Pharmacy deserts

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This could be an initiative in keeping with the November 2020 post, "What should a domestic Marshall Plan/21st Century New Deal look like?."

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The Washington Post has a story, "The last drugstore: Rural America is losing its pharmacies," about the dearth of pharmacies in rural areas in particular, because of market consolidation--nationally there are really only three primary firms, CVS and Walgreen's, which have many many thousands of stores, and Rite Aid, which is about 1/4 of the size of either of the other two.  

Note that the Post covered this story in 2018, "The Health 202: Here's why rural independent pharmacies are closing their doors."

And a few months ago, I remember reading this Kaiser Health News story, "How One Rural Town Without a Pharmacy Is Crowdsourcing to Get Meds."

A couple of "general merchandise store chains," Shopko and Fred's, which served smaller communities, included pharmacies or thought that was a point of differentiation (Fred's).

But now both companies are out of business, further reducing the presence of pharmacies in rural areas.

Supermarkets can be a major force in pharmacy, including Walmart, although the stores with pharmacies tend to be in larger communities.  This is much less the case for the much smaller stores that are more likely to serve rural communities.

And some supermarkets are getting out of the business too ("Wakefern to shut 62 ShopRite pharmacies," Supermarket News).

Unfortunately, today's pharmaceutical reimbursement programs penalize independent pharmacies, which is why there has been such consolidation.

Pilcher-McBryde Drug Store in Selma Alabama.  Photo by Michael Harding.

There are independent pharmacies supported by national pharmaceutical and medical supply distributors, run as franchises, like Good Neighbor, Health Mart, and Medicine Shoppes.  

Somehow, Rexall still exists in Canada, but I don't think in the US, although there are still remnant stores, maybe they still have signage up but are otherwise independent.

Here and there hospital groups may operate community pharmacies, but increasingly they are less interested in doing this because of cost and liability, especially the need for higher security.  For example, the Intermountain Hospital Group based in Utah recently closed all its 25 pharmacies ("Intermountain Healthcare to close 25 retail pharmacies across Utah," KUTV-TV).

Five-ish solutions.  Working with the National Community Pharmacists Association, the National Grocers Association, and other organizations...

Supporting the creation of independent pharmacies.  When I first got involved in commercial district revitalization, I remember a story recounted by the Hometown Advantage initiative of the Institute for Local Self Reliance.  A community that lost its pharmacy sent a letter to every registered pharmacist in the state, offering incentives for them to open a store in their city, that they would own.  They got a taker.  ILSR wrote about this a couple years ago as well ("How a Rebirth of Independent Pharmacies Could Cure Rural Ills").

A group like the National Association of Counties could work with the franchise groups and communities to offer an incentive program to address this.

Small supermarkets.  The same thing can be done with small supermarkets.  Just like Ace Hardware has a program to open hardware stores in association with supermarkets especially in small communities, the franchise groups could do this too, in association with a group like the National Association of Counties.

Or independent pharmacies could co-locate with supermarkets, operated independently, but each supporting the other and sharing customers.

State incentive programs.  Pennsylvania has a program to support the opening of supermarkets in underserved communities, called the Fresh Food Financing Initiative, which involves the state and community development and food advocacy organizations ("Success story," Reinvestment Fund; eligibility, application, Food Trust).  

A similar program can be created by states to support the opening of pharmacies in underserved areas, working with independent pharmacies and small supermarkets, backstopped by independent franchise systems

Federal and state insurance supports.  Just as teaching hospitals get a premium payment from federal insurance programs to recognize the greater costs and benefits from their teaching role, state and federal health insurance support programs could provide greater reimbursements for stores located in pharmacy deserts, just as teaching hospitals get a premium for the extra costs of teaching. The National Community Pharmacists Association is suing the federal government over this issue. 

Doctors offices.  Doctors could do this too ("Should physicians dispense drugs to their patients?," Quartz), although it creates a significant cost and security issue.  Most doctors offices aren't constructed to the security level required for dispensing pharmaceuticals.

