As the U.S. health care industry rapidly changes in response to profit motives, changing demographics, and the way in which services are paid, we are seeing the evolution of a new driving force behind neighborhood inequities in health outcomes: an increasingly gentrified health care system.
In much the same way that urban gentrification continues to see the exclusion of poorer residents from once-disinvested and now newly desirable neighborhoods, so are these residents increasingly excluded from accessing healthcare and the health care jobs in these neighborhoods that have long been a steady source of employment. These are just some of the factors leading to the now common refrain in public health that your zip code says more about your health than your genetic code does.
Rates of diabetes in Dallas vary significantly, where rates in higher poverty areas soar to above 20% while more wealthy neighborhoods are generally healthier. Map by BCNUEJ.
The unintended consequences of ACA
In the U.S., access to health care has long been associated with wealth. In the absence of a national health system or universal health care, those who can afford to pay for care, or who have employers that provide affordable health coverage, can get the care they need. Those who can’t afford care and are un- or under-insured get and stay sicker, and die sooner. These inequities are even greater for Black and Hispanic Americans, who in 2010 experienced uninsurance rates of 18% and 30%, respectively, compared to 10% among White Americans.
In 2010, the Affordable Care Act (ACA), one of President Obama’s signature achievements, sought to close this gap. Among other initiatives, the ACA expanded job-based health insurance, brought down the cost of private health insurance by creating new “marketplaces” for individual plans along with income-based subsidies to help purchase them, and increased the income eligibility threshold for Medicaid, the public health insurance program for poor and disabled Americans. The law also attempted to correct some of the effects of the private health insurance system by adding new protections, for instance, not allowing insurers to charge more or refuse coverage to people with pre-existing health conditions, and requiring coverage of certain “essential” health benefits, like hospital stays, prescription drugs, mental health and maternity care.
However, by building on the existing market-driven system, the ACA also left many Americans behind. “Affordable” job-based health coverage can still cost nearly 10% of a family’s income, and the reliance on employers to provide that coverage means losing a job can mean losing insurance. Employer-based coverage also only applies to full-time workers, leaving many low-wage, part-time employees without these protections. And, while the law intended to increase public coverage through Medicaid, a legal battle resulted in many states refusing to expand the program for their lowest-income residents. While the law succeeded in bringing down the number of uninsured Americans from a high of 47 million (nearly 18% of the population) in 2010 to 28 million in 2016, this number is still unacceptably high.
Several years in, we are seeing that the ACA has had other unexpected effects on coverage, care and jobs that mimic those of gentrification in cities.
Closure of Doctors Medical Center in San Pablo, 2015 due to bankruptcy. Via abc7news.
Access to coverage
In 2012 the U.S. Supreme Court ruled that states could opt out of expanding their Medicaid programs under the ACA. Those that did were primarily Southern states with the largest number of poor and uninsured residents, and Black residents in particular. This has created a troubling natural experiment. Several studies since the passage of the ACA have shown that people living in expansion states have greater access to care, lower out-of-pocket costs, and are more likely to get preventive screenings that detect dangerous and costly health problems early. However, in non-expansion states, people who would otherwise be eligible for Medicaid now fall into a “coverage gap”, where they qualify for neither Medicaid nor government subsidies to help buy a private plan. In addition, not only have expansion states not suffered financially, they have benefited from the flow of additional dollars from newly-insured patients into their health systems.
Access to care
Some experts also blame ACA provisions intended to lower health care costs and improve quality care for spurring a wave of hospital consolidations and closures across the country. Funding incentives that focus on paying for quality, rather than quantity, of care have led hospital systems to restructure and consolidate to improve efficiencies and capture more revenue. As a result, many health systems in the U.S. are closing full-service hospitals and replacing them with more profitable specialty practices, free-standing urgent care clinics and emergency rooms, and ambulatory surgical centers – often sited in higher-income, often gentrifying neighborhoods where most residents are affluent and insured. At the same time, community health centers, which provide low-cost services to the uninsured, have struggled in the face of uncertain funding. This is affecting cost as well as access; procedures at hospital-owned outpatient clinics cost more than they would at a doctor’s office, and several studies have found higher prices for hospital services in consolidated markets. These shifts in the provision and cost of basic healthcare reflect the same patterns as those in the cost of living in gentrifying neighborhoods: when goods and services are increasingly provided for the new, wealthy class, they often leave behind less affluent residents.
