By Liz Carey for The Daily Yonder.
Broadcast version by Mark Richardson for Minnesota News Connection for the Public News Service/Daily Yonder Collaboration

When rural patients incur medical bills they can’t pay, the impact of the debt reaches far beyond their own personal pocketbooks, a new study has found.

Medical debt also impacts the hospitals that can’t collect on the debt and the communities they serve, according to a research brief from the Rural Health Research Center at the University of Minnesota. Although medical debt is something all communities have, it hits rural communities harder, Carrie Henning-Smith, co-director for the center, said.

Researchers interviewed rural hospital administrators in seven states – Arkansas, California, Illinois, Texas, Vermont, Washington and West Virginia – to look at the implications of medical debt on rural communities at large.

“We know how widespread medical debt is,” Henning-Smith said in an interview with the Daily Yonder. “We weren’t particularly surprised by anything we heard, but I think one thing that stands out to me is that this is not just an issue of healthcare facilities passing on big bills to patients and then patients shouldering that burden.” 

“This is really an issue that impacts individual patients, whole communities, and healthcare facilities, and I think smaller rural facilities that have a more tenuous bottom line are some of the most impacted,” she said.

Research indicates that about 44% of all U.S. adults are affected by medical debt, and that $88 billion in outstanding medical bills is currently in collections across the country. Researchers found the debts impact a rural hospital’s ability to continue paying their employees. With fragile bottom lines, rural hospitals are less likely to absorb the debt, respondents said.

A respondent from a Midwestern state said to the researchers, “One of the statistics that I think is really relevant is that we are about a $150 million organization… and 65% of those dollars go back in the form of compensation and benefits to our employees. So when we have medical debt that becomes excessive and we’re struggling to collect on the work that we do, it impacts our ability to employ [providers] and to serve our patients.”

With less revenue coming in, most respondents said, they are less likely to invest in equipment upgrades and their facilities, as well as less likely to hire more staff. Additionally, respondents said it’s harder to collect on that debt. 

“It’s a non-recourse issue. We can’t go back and take back what we’ve done,” a Southern state administrator told researchers. “You can’t repossess anything medical like you can with a car or a home or anything like that when there’s financial troubles. We end up really just getting unpaid, mostly.”

Researchers found that much of the blame for the debt issue is not solely because of patients who are underinsured. In many cases, insurance companies and other payers – including Medicare, Medicaid and Medicare Advantage – are not covering the cost of care that the hospitals provide.

“They need to have their cost recouped for the care that they provide,” Henning-Smith said, “and when they have patients who are uninsured or underinsured or when they are dealing with insurance companies and payers that are not providing a sufficient amount to pay for the cost of the care, then the facility suffers and the patients and community suffer too.” 

“It’s clear that our payer system is broken and that we have people whose care is not compensated at all or not at the rate that it needs to be to keep these facilities financially thriving,” she said.

Even if a patient is insured, some hospital administrators surveyed pointed out that underinsurance can create problems for patients and hospitals as well. High deductibles and plans with limited coverage options shift the responsibility for payment from the insurance company to the patient.

An administrator from the Midwest told the researchers, “Even the people who have the ability to pay, when you have more things like a high deductible health plan, no matter what your income is, it’s not easy for very many people if you have a $5,000 deductible. When that bill comes, that’s a difficult thing.”

Alan Morgan, CEO of the National Rural Health Association, said when rural hospitals don’t get paid, the impact is far reaching. Hospitals are typically among the largest employers in rural communities, and if a hospital fails because it can’t pay its bills, the whole community suffers.

“We’re in the midst of a hospital closure crisis and declining points of access to care in rural communities and it is because of bad debt, period,” Morgan said in an interview with the Daily Yonder. “When a hospital has to find ways to write off bad debt… for a lot of these rural hospitals, they’re operating on the margin and carrying large amounts of debt and uncompensated care that sometimes drives them to closure.”

When hospitals close due to financial problems, the economic hit on the community is multi-faceted, he said. The lost jobs not only reduce tax revenue coming into the community, but also impact the amount of consumer dollars being spent in the community. It means less income for businesses indirectly linked to the hospital, like flower shops, he said. And once the hospital closes, getting new families and businesses to move there becomes more difficult.

Fixing the issue will mean reforming how rural hospitals are reimbursed, Henning-Smith said.

“The message needs to continue to be about payment reform and understanding that medical debt is a widespread issue that’s not going away, but it’s not an individual issue and it’s not a matter of personal and individual responsibility,” she said. “It’s a community and a collective and a societal issue that if we don’t address, it’s not going to only impact the health and access to care of individuals, but it’s also going to impact availability of care in rural communities and places that need that care the most.”


Liz Carey wrote this article for The Daily Yonder.


