Federal cuts, financial instability and competition leave many rural hospitals fearing the future

Many rural hospitals could be forced to close because of cuts to the Critical Access Program and the fact that, according to the National Rural Health Association, , 41 percent of critical-care hospitals are losing money, reports Jenny Gold of Kaiser Health News. This would be devastating to many rural communities, with a great impact felt by low-income and elderly residents. "A small hospital is often one of the biggest employers in a rural town, and closures 'can have an outsized economic impact,'" Eric Zimmerman, a health care lawyer and Washington lobbyist, told Gold.

More than 1,300 U.S. hospitals and nearly one in four acute-care facilities are designated as "critical access," giving them slightly higher Medicare and Medicaid reimbursements in return for limits on care they can provide. Many such hospitals like Hood Memorial, about an hour outside New Orleans, are dealing with uninsured patients, inability to collect payments from patients, and fewer funds from federal and state agencies, Gold reports. Many of these hospitals "tend to provide lower quality care" and are "less financially efficient than other facilities, according to a 2010 study published in the Journal of Health Politics, Policy and Law. Hood, for example, had $700,000 in losses last year despite the higher reimbursements. "It's a lot of variables, and all of them right now are working against us," CEO Hoppie Jones told Gold.

To prevent closures of rural hospitals and ensure "Americans in in isolated areas would still have access to health care," the federal government started the critical access program in 1997. To qualify, hospitals had to have 25 or fewer beds and be at least 35 miles away from another facility. However, states could waive the distance requirement, and many did, leaving hospitals like Hood with at least four other competing hospitals "within a 26 mile radius," Gold reports.

Funds available for critical-access hospitals, rural health-care providers through new federal program

Critical-access hospitals, physician-owned organizations and rural health-care providers are now eligible for federal funds that will help them implement necessary infrastructure and information-technology systems, the U.S. Department of Health and Human Services announced last week. The goal of the program, called the Advanced Payment Model, is to encourage participation in accountable care, one of the cornerstones of the health-care reform law.

Eligible participants must be either accountable care organizations "that do not include any inpatients facilities and have less than $50 million in total annual revenue," or ACOs in which inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals and have less than $80 million in annual revenue, reports Karen Cheung in Fierce Healthcare.

An accountable care organization is a network of physicians and hospitals that share the responsibility to care for a group of patients. The organization's payment is tied to achieving health-care quality goals and outcomes. While ACOs are being heavily promoted in the new health care system, they were recently likened to "unicorns" because "no one has ever seen one," said William Hazel, Virginia secretary for Health and Human Resources, at the 2011 Howard L. Bost Memorial Health Policy Forum in Somerset. (Read more)

Americans having to travel farther to get trauma treatment as hospitals close

Millions of Americans are farther away from trauma care than they were 20 years ago, with some having to travel more than 30 minutes to get treatment. Experts say getting help within the first hour is crucial.

A study published in the journal Health Affairs found the distance to a trauma center "increased for 69 million people between 2001 and 2007," reports the Daily Yonder, the national online rural journal. The average amount of travel time was 10 minutes. But for 16 million people, the amount of time it took to travel to a trauma center increased by 30 minutes or more.

"The greatest impact from diminished access has been on people in rural communities," as well areas with a high percentage of African-American residents, low-income people and those without health insurance, The Associated Press reported.

Though U.S. Census numbers show cities growing in population while rural areas decline, Kentucky is still considered a largely rural state (see right), ranking 23rd in the country for population density.

The reason for the increased travel times is due to facilities closing. In 1990, there were 1,125 trauma centers in the country. By 2005, nearly 340 of them had closed, in most cases because of financial hardship; they were treating too high a percentage of people who do not have insurance, Daily Yonder reports.

President Obama's recent call to cut Medicare premiums to critical access hospitals, as well as close CAHs that are within 10 miles of each other, would further burden rural areas, said a panel of experts in Lexington Wednesday.

Medical experts say a trauma patient has the highest change at survival if treated within the first hour. "We're not saying that we should build a trauma center on every street corner," said Dr. Renee Hsia, lead researcher on the study. "But we do have evidence that access for certain populations is already pretty bad, and it's getting worse." (Read more)

Natl. Rural Health Assn. president, at UK, says rural health cuts won't save money or help communities but will eliminate jobs

Speaking about President Obama's proposed cuts to rural health care Wednesday, Susan Starling was frank about her feelings: "As a CEO of a critical access hospital, I'm very nervous. What do I need to do as a hospital administrator?" she asked Alan Morgan, chief executive officer of the National Rural Health Association.

"If at all possible, invite your legislator into your facility," Morgan replied. "When they see what you're doing for your community, that's what will turn the tide on this."

The conversation was part of the Healthcare Spotlight Series at University of Kentucky Albert B. Chandler Hospital in Lexington and put on by The Health Enterprises Network in partnership with Hall Render. Morgan was the keynote speaker and Starling, CEO of Marcum & Wallace Memorial Hospital in Irvine, moderated the subsequent discussion. They spoke at length about President's Obama's recent call to reduce reimbursement payments for critical-access hospitals as well as eliminate the CAH designation for those within 10 miles of another hospital.

Morgan, whose association has 21,000 members, said there has been discussion about making cuts to rural health facilities for the past year, starting when the Congressional Budget Office released its proposals for potential savings in March and proposed eliminating CAHs. "Once you put something like that on the table, it stays on the table," Morgan said. The Medicare Payment Advisory Commission followed suit, suggesting the same cuts Obama ultimately called for in September.

Morgan said the proposal runs counter to efforts to create jobs, saying closing CAHs and reducing reimbursement — which he said would force many to close — will eliminate far more jobs than it creates. "We have a hard time communicating to policymakers that if the health care system is not the largest employer in a rural community, it's second only to the school system," he said. "Health care is about the economy."