More research on the economic impact of Walmart

From the Economic Development Quarterly:

New WalMart stores put large retailers out of business, mom-and-pop stores less affected: Focus issue of economic development quarterly reveals economic and social impact of WalMart stores

Los Angeles, CA (October 23, 2012) Ranked as one of America's largest corporations and the largest private employer in the United States, some say that WalMart stores are catalysts for economic growth in U.S. communities, while others claim that they can have damaging effects on local shops. However, a new study finds that it is the larger retailers such as Ames Department Stores, Sears, and Kmart that lose business with the arrival of a new WalMart store, while smaller retailers are not affected to the same extent. This study is published today in a new Focus Issue of Economic Development Quarterly (a SAGE journal) that describes the economic development impact of Wal-Mart stores. 

"Wal-Mart predominantly might be replacing stores already characterized by nonlocal management," wrote the authors. "This seems to contradict a widely held belief that Wal-Mart hurts locally owned subsidiary business establishments." 

Using Indiana as a case study, researchers Michael Hicks, Stanley Keil, and Lee Spector studied the financial impact of new WalMart stores on establishments nearby. They found that competing stores with 49 or fewer employees were affected very little after a Wal-Mart was opened in the county and competing stores with 50 to 99 employees received a very small negative impact, while stores with 100 to 249 workers closed at a rate of about .5 stores per year, and competing stores with over 250 workers closed at a rate of 1.5 stores per year. 

This Focus Issue of Economic Development Quarterly, out today, includes four articles that detail the economic impact of WalMart stores across the nation. These articles include: 

• "Walmart and Local Economic Development: A Survey," by Alessandro Bonanno and Stephan J. Goetz 
• "The Impact of an Urban WalMart Store on Area Businesses: The Chicago Case," by David Merriman, Joseph Persky, Julie Davis, and Ron Baiman 
• "Revisiting WalMart's Impact on Iowa Small-Town Retail: 25 Years Later," by Georfeanne M. Artz and Kenneth E. Stone 
• "Mom-and Pops or Big-Box Stores: Some Evidence of WalMart's Impact on Retail Trade," by Michael Hicks, Stanley Keil, and Lee Spector  

"Where an auto plant or a high-tech research park brings a range of economic development benefits to a community, the economic development benefits generated by a new big-box retailer are far less obvious," wrote the issue editors. "While these articles do not focus on policy implications, the research results reported here suggest great caution in subsidizing WalMart retail locations."


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One of my hypotheses relating to the economic impact of Walmart, in talking with the professor (David Merriam) at Loyola who has done studies of the impact of the first Walmart store in chicago--and they have access to sales tax data by zip code--is that some of the job loss impacts of locally owned stores that close are "mitigated" by the opening of other chains (banks, autoparts stores, etc.) attracted to locating stores in proximity to Walmart, and some aren't retailers (like banks). 

And that a significant (negative) impact in part the coming of Walmart to communities concerns the   reshaping of "local" commercial districts away from being comprised of "local" businesses.  In short local businesses close, chains open. 

But that wasn't something the Loyola study really looked into (and presumably the others did not either).  But you can suss that out kind of impact from the competing positive study that Walmart commissioned from Mari Gallagher Associates.

And because the positives from the economic multiplier effect are less for monies spent at chain stores as opposed to locally-owned stores, this ends up having a significant negative economic impact.  (See "Independent Businesses Deliver Bigger Economic Benefit, Study Finds" from the Institute for Local Self-Reliance.)

I haven't read any of the papers yet, and I do wonder if any of the EDQ studies considered any changes to the composition of the type of retail present in local commercial districts and communities after the entry of Walmart.

Probably more independent stores selling "useful" goods--selling stuff people use (food, hardware, pharmacy, etc.) close and the independents that remain open sell stuff people don't really need--beads, gifts, etc.--or used goods like clothing.

