to believe that the services of small rural hospitals cannot be tolerated on a financial basis, the costs of deteriorating rural economies, and hence communities, must be embraced as the inevitable outcome. Ironically the loss of economic independence directly fosters low socio-economic status, one of the major risk factors in preventable disease6-7. The freedom to make strategic and operational decisions regarding healthcare services must be made possible for individual healthcare institutions under the guidance from governing bodies, state and federal. This guidance must not be based on economic rationale alone but also on the ethical nature and consequence of the downstream effects of these decisions. If health institutions and services deteriorate or become insufficient, economic growth is stunted and quality of life of those in that society is adversely affected.

Benjamin Piper
ANU Rural Medical Society President
Canberra, Australia


1. Rural Doctors Association of Australia, Australian Local Government Association, Country Women's Association of Australia, Health Consumers of rural and remote Australia, National Farmers Federation. Good health to rural communities - a 10-point plan. (Online) 2004. Available: http://documents.alga.asn.au/health/GoodHealthToRuralCommunities.pdf (accessed 19 Oct 2004).

2. Doeksen G, Johnson T, Biard-Holmes D, Schott V. A healthy health sector is crucial for community economic development. Journal of Rural Health 1998; 14: 66-72.

3. Young SH. Outsourcing and benchmarking in a rural public hospital: does economic theory provide the complete answer? Rural and Remote Health 3: 124. (Online) 2003: Available: http://rrh.org.au/ (accessed 7 February 2005).

4. Probst JC, Samuels ME, Hussey JR, Berry DE, Ricketts TC. Economic impact of hospital closure on small rural counties, 1984 to 1988: demonstration of a comparative analysis approach. Journal of Rural Health 1999; 15: 375-390.

5. Hart LG, Pirani MJ, Rosenblatt RA. Causes and consequences of rural small hospital closures from the perspectives of mayors. Journal of Rural Health 1991; 7: 222-245.

6. Hart JT. The inverse care law. Lancet 1997; 1971(i):405-412.

7. Wilkinson R, Marmot M (Eds). Social determinants of health: the solid facts 2nd edn. Copenhagen: World Health Organisation; 1998.

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