The boarded-up, rear entrance of St. John’s Queens Hospital in 2013. The hospital closed in bankruptcy in 2009. Photo by Louis Flores via Progress Queens.
Access to jobs
Healthcare consolidation and access isn’t just affecting access to care. It’s also affecting the people who provide it. Health care systems are among the largest employers in most states, and have historically provided needed and steady employment. Almost 13 percent of private-sector jobs in the U.S. are in healthcare, making it the nation’s strongest job sector. And hospitals are the largest employers by far, employing six million workers. But as care changes, so do jobs. A recent study found that nonprofessional jobs (i.e., technicians and aides) in non-hospital clinical settings like surgical centers and radiology facilities grew at three times the rate of hospital jobs from 2005 to 2015. These jobs pay less than comparable jobs in hospitals, and are less likely to be unionized. And in a consolidated market, without union representation, employers have more power to keep wages low. Thus, as prices rise, less affluent residents are losing access to steady jobs that provide both good pay and benefits like health insurance resulting in greater vulnerability to displacement and difficulty in maintaining their livelihoods.
Closure of St. John’s Queens Hospital. Photo via firenyc.
What the loss of a safety net means for residents of gentrifying neighborhoods
One of the areas we’re seeing these issues play out is in emergency care. Health care executives argue that the shift from hospitals to smaller, specialized facilities will improve care as new technologies limit the need for overnight hospital stays. But for lower-income individuals, the loss of a hospital can mean the difference between being treated or not. In the U.S., hospital emergency rooms (ERs) legally must treat any patient who walks in the door, regardless of their insurance status or ability to pay (although this doesn’t protect patients from receiving a large bill later on). But freestanding ERs aren’t bound by the same rules, and in fact, due to federal hospital licensing requirements, they are not allowed to accept Medicaid or Medicare (the public insurance program for elderly and disabled people) if they’re not affiliated with a hospital.
What does that mean for patients? Today, if you can afford it, you might choose to visit a free-standing ER at a local shopping center and be treated in a few minutes, rather than waiting for hours in a hospital ER. If you’re wealthier, you might even pay a $10,000 annual fee, plus medical costs, for a concierge service that provides immediate ER access whenever you need it. But if you’re poor, and live in a neighborhood without a full-service hospital, it’s a different story. Even if you’re lucky enough to have insurance, you may not reach an ER in time to be treated.
In Chicago’s South Side, for instance, the death of Damian Turner in 2010 is a clear example of how inequities in health care access can lead to inequities in health outcomes in poor and minority neighborhoods. After being caught in the crossfire of a drive-by shooting, Turner died as he was driven over nine miles to the nearest level 1 trauma center. His death became the impetus for community action as residents held the University of Chicago Medical Center accountable for the subpar services available in their neighborhood, ultimately leading to the opening of a new area hospital in 2018, the first trauma center to open in the neighborhood in nearly 30 years.
Community organizers lead a die-in and rally at the University of Chicago, in 2015. After years of protest, amid an epidemic of gun violence, a facility opens this week in Hyde Park. Photo by Sara Ji via The New Yorker.
Health care gentrification at a local level
We can see evidence of these gentrification effects in Dallas, Texas. Texas is the nation’s most populous state, and also one of 17 that has refused to expand Medicaid coverage. Statewide, Texas has the highest rate of uninsurance at approximately 15% of the total population. Almost 1.2 million people would have been eligible for insurance under Medicaid expansion. Of these, 638,000 remain in the coverage gap. Of those, the vast majority are people of color and members of working families.
