Written by Jerald D Peters Architect AAA AIBC MAA OAA SAA FRAIC LEED® AP, Principal at ft3

The Economics of Rural Towns

The Economics of Rural Towns

The world continues to become more urban. This pattern has continued for decades and has had a significant impact on smaller communities located in rural environments with modest populations. Many of these communities existed with the sole purpose of supporting family based farming or fishing industries, as examples. In recent years, those industries have become more corporate and mechanized and populations have relocated to larger urban centres for employment and lifestyle choices. In short, the economies of small towns are fragile. Many towns have attempted to re-purpose themselves, choosing specialty manufacturing industries or tourism as a means to future economic growth. The success of this is limited, dependent on entrepreneurial leadership for industry or natural vacation destinations for tourism.

Living Where You Want to Live versus Living Where You Need to Live

As farmers, for example, retire from farming it is common that they relocate to the nearest town once they have sold the family farm. Some will relocate to larger centres where children and grandchildren reside or where social, recreational, commercial and entertainment opportunities are more readily accessible. Many wish to remain in the rural settings that they have spent much of their lives in, close to friends or family that remain.

As long as a retired rural resident is living an independent lifestyle, it is relatively straightforward for them to remain in their chosen community. They may remain at the farm homestead, relocate into town by purchasing an existing home, or have a new home built in their chosen community. Purchasing a home may be limited due to a modest market of home; however, resale values will be modest compared to nearby urban environments.

Complications arise when the senior population is no longer independent. Support services within small communities are extremely limited and dependent on a skilled workforce that is likely based in larger centres.

Assisted living complexes (or other forms of supportive housing) are difficult to develop in small communities due to the economics of the project and ongoing operational costs.

First, assisted living projects generally require a large capital infusion from a single source or organization. As seniors age and their ability to remain functionally independent diminishes, they rarely have the opportunity to anticipate precisely when their housing needs will change. Planning, design and construction of assisted living complexes is minimally a two and a half to three year process, and often much longer due to complications. A senior requiring assisted living accommodation will have a much shorter time frame from identifying the need to moving day. Furthermore, the life lease model, which allows organizations to utilize the capital infusion of their tenants, is less desirable to a tenant at that stage of life. The preference appears to be to maintain assets in a more liquid state rather than invested in a housing model. Combined with the incongruent time frames of developing a life lease project, organizations that have the capital to build with their own resources and rent to tenants have been more successful.

Integrated Health Centres, Stretching the Staff Complement to Keep the Facility Open

In many small rural towns the largest employer is the modest local hospital or nursing home. Many of these facilities are decades old, established at a time when the rural economy was vibrant, based on the family farm and the supporting industrial, retail and service sectors necessary to support the population.

Times have changed and the populations are diminished, access to urban centres is more readily available and a smaller workforce is able to farm vastly larger areas of land. In short, global urbanization rings true with North American trends. Today, in many of these communities, the health care facilities are the only growing employer.

As a result of shrinking communities, attracting and retaining appropriate skilled health care professionals is increasingly difficult. There are a number of issues with finding and keeping doctors and nurses in these types of communities:

  • Are there enough doctors to cover 24-7 call hours?
  • If a doctor or two leave or are unavailable, can the facility retain its accreditation?
  • Are the communities attractive enough for trained professionals to want to choose the rural lifestyle?
  • Is there enough of a community of professionals for professional development and collegial exchange?
  • Do the staff have enough specialty skills to be able to provide the services required to maintain the facility?
  • Can the doctors earn sufficient income on a fee for service basis or will the community have to supplement income in order to attract staff and what is to prevent the doctors from leaving?
  • Are you competing with the neighboring community for the same personnel?
  • And if these are the questions a community is struggling with, are they also asking: do we have sufficient reason to keep this facility or facilities open?

If there is sufficient reason then an appropriate method to build capacity of medical professionals within a community or region is to combine acute care, long-term care and community health facilities into the concept of an tntegrated health centre. In this model, which is not a new or novel concept, health professionals are able to service the broader needs of the community with the support of generic staffing. In some cases, combining the long-term care and acute care needs of a community is sufficient to rationalize staffing requirements which would otherwise be unobtainable as separate facilities.

In an ideal, integrated health centre, the concept does not end with acute and long-term care. Rather, community health and a medical clinic are a natural extension, enabling doctors to establish a practice in the community while serving the needs of the frail elderly and acute care needs of the community. Furthermore, providing assisted living accommodations on the same campus allows efficiencies in providing meals, housekeeping and nursing support (as required).

The design of an acute care facility has much to learn from the current thinking in long-term care. Over the past decade, long-term care has developed a home-like model that focuses on the resident in control of their home – nursing and support staff are "guests" in this home providing service to the needs of the resident. This shift from a medical model to a residential model is a lesson that can be adopted in acute care and it blends beautifully into the integrated health centre. One of the major obstacles to significant improvement in acute care is the reluctance to change substantively the "systematic methodology" to delivering care. Evidence of this mindset is in the design of current acute care facilities based on operational processes rather than patient needs. The long-term care model has made this shift, albeit reluctantly, due to the persistence of families and champions of the cause of the resident. A similar movement is needed in acute care.

Rural communities, in many cases as last resorts or out of desperation, are willing to work with new or experimental models. Clearly, the time has come for communities to pursue alternatives. Fortunately, the model is based on common sense, practicality and a proven track record in long-term care.

Are we Meeting the Minimum Standards and is it Sustainable?

A change in thinking and creation of demand is necessary for rural communities to be able to sustain acute care, nursing care, and seniors housing within the community. Smaller complexes with crossover services from acute care into long-term care in the nursing disciplines, and from long-term care into seniors housing in the provision of meals, housekeeping, and home care services will enable demand to be created and sustained. The challenge will be in maintaining certification of these facilities based on adequate qualified medical professionals. It will also require a willingness of medical professionals to provide a broader range of service, including services for which the doctor or nurse may be overqualified. Without a holistic approach to resolving these issues within these communities, the future is rather bleak. With a holistic rethinking, however, the future has the potential to be much better for our burgeoning seniors population in rural communities.


Written by Jerald D. Peters, Architect, AAA, AIBC, MAA, OAA, SAA, MRAIC, LEED® AP, Principal at ft3

Jerald Peters brings more than 20 years of experience creating vibrant, functional spaces, and has provided leadership and technical expertise on an extensive array of projects in healthcare, institutional, housing, commercial, and religious environments.