Also see the past blog entry "Lessons from Walmart's foray into Washington, DC."

Coalition to End Needless Tax Subsidies (CENTS) Press Release

(While I am not inalterably opposed to tax incentive programs for business, I believe that communities need to be very judicious about what they spend money on in terms of whether it truly contributes in a significant fashion to the local economy in terms of income, sales, and property taxes, and an increase in the number of residents in the city. Given that resources, even in the best of times, are always scarce, the point of incentives should be not a straight up subsidy but an investment that generates a greater than a $1 return for each $1 spent. Ideally, such investments generate far more than $1 in return for each dollar spent.)

DC Small Businesses Oppose $25 Million Plan to Lure Northrop Grumman
Residents, taxpayers and peace groups agree that tax dollars should not subsidize huge weapons manufacturer

When: 9:30am, Monday, March 8

Who: CENTS—Coalition to End Needless Tax Subsidies

Where: Wilson Building, 1350 Pennsylvania Ave, NW, Washington DC

What: Press conference re Northrop Grumman Coming to DC, then join us in testifying before the Committee on Finance and Revenue at 10:00AM in room 120 of the Wilson Building.

While the District of Columbia is facing a budget shortfall of hundreds of millions of dollars and cutting essential services, the DC Council is offering $25 million in tax abatements and grants to lure defense contractor Northrop Grumman to the district. This is part of a bidding war between DC, Virginia and Maryland, a bidding war that Washington Post business writer Steven Pearlstein called "loony."

Small business owners are incensed that scarce tax dollars are being offered to a Fortune 100 company with $34 billion in revenue. "Small businesses, the engine of our city's economy, are struggling to pay their taxes and secure loans—and many are going out of business," says Busboys and Poets owner Andy Shallal, who employs 250 people—most of whom are district residents. "The city should be giving priority to small businesses, not to huge corporations that don't need the help."

The corporate giveaway—championed by Councilmember Jack Evans and Mayor Fenty—does not come with any analysis of the benefits for the city, nor any comparison of what the funds invested elsewhere could generate. "With unemployment at crisis levels of over 12 percent citywide, the city needs jobs," says Trisha Clauson, director of Think Local First DC, which represents 160 DC small and local businesses. "It is small businesses that can generate more jobs and support a locally-driven economy where money stays in the community."

Opposition to the project is also coming from the city's peace community, who see Northrop Grumman as a major war profiteer. "Northrop Grumman wants to be closer to the nation's lawmakers so it can lobby for more war funds," said Medea Benjamin with CODEPINK: Women for Peace. "The district, whose residents are overwhelmingly pro-peace, should not be subsidizing a huge defense contractor that profits from war. That's why we're building a broad-based coalition to oppose this plan."

Charlie Cray of the Center for Corporate Policy adds that Northrop Grumman has not been a good steward of public funds. "It has had to pay hundreds of millions in fines for overbilling the government and knowingly using defective parts," said Cray. "It would be scandalous to give DC tax dollars to a company with such a long record of waste, fraud and abuse."

Contact:
Pete Tucker 202 365 6118

How Montgomery County is dissing Baltimore on state historic tax credits

Baltimore City is one of the oldest major cities in the U.S. and as a (still) major port and onetime hotbed of manufacturing, it has both many old buildings and many large buildings. Large buildings and manufacturing complexes are perfect opportunities for what is called adaptive reuse. And it is adaptive reuse of old large buildings that is one of the only dependable and sustainable strategies for urban revitalization.

Particularly good resources on this subject are the books by Roberta Gratz, Cities Back from the Edge: New Life for Downtown and The Living City: How America's Cities Are Being Revitalized by Thinking Small in a Big Way and Changing Places: Rebuilding Community in the Age of Sprawl, co-authored by President of the National Trust for Historic Preservation, Richard Moe.