Although Dallas is home to 18 of the richest Americans, income inequality in the city is on the rise and nearly one-third of the adult population has no health insurance. Meanwhile, across Texas, nearly half of those who would have been newly covered under the expansion of Medicaid are uninsured. Dallas also has the highest out-of-pocket healthcare costs in the nation. These statistics alone are troubling, but an analysis of recent trends in the Dallas health care industry show that the city’s health care services are shifting in ways that may be shutting some residents out of both jobs and care.
In Garland, a working-class Dallas suburb, the $11 billion dollar health system Baylor Scott & White recently closed the local hospital citing low patient volume, instead focusing resources on hospitals in the more affluent Frisco and Plano suburbs. The closure affected 700 workers, as well as an additional 100 employees of Aramark, the hospital’s food service vendor. While executives have made promises to place the workers within Baylor’s network, there is no guarantee these jobs will offer the same work hours, pay or benefits, require the same skills, or be conveniently located.
A few miles up the road, the city has approved a $25 million medical facility that will be “one of the largest multi-disciplined medical centers in the region”. The facility is a project of New Era Partners, a large real estate development company of “experienced market leaders” committed to ”building a highly profitable real estate portfolio for our investors”. The medical center will include profitable urgent care, specialty practices, cardiac care, concierge medical services, and an imaging center. In a sense this company aims to profit not only from the “rent gap”, a driving force behind real estate development in gentrifying neighborhoods, but from the “health care gap” in which luxury healthcare services offered to wealthier residents result in greater profit.
The majority of the building’s space will, in fact, be leased to Baylor Scott & White Health System and its affiliates. And there is evidence that in this new environment, upscale centers offering less complex care and bound by looser regulations may be the best business investment. Recently, two of Dallas’ independent, physician-owned facilities aimed at attracting affluent and well-insured patients closed amid a series of financial and legal scandals.
Meanwhile, Dallas’ only safety-net hospital treating low-income and uninsured patients, Parkland Memorial, is among the busiest public hospitals in the nation, with more than one million patients each year. While the hospital recently moved to a $1.3 billion state-of-the-art facility, Parkland also depends significantly on private donations from wealthy individuals to fund care for the city’s most vulnerable residents. The hospital’s Center for Clinical Innovation, which aims to better coordinate health care and social services for high-use patients has been almost entirely funded by $50 million in private and non-profit grants.
While working class suburb, Garland, lost a major hospital in 2018, new stand-alone ER’s and luxury healthcare facilities, including those owned by New Era Partners, are popping up in wealthy enclaves in the Dallas area. Map by BCNUEJ.
In addition to new profit-seeking medical centers, it’s worth noting that Dallas and neighboring Houston already have almost 70 percent of the free-standing ERs in Texas, often deliberately sited in neighborhoods with affluent, insured residents. Many of these facilities don’t take public insurance, and even patients with private coverage can be surprised by large bills. In fact, the problem is so widespread that the Texas legislature recently passed a law requiring free-standing ERs to be more transparent about the type of insurance they accept.
Equity over profit
While Dallas is an extreme case, it raises important questions about whether profit potential should be the driving force in delivering health care services. We know that rising income inequality both leading to and resulting from structural changes to the US healthcare system continues to contribute to inequitable health outcomes. But now, as access to basic care is dramatically reduced by hospital closures in poor areas and replaced by luxury care for the wealthy in up-scale neighborhoods, and formerly stable health care jobs are eroded, health increasingly becomes a privileged good rather than a basic human right for all citizens. As Damian Turner’s story and others show, siting and funding health care facilities equitably, based on where they are most needed rather than where they will generate the most profit, can literally mean the difference between life and death.
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This article is co-authored by BCNUEJ researcher Helen Cole.
Top photo: Dave Knapik on flickr
