Defining "Rural" Areas: Impact on Health Care Policy and Research. Staff Paper.

with metropolitan areas, such as hospitals with comprehensive services, a 4-year college, a local bus service, a TV station, or a Sunday paper (6). A few counties that have not qualified for MSA status on the basis of demographic characteristics have become designated as MSAs through the Federal legislative process. Specif ical ly, s ince 1983, one new MSA (Decatur, Alabama) has been created (comprising two counties) and the boundaries of two existing MSAs have been enlarged by statute (62). 13 The proponents of the bill to create the Decatur, Alabama MSA argued that “MSA status would encourage a measure of economic recovery to this area. without any additional financial burden on the Federal Government” (45). Hospitals located in the newly designated MSA of Decatur, Alabama are expected to receive an additional $3 million per year in Medicare reimbursements beIZ Publ ic Lau 1 0 0 2 5 8 . 13 Publ ic Law 100-202, Sec. 530 and PWlic Law 99-500. Defining “Rural” Areas: Impact on Health Care Policy and Research Ž 11 cause of this change from nonmetropolitan (rural) to metropolitan status. The increase in Medicare outlays for these two counties would in aggregate decrease reimbursement to other hospitals because the total amount of funding for the Medicare program was not changed by this act (44). The MSA definition is designed strictly for statistical applications and not as a general-purpose geographic framework. In fact, according to official standards, “no Federal department or agency should adopt these statistical definitions for a nonstatistical program unless the agency head has determined that this is an appropriate use of the classification” (56). The OMB does not take into account or attempt to anticipate any nonstatistical uses that may be made of the MSA definitions and will not modify the definitions to meet the requirements of any nonstatistical program (62). Nonetheless, Federal agencies often use MSA designations to implement their programs. Table 6 contains a partial list of Federal programs that use MSAs for the administration of programs or the distribution of funds. Table 6--Selected Federal Department/Agencies Using MSA Designations for the Administration of Programs or the Distribution of Funds Department of Agr icul ture Farmers Home Administration Rural Housing Assistance Department of Educat ion Higher Educat ion Assistance Federal Impact Payments for Educat ion Sumner Food Service Program Department of Health and Human Services Federal Grants for Residency Train ing Aid to Organ Procurement Organizat ions Medicare Prospective Payment System Juveni le Del inquency Treatment Grants Provis ion of Services to Medicare Benef ic iar ies by Heal th Maintenance Organizat ions (HMOs) Department of Housing and Urban Development Enterpr ise Zones Public Housing Development Community D e v e l o p m e n t B l o c k G r a n t P r o g r a m Urban Development Action Grants Assisted Housing Fair Market Rents Rental Rehabilitation Awards D e p a r t m e n t o f t h e I n t e r i o r Recreat ion Areas Wastewater Treatment Works Grants Department of Labor Job Train ing Partnership Act %ost U S A a p p l i c a t i o n s l i s t e d Mere i d e n t i f i e d b y searching the U.S. Code and the Code of Federal R e g u l a t i o n s (CFR) for the term 1’MSA. IC T h i s l i s t is not caqwehensive. SOURCE: Bea, K. , llMetrwlitan S t a t i s t i c a l A r e a Standards: A p p l i c a t i o n s i n F e d e r a l P o l i c y , w ( C R S D r a f t ) , 1 9 8 9 ; U . S . D e p a r t ment of Commerce, OFSPS, “Report on the Inpct o f S t a n d a r d M e t r o p o l i t a n S t a t i s t i ca l Areas on Federa l Programs,ll 1978. 4. RELATIONSHIP BETWEEN URBAN/RURAL AND METROPOLITAN/NONMETROPOLITAN DESIGNATIONS Conceptually, the urban/rural and metro/ nonmetropolitan designations are quite different. Urban/rural are geographic designations based on population size and residential population densities, while the MSA concept embodies both a physical element (a city and its built-up suburbs) and a functional dimension (a more-or-less unified local labor market) (21 ). The Census-defined urban population and the MSA population intersect but are by no means identical; they are even less congruent geographically. Common to both are residents of most urbanized areas, the densely set t led area that forms the nucleus of the MSA (see figure 3). 1 T h e Census’ urban population includes the urbanized area population and those living outside urbanized areas in places with 2,500 or more residents. The MSA population generally includes all those living in the county or counties that contain the urbanized area and the residents of additional counties that are economically integrated with that metropolitan core. Forty percent of the 1980 rural population lived in MSAs, and 14 percent of the MSA population lived in rural areas (see table 7). About one-fourth of farm residents live in MSAs (55). “Rural area,” “nonurbanized area, ” and “nonmetropolitan area” have all been used to display vital and health statistics or to implement Federal policies in health and other areas. These “rural” definitions can be analyzed in terms of how well they include “rural areas” and how well they exclude “urban areas. ” The Census-defined “rural area” is the most specific measure, since it excludes urbanized areas and places with 2,500 residents or more. Thus, few would argue that an area designated as rural according to the Census definition is really urban. However, some might argue that the Census definition would 1 There are a few urbanized areas outside of MSAs. z A sma[ 1 n u m b e r o f r u r a l r e s i d e n t s o f e x t e n d e d c i t i es are exc [ uded f rom the urban and urbanized area populat ion. incorrectly classify as urban small towns which are located far from a large population center. In contrast, the “nonurbanized area” definition includes as rural all territory outside of its densely populated area, regardless of population size. Thus, while all “rural areas” would be included, some cities and towns of as large as 40,000 residents would also be included, as well as some outer suburbs of large urban areas. Figure 3--The Relationship Between Metropolitan Statistical Areas (MSAs), Urbanized Areas, and Urban and Rural Areas