Mouhcine Guettabi

When policymakers think or talk about economic development, they tend to focus on what they can link directly to economic activity: highways, ports, taxes, broadband and, of course, recently, housing.

There is, however, a long list of attributes that firms and individuals care about when choosing a new location, and different parties are going to assign different weights to each of these attributes. A piece of infrastructure, perhaps less visible but as important in the long run, is the adequacy of healthcare supply.

According to the N.C. Office of Rural Health, 93 counties in the state are designated as Health Professional Shortage Areas (HPSAs) for primary care. Large portions of the state also face shortages in mental health and dental providers. These designations show substantial gaps in access to care, based on provider supply, population needs, poverty levels and health outcomes, such as infant mortality and chronic disease burden.  

This means millions of North Carolinians live in communities where it is difficult to find a primary care doctor, a mental health provider or even basic dental services.

While this is, of course, a healthcare problem, it has both short- and long-term economic consequences. Locational decisions are a function of a bundle of attributes, and economic growth happens through both the attraction and retention of firms and of individuals and entrepreneurs. Firms care about cost minimization and about the amenities they can provide to their workers and therefore care about healthcare. Similarly, individuals also care about a bundle of attributes, but the cost and availability of care are frequently front and center.

Communities with limited access tend to experience several negative economic consequences.  National surveys show that workers delay care or go without it entirely when care is too expensive or hard to come by, leading to worse health outcomes, more missed workdays, reduced productivity and higher expenditures for individuals, firms and communities in the long run.

Families think twice about relocating to areas where specialty care could require hours of travel. Employers, in turn, face higher barriers to hiring and retaining the workforce they need.

The broader link between investments in health systems and economic activity is well established through job creation and labor productivity.

Healthcare is a form of human capital investment that drives broader economic performance. Importantly, at the local level, healthcare institutions often function as anchor employers, supporting not only doctors and nurses but also generating significant secondary and tertiary effects that create economic activity along the supply chain.

The uneven distribution of healthcare access means that communities with high HPSA scores are effectively operating at a disadvantage, which means they are competing for employers and workers without one of the most basic prerequisites for long-term economic vitality: reliable access to care.

We already understand this dynamic when it comes to the more visible components of economic development. We don’t expect regions to attract investment without adequate transportation infrastructure. Yet, we often view healthcare investments as social investments that are separate from an area’s economic vitality and attractiveness.

In high-growth areas like the Wilmington metropolitan area, the issue is dynamic as population growth continually puts pressure on the adequacy of resources.

It will be important to ensure the healthcare workforce and physical infrastructure keep pace with that growth. Failure to do so risks creating new access constraints even in otherwise economically vibrant regions. Over time, those constraints can begin to shape where firms expand and where households choose to locate.

Mouhcine Guettabi is a regional economist with UNCW’s Swain Center and an associate professor of economics at UNCW’s Cameron School of Business.