Rural hospitals need flexible policies to survive, report says
- Providing healthcare in rural communities involves unique challenges not seen in other areas of the country, but health policy often neglects that distinction, a new report by the Bipartisan Policy Center and the Center for Outcomes Research and Education finds.
- The report is based on discussions with more than 90 thought leaders and stakeholders about the state of rural healthcare in seven upper midwest states: Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota and Wyoming. Together, they comprise just 4% of the U.S. population, but one-quarter of all critical access hospitals (CAH).
- Among the themes that emerged was the need for opportunities that let rural communities define their own needs and service sets. This could result in transforming some hospitals from small inpatient care centers to new models like rural emergency centers.
Shrinking reimbursements and declines in inpatient admissions have taken a toll on rural hospitals in recent years. Since 2010, 80 rural hospitals have closed and 573 are at risk of closing — 210 of them at “extreme risk,” according to iVantage Health Analytics.
Adding to their worries, President Donald Trump’s fiscal year 2018 budget proposal would cut $627 billion from Medicaid over a decade — a potentially fatal blow for rural hospitals serving largely low-income populations.
Trump and Republicans in Congress have also threatened to eliminate Medicaid expansion programs authorized under the Affordable Care Act. Doing so without raising disproportionate share hospital payments or other subsidies would force more hospitals to close, especially in rural areas, according to a recent report in Health Affairs.
But the diversity of rural communities — where populations tend to have higher rates of obesity, diabetes and certain other chronic conditions — defies a one-size-fits-all approach to fixing rural hospitals’ problems.
“Having the ability to adjust the CAH model to fit the needs of individual communities was frequently brought up in interviews; for example, some communities need the local hospital to have inpatient beds, while others do not,” the BPC/CORE report says. Tweaking service sets can improve efficiency while still meeting local health needs.
Other key themes from the report:
- Policymakers need to create funding mechanisms that reflect the realities of rural communities.
- Rural health systems need to optimize the use of nurse practitioners and physician assistants practicing at the top of their license to fill gaps in primary care in their community.
- Clinicians in rural areas need innovative tools, such as telemedicine, that expand patient access and provide professional support.
The report comes as CMS is expanding its Rural Community Hospital Demonstration from 17 to 30 hospitals. The pilot reimburses hospitals for the actual cost of inpatient services rather than the standard Medicare rates, which could be as little as 80% of actual costs. Participating hospitals have said the demonstration allows them to maintain services that otherwise would be scaled back or cut altogether.
Some rural hospitals and health systems are partnering to share costs and resources, while gaining economies of scale and bargaining power. “We can’t afford a data analyst, but five hospitals together can afford and share a data analyst,” Leslie March, CEO of Lexington Regional Medical Center in Nebraska, recently told Healthcare Dive.
- Bipartisan Policy Center Reinventing Rural Health Care: A Case Study of Seven Upper Midwest States