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Indiana lawmakers paused action this week on a bill which aims to prevent crashes caused by dangerously overgrown rural intersections after concerns arose about liability.

The bill originated after Riley Settergren, 17, died in a 2017 collision at a Hancock County intersection.

Jay Settergren, his father, testified Monday before lawmakers, urging stronger rules to prevent similar tragedies.

"Just days before his senior year, Riley was taken from us by a piece of farm machinery that could not see at an intersection because it was obstructed by corn," Settergren recounted. "They had to move out further into the road. The truck Riley was a passenger in was struck. Riley was killed instantly."

The current proposal would mandate property owners or renters near rural intersections clear all vegetation or obstacles above three feet, ensuring drivers can see approaching traffic. However, farm groups oppose the measure, citing liability risks and potential loss of productive farmland.

After Riley's death, his family created a foundation honoring their son, placing caution signs at intersections statewide to alert drivers to the risks near farmland. Riley's father stressed to lawmakers while signs help, permanent visibility improvements require enforceable legislation.

"We need to move to the next level," Settergren urged. "We need help to pass this putting responsibility on the landowners and the lessees to make sure that they are maintaining their corners, and their crops, and their properties."

Rep. Jim Pressel, R-Rolling Prairie, said legislators intend to amend House Bill 183, shifting emphasis away from strict sightline triangles, toward maintaining existing road right-of-ways.


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The future of a big carbon capture project in the Midwest was thrown off balance after a new South Dakota law was adopted. Rural property owners made a big push for the policy and their organizing is getting noticed.

South Dakota's governor just signed a bill prohibiting eminent domain for carbon dioxide pipelines. It is in response to a proposed line where the company behind it has not secured all the voluntary land agreements it needs. Worried landowners found sympathetic ears in the Legislature.

Sarah Jaynes, executive director of the Rural Democracy Initiative, said outcomes like these reflect the mindset of smaller communities when big projects come their way, potentially affecting their way of life.

"Rural people are not in the habit of fighting things," Jaynes pointed out. "They're in the habit of taking a close look at what's proposed for their communities after decades of exploitation."

She is referring to corporations outsourcing jobs from rural areas, as well as agricultural firms wanting to add larger animal feedlot operations. Jaynes noted the decline of local news outlets is likely playing a role in how communities are responding. Without access to key information, residents are enhancing their coordination to have a bigger voice.

The multistate carbon pipeline is proposed by Summit Carbon Solutions, which wants to capture ethanol plant emissions and store them underground. It touts economic and environmental benefits but some skeptics see it as a power grab, especially if objecting landowners are forced to let it run along their property through eminent domain.

Jaynes explained in a broader sense, rural residents are not confined to narratives about what they care about.

"They want to make sure that they have clean air and water and access to nature," Jaynes emphasized. "They want to take care of their land."

Such sentiments have surfaced in polling from the Rural Democracy Initiative.

As for the Summit project, the new law might lead to a legal challenge. Summit has won permit approval in other states and is trying again in South Dakota. But the uncertainty, along with the land restrictions, could make it harder to begin construction. The governor insists the action will not kill the project, calling it an "opportunity for a needed reset."


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Later this month, on March 26, the U.S. Supreme Court will hear arguments in a case that challenges the constitutionality of a federal fund that aids rural broadband service.

South Dakota advocates say a negative outcome could be devastating for customers.

A conservative organization brought the case, hoping to end a Federal Communications Commission fee that flows into what's known as the Universal Service Fund.

It provides $8 billion a year for telecommunications programs geared toward underserved populations. That includes high-speed internet service in rural areas.

Kara Semmler, general counsel and executive director of the South Dakota Telecommunications Association, said she worries about the impact if the challenge is successful.

"Children will be missing out on educational opportunities," said Semmler, "businesses will lose their competitiveness."

Industry groups say rates for customers, benefiting from the fund, will double if it's struck down.

The plaintiffs contend the fee mechanism used to prop up the fund is more like a tax, meaning Congress should have the oversight.

Semmler said shifting that power would result in funding uncertainty for an industry that relies on long-term planning.

Cellphone service providers and other telecom companies pay the fee that's at the center of the legal argument. Those costs are passed along to consumers across the country through their monthly bills.

Semmler said it's a small price to pay to maintain critical broadband infrastructure in rural pockets.

"It's that ongoing operation, maintenance, and affordability of the product," said Semmler. "It does no good to have infrastructure in the ground if it becomes unaffordable for South Dakota consumers to use."

Semmler said they've had productive conversations with South Dakota's Congressional delegation about "Plan B" strategies.

But she acknowledged the budget-cutting tone in Washington D.C. right now, while adding it would be hard for state government to fill any sudden funding gaps.




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