While cuts may be on the table and the health-reform law is not perfect, Morgan said, it does allocate a "tremendous amount of federal resources" to rural health, most in the form of grants and special programs. But Morgan said much remains to be decided about the law. "If someone tells you it's great, they don't know if it's great. If someone tells you it's bad, they don't know that either," he said. "They just don't know yet. Until the regulations come out on most of this we just don't know."

That being said, Morgan does not feel the act will "fix rural America" since "there is no silver bullet." But he pointed to good things about rural health, such as studies showing that rural facilities outperform their urban counterparts in primary care, safety and preventive services. "As a nation, as rural advocates, we need to be proud of what we do when it comes to quality, when it comes to innovation," he said. "What makes rural great is a strong sense of community, which allows you the ability to network . . . to try innovative approaches."

But doing that takes money, Starling and Morgan agreed. "Just by cutting, we're not changing the system," Starling said. "If we close hospitals in rural America, we're not saving money. We're shifting it to urban. It's actually spending more."

Rural hospitals to get federal help for recruiting physicians

Critical-access hospitals will get help recruiting physicians to their rural areas through an expanded loan repayment program that is part of President Obama's new jobs initiative for rural America.

The initiative is called the National Health Service Corps, Alexandra Wilson Pecci of HealthLeaders Media reports. The 1,300 critical-access hospitals can use federal loans to recruit new physicians. A press release from the White House states the addition of one primary care physician in a rural community generates about $1.5 million in annual revenue and creates 23 jobs annually.

Kentucky has 30 critical-access hospitals, which must be in rural areas, 35 miles from another hospital or 15 miles from another hospital in mountainous terrain, according to the Rural Assistance Center. The average CAH creates 107 jobs and generates $4.8 million in payroll annually, the White House says.

The jobs program also includes an agreement that will "link rural hospitals and clinicians to existing capital loan programs to help them buy health IT software and hardware and jump the typical rural hospital hurdle of limited access to capital and lower financial operating margins," HealthLeaders Media reports.

A few days before announcing the jobs program, the White House Rural Council released a report that outlined recent investments in rural healthcare access. Those include placing more than 2,600 clinicians in rural communities and providing distance learning and telemedicine services to more than 2,500 rural healthcare and educational facilities. It also highlighted an investment of 500 projects across the U.S. Department of Veterans Affairs health care system that support rural health care. That includes 404 community-based outpatient clinics and 48 outreach clinics in rural areas.

On average, rural counties had 62 primary care doctors for every 100,000 residents in 2008, compared to 79.5 primary care doctors in urban areas, the Rural Council report said. (Read more)

Defenders of small, rural hospitals take issue with study that found poor patient outcomes

A recent study that concluded small, rural "critical access hospitals" have poorer patient outcomes and lower quality of care is making waves in the medical community. A federally funded monitoring team from three universities issued a response noting certain weaknesses of the study, which was published in the Journal of the American Medical Association earlier this month.

It's not news that critical-access hospitals "have room for improvement," the team wrote. "What the JAMA authors fail to report is how much CAH scores on the process of care measures have improved over time," it writes. "Our most recent trend analysis, for example, shows that CAH scores on each of the pneumonia measures increased between 9 and 22 percentage points between 2005 and 2009."

The analysis in question was performed by researchers at the Harvard School of Public Health. It focused on nearly 1,300 critical access hospitals and looked at the outcomes of Medicare patients who have congestive heart failure, heart attacks and pneumonia. For all three conditions, CAHs performed at a lower standard. Patients at CAHs were more likely to die, and the facilities were behind in implementing electronic health records. It also found CAHs had a smaller number of specialists like cardiologists working at them than at non-CAHs. "That doesn't sound like news to us, either," said Al Cross, director of the Institiute for Rural Journalism and Community Issues.

"Issues such as the limited supply of primary care providers, home health and hospice services, rather than the supply of specialists, should be the focus of interventions to improve rural health quality," said the Flex Monitoring Team, named after its assignment, to evaluate the Medicare Rural Hospital Flexibility Grant Program. The team is made up of researchers from the University of Southern Maine, the University of Minnesota and the University of North Carolina-Chapel Hill. (Read more)

Writing for the Daily Yonder, Dr. Robert C. Bowman, family-medicine professor at the A.T. Still University School of Osteopathic Medicine in Arizona, also took issue with the study, in part because its findings ran counter to an article that was also published in JAMA last year. That article concluded that "greater proportions of underinsured, minority, and non-English-speaking patients were associated with lower quality rankings for primary-care physicians," Bowman quotes.

"Now JAMA has an article this year claiming lower quality of care in certain types of rural hospitals that are completely different in location, population, funding, and workforce," Bowman writes. "So what happened between last year, when patients made the difference in quality, and this year when it was location of the hospital? ... Why do sophisticated researchers, reviewers, and editors maximize the context of care sometimes (in 2010) and minimize it at other times (in 2011)?"

Bowman, founder of the Rural Medical Educators Group of the National Rural Health Association, took a jab at the researchers. "Do Harvard University researchers associated with hospitals with the most sources of income and the highest reimbursement rates even have the perspective to write about hospitals with the least lines of funding and the lowest reimbursement in each line?"

Though he takes issue with the article, Bowman said the topic "about high and lower quality critical access hospitals" is worthy of research. "Perhaps one of the problems with attempting such research is that there is little variation across rural hospitals. Perhaps that's because the system is designed to spend uniformly less on health care across rural America. . . . The end result is less care and less economic impact from health care in 30,000 zip codes with 65 percent of the U.S. population. And more care delivered in 3,400 zip codes in 4 percent of the land area." (Read more)