Because Baltimore City is one of the oldest major cities in the U.S. and because for more than 100 years it was the State of Maryland's major center for manufacturing, it has more old buildings and more large old buildings than any other jurisdiction in the State of Maryland.

So of course, Baltimore City will benefit "disproportionately" from the state historic tax credit program, simply on a basis of the inventory of possible projects.

According to this editorial from the Baltimore Sun, "Credits that work," I guess that doesn't sit too well with the Maryland House of Representatives chair of the Ways and Means Committee, Sheila Hixon, a representative from Montgomery County.

From the editorial:

What do you call an economic stimulus program that produces an $8.53 return on every dollar invested? A smashing success? The envy of the White House? The greatest idea government's had since the income tax refund? In Annapolis, they use quite a different title: Endangered. ...

Baltimore is not the only community to benefit from this economic revitalization engine - small towns from the Eastern Shore to Western Maryland have, too - but the city has clearly benefited the most. There are simply more opportunities to renovate historic (and undervalued) buildings in Baltimore than anywhere else in the state.

But even that fact works to Maryland's advantage. With some of the highest concentrations of poverty in the state, the city is also the ideal target for such investment. A report produced earlier this year by the Abell Foundation found that for every $1 million in tax credits, 72.5 jobs are created.

Yet over its 13-year history, the tax credit program has been treated like an unwanted stepchild by the state legislature. It's been capped and cut and tied up in red tape in order to reduce its cost and funnel more of the benefits to other jurisdictions. ...

Much of the opposition can be traced to one person, House Ways and Means Chairwoman Sheila E. Hixson, who hails from Montgomery County, a subdivision with far fewer historic rehabilitation projects than the city. Delegate Hixson might be convinced to extend the program beyond its 2010 expiration - but no doubt only in its current form. Gov. Martin O'Malley has sought to upgrade the program to add resources and reduce its waiting period (often of a year or more), but a measure to do so died late in the last legislative session.

Such a stand-off could stop the Baltimore economic renaissance in its tracks. As it is, a project like Tide Point could no longer qualify for the $17.7 million tax credit it actually received nearly a decade ago because the program has been scaled back so much. (It's down to a total of just $5 million for commercial projects during the current fiscal year).

Enough is enough. The state's budget crisis can't be used as an excuse not to renew the heritage tax credit program. The economic recession is proof of how much it's needed: Cutbacks to the program over the years have likely cost the city hundreds, if not thousands, of jobs.

Putting Baltimoreans back to work doesn't add to the state's long-term budget woes, it helps reduce them. More jobs not only means more people paying taxes, it results in fewer dollars needed in safety net programs.

If there's ever been a more successful economic development program undertaken in Maryland, we haven't seen it. That lawmakers would even consider abandoning a relatively modest tax credit that's spurred so much historic preservation and job-creation is stupefying even by State House standards.

This is one of the advantages that DC has in not being part of a state, it doesn't have to deal with the kind of horse trading, regional cheerleading, and other obstructions that come from intra-state competition. Although DC manages to mess things up in other ways, and intra-city competition and balancing spending amongst the eight wards of the city means that government funding gets wasted within in the city just as much as in other jurisdictions...

You'd think that it would be the policy of all the jurisdictions in Maryland to want Baltimore City to be economically healthy, rather than an economic drag on the rest of the state. (This comes from sprawl and the fact that the city is the place of residence for a significant plurality of the state's highest poverty households.)

I bet this is being held as a horse trade for the reduction of the income tax rate for millionaires, since Montgomery County has a plurality of the state's highest income households, and because it is alleged that the increase in the tax rate for the highest income households has led to some of those people moving out of state. (At present there is no data to show this is the case. It's all speculation.) See "Md. lost nearly 30% of millionaires last year" from the Sun.

Tide Point is one of the premier adaptive reuse projects in Baltimore, done by a company, Streuver Bros. Eccles & Rouse, that does spectacular work, but these days is in financial exigency, losing projects as a result of the real estate crash and the difficulty of landing new loans. Image by David Muse Photography.

