Will a $1B Investment Resuscitate Rural Hospitals, Doctors?
By - Imagine only one healthcare provider serving an entire state. Such a concept is a stunning concrete fact. Critical Access Hospitals (CAHs) depending on location, such as the smallest state of Rhode Island, may have only 10 or fewer patients within a single facility. Such CAHs naturally may be the only ones around, confirm Leila Samy, Rural Health IT Coordinator, Meghan Gabriel, PhD, Economist, and Jennifer King, Chief of Research and Evaluation (Samy, et al). Although Rhode Island’s size is tiny, the concept of one healthcare provider for a given area reverberates, even across the nation’s largest states, as more CAHs close their doors due to financial strain.
The dramatic effects of Medicare cuts and regulatory burden
Those CAHs located within geographically isolated and economically disadvantaged communities struggle the most financially. As RevCycleIntelligence.com recently reported, rural hospitals now face sizable Medicare reimbursement cuts due to additional regulatory burden. The combination of legislative hindrance combined with Medicare’s 2 percent annual spending cut under the 2011 Budget Control Act is essentially advancing the death of CAHs, says Blaine Miller, Administrator of Republic County Hospital. Miller’s hospital substantially chopped staffing prior to a surge in federal payment slashes. His hospital lost $900,000 over the course of three consecutive years. Now his 38-bed facility is in danger of closing.
Financial, technological, and ACO actions are underway
CAHs are adopting progressive health IT and Electronic Health Records (EHRs) to keep their doors open. A primary challenge of health IT adoption for CAHs involves financing, explain Samy, et al. CAHs that pool resources with other hospitals are more likely to implement EHR capabilities tied to health information exchange and care coordination compared to those that fail to do so, say Samy, et al.
Extensive financial efforts are ongoing. For starters, a $1 billion investment from the Department of Health and Human Services (HHS) and the US Department of Agriculture (USDA) aims to address needed financial support for rural physicians and rural hospitals. This $1 billion investment may save rural hospitals and physicians in operation with other efforts to strengthen access to care for beneficiaries. But other healthcare experts say large funding efforts may do little to nothing, says research from HHS, which confirms patients can easily be transported farther away for a fraction of the cost.
Additionally, public-private collaborative funding initiative from the Office of the National Coordinator (ONC) and the USDA generated $32 million in funding for CAHs and rural hospitals across four states, confirm Samy, et al. Eleven other states – Iowa, Kansas, Texas, Illinois, Mississippi, Georgia, Michigan, Minesota, Tennessee, Montana, and Missouri – have followed by enacting similar efforts.
CAHs are also actively embracing Accountable Care Organizations (ACOs). According to Lynn Bar, Consortium Chief Transformation Office and Rural Healthcare Thought Leader, in an earlier RevCycleIntelligence.com interview, when ACOs were initial created, rural hospitals did not communicate with each other. Likewise, referral arrangements were not implemented.
Barr additionally adds enacting change within CAHs has dire advantages. For instance, it is easy to get a smaller group of people together to enact immediate change. Such efforts may be personal investments in disguise. A small patient population means beneficiaries will often be easily recognizable by name, face, or personal hobby instead of by mere numbers on an insurance card.
Similarly, as Samy, et al, confirm, pooling resources is a solid priority CAHs need to embrace to stay afloat long term.
Other factors play a part in hospitals sinking deeper into the point of no return, according to California Healthline. Rural hospitals may continue to close due to states’ decisions to not expand Medicaid eligibility under the Affordable Care Act. Medicare reimbursement rates may continue to drop. Risk-based payment models may not be openly adapted.
“It’s feast or famine,” says Brock Slabach, Senior Vice President for Member Services at the National Rural Health Association in The New York Times. “What these providers do is offer not only access to health care, which is hugely important, but they contribute to the economic viability of these rural areas,” he adds.
Will rural healthcare providers, payers, and physicians be forced to transport their professional lives within the hustle and bustle of big cities? The merging of money – and minds – is key to successful revenue cycle management initiatives for CAHs.