I think I just figured out how to fix the DC Public Schools

The entry below was inspired by an email thread on the concerned4dcps yahoogroup (more and more I am struck by how important it is to have the right economic incentives, even though I am really bad with math and graphs, and tanked in economics...)
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I was told by someone that principals, in public meetings with other principals and parents, won't fess up to not having resources (including people resources) when the chancellor says "you have X, don't you?", because they don't believe that "telling truth to power" is what's sought by the question, and they fear for their jobs--given the arbitrary and capricious decisionmaking we seem to be witnessing thus far, that seems like a sound course of action to me (although I myself am not very good at denying the truth, but at least I am not a DCPS principal).

Since Harry mentions pay and Sarah Palin, it's reasonable to suggest that one way to correct these problems would be to weight a good portion of the Chancellor's salary on student retention (not to mention teacher and principal retention).

The DC Schools Chancellor gets paid far more "per capita" than most school superintendents in the U.S. and in the region. I.e., MontCo, Fairfax, and PG County schools all have about triple or more enrollment compared to DC. DC's school system is very small. Even including the enrollment of the charter schools, it's about 1/2 the size of the larger school districts in the region.

If you want to get the school system committed to student retention vis-a-vis the charter schools, I suggest weighting up to 1/2 of the chancellor's salary on student retention and enrollment increases/targets.

Taking a page from the NCLB (No Child Left Behind) metrics, weight this in terms of overall student enrollment, by elementary, middle-junior high, and senior high school tranches, and by individual school.

Similarly, principals should have salary bonuses based on maintenance and increase of student enrollments, but on a smaller portion of regular salary (say 25%?) compared to the Chancellor.

So whether or not they are getting the right resources, this would begin to focus the public school system on competing with the charter schools for students.

Given the what, 7,000 student drop in attendance from last year to this year, that means a hefty decrease in salary to my way of thinking. (I know you have to guard against fudging the data, because that would be the new incentive given the link to salary.)

Right now, one of the two major "promises" of charter schools, that their existence would generate a competitive and marketing orientation on the part of the traditional public schools, has never been realized (the other is choice and better schooling options for children with otherwise limited options).

That's because all the incentives right now favor charter schools. And there are no real penalties to the DCPS, other than school closure, which granted, sucks for the people whose schools are closed, but not for the people who manage to keep their jobs and schools open.

(We can argue about the two tier salary system for teachers as proposed by Rhee. But I don't think her proposal addresses what's really needed in the face of the fundamental lack of [1] quality curricular systems; [2] quality teaching processes; [3] management and support systems for principals; [4] professional development systems for teachers and principals; [5] adequate support systems and provision of additional resources as needed for students of special needs--be they physically disabled or having other skill or resource deficits; [6] adequate support and development systems for parents and families--something that many school systems don't need to do, but seem to be necessary in urban school systems with either or both ESL students and families or a high proportion of lower income students and families.)

This isn't Wall Street, where poor performance gets big bonuses, and stellar performance gets stellar bonuses. I would say a 10%+ drop in enrollment merits a minimum 25% salary decrease... I tell you if Chancellor Rhee's income dropped that much this year, she'd start changing how she does things, and really focus on enrollment-based outcomes.

Match that with student achievement outcomes, and now you're talking.

So I'd do a base salary of maybe $125,000, and then 1/3 ($125,000) on achievement outcomes, and 1/3 ($125,000) on enrollment outcomes.

I think that would have a lot more impact than spending money paying middle school students... And it would be cheaper too. (Although I do think there should be a cooperative education option for high school students on an opt-in basis. Students would go to school year round, maybe on 50% time, and spend the other 50% in payroll-job-subject learning-career oriented internships.)

I'd be happy to sell this as a counter-plan to the Washington Teachers Union, which doesn't seem to have managed to come up with a counter-plan yet.