What Can Urban Areas Learn from Rural Hospitals?

My father, who is now retired, chose to spend most of his long career as a certified registered nurse anesthetist working in smaller, rural hospitals because he preferred a small-town quality of life as well as being a part of a close-knit clinical team serving patients at a local community level.

Like many other rural healthcare professionals, he is acutely aware of the challenges—social, economic and cultural—that rural communities face that directly impacts the quality of healthcare and the health outcomes for people in those communities. In fact, at least one small hospital where my father previously worked, a medical center in Wharton, Texas, outside of Houston, closed its doors just last year. That 159-bed facility had, at one time, served as a regional hospital and a healthcare hub for the surrounding community.

Hospital closings are just one challenge that rural communities face even as the disparity in health status between rural and urban Americans continues to grow. Recent data from the Centers for Disease Control and Prevention (CDC) indicates rural Americans are more likely to die from the five leading causes of death—heart disease, cancer, unintentional injuries, chronic lower respiratory disease, and stroke—than residents in urban regions and that a greater percentage of rural deaths may be preventable.

During a recent webinar presented by the Commonwealth Fund, several rural healthcare leaders offered a more hopeful outlook for the future of rural health within the larger picture of the transformation of healthcare to value-based care. Titled “Banding Together for Population Health: New Business Model for Rural Hospitals,” the webinar first focused on the significant challenges facing rural healthcare—a higher percentage of elderly patients, a higher concentration of uninsured patients, as well as a higher poverty rate. Rural populations have less access to care with 39.8 physicians per 100,000 people compared to 53.5 physicians per 100,000 people in urban areas.

Looking at health status and behaviors, there is a higher percentage of smokers in rural areas as well as a higher prevalence of diabetes and coronary heart disease. The suicide rate among young men is also significantly higher in rural communities.

“Rural America presents a unique healthcare delivery environment—we have elderly populations, a sicker population, and a higher concentration with those at lower incomes, yet it seems that we have the fewest options available when it comes to seeking care. It’s a perfect storm,” Brock Slabach, senior vice president, member services at the National Rural Health Association, said during the webinar.

While this paints a dire picture, what was fascinating to me, and what the webinar really zeroed in on, was that despite these challenges, there are a number of rural healthcare systems that have become incubators for health system innovation. The webinar focused on how accountable care contracts and other value-based payment approaches can strengthen rural hospitals and enable them to innovate.

Slabach noted during the webinar, “Despite challenges, rural communities have begun to innovate, adopting the use of alternative payment models, and initiating delivery system reforms that help to address many long-standing issues that have plagued rural America: the workforce shortages, hospital closures, and a daunting reimbursement challenge for services that impact every rural provider of care.” With regard to alternative payment models and population health, he added, “Rural can lead in this effort; we have small, nimble facilities, with communities that are eager to rally behind change, and with the right leadership and technical assistance, we can be the leaders in this movement, showing urban areas how this movement can really make a difference in not only improving the quality of care but improving the population’s health.”

The National Rural Accountable Care Consortium (NRACC) is supporting rural health systems and hospitals in their journey toward accountable care. The first National Rural ACO was formed in 2013, and today the network organizes 6,000 providers in 164 hospitals in 23 Medicare Shared Savings Program (MSSP) ACOs [as part of the Centers for Medicare & Medicaid Services (CMS) MSSP ACO program], according to Lynn Barr, CEO and founder of Caravan Health and chief transformation officer at NRACC, who was also a speaker during the webinar.

“We’re in the process of signing up our 2018 cohort and are going to about double the number of rural hospitals, as we think 17.5 percent of rural hospitals are going to be in ACO programs next year, which I think is tremendous,” Barr said. “It’s been a very exciting process. In 2015, only 6 percent of our Medicare beneficiaries received annual wellness visits. In 2016, 24 percent of our Medicare beneficiaries received annual wellness visits. That’s the kind of change that really makes a difference.”

She added, “We’ve seen that every one of our sites have begun bending the cost curve—two-thirds have lower costs than the prior year, and one-third appear to be prepared for shared savings.”

During the webinar, two CEOs at rural hospitals, including a critical access hospital, shared their organizations' journeys into accountable care contracts and value-based payment approaches to improve care and population health.

Tim Putnam, CEO of Batesville, Ind.-based Margaret Mary Health, a 25-bed critical access hospital, said his hospital was in the original National Rural ACO in 2014 and that opportunity provided a pathway into population health. “Our board of directors and leadership team, in that 2013 time frame, really felt that the volume to value transition was the future of healthcare delivery. There’s no way with things like chronic care management that we cannot continue to go down the volume treadmill and be successful. So how do we move into that? We were very frustrated. We felt that from insurers and CMS, we were left out, because you had to have 5,000 lives to be a part of it,” Putnam said.

One of the valuable aspects of participating in the ACO is having access to Medicare data about beneficiaries served at the hospital, he said. “Before we got the data, we were really guessing, ‘What’s going on with this patients?’ How, with the Medicare data we can look at the patients and see where do we have the ability to improve cost of care and improve their lives.”

Putnam said one key learning from the journey so far is that what improves care is not medical; “it’s things like transportation, social services, behavioral health services, reducing a fall risk.” The hospital has been able to work with community partners to provide those services, he said. He continued, “And this fits to what we do well, and the fact that small communities can have a positive impact on the population. It’s a lot different than a large metropolitan environment, where they talk about population health, but they only have a small fraction of the population. In small communities, we have the population, so I think that has allowed us to be impactful.”

Lee McCall, CEO of Neshoba Hospital and Nursing Home in Philadelphia, Mississippi, discussed the impact of his health system’s 2016 MSSP participation as part of the Magnolia-Evergreen ACO, which consists of seven rural hospitals in Washington and Mississippi. Neshoba Hospital is a rural Prospective Payment System (PPS) hospital servicing a population of 28,000. McCall said by collaborating with other providers in the Magnolia-Evergreen ACO, the hospital was able get to a high level attribution that was needed for the Medicare population for the MSSP ACO program.

“What [participating in the ACO] provided to us was an opportunity to impact the health of our community, learn the new ways to practice in the value-based world to improve performance and remain independent. Without this program, we were looking at other opportunities, and certainly remaining independent was very important to us,” McCall said.

Through the ACO, the hospital has been able to effectively build its care coordination program and focus on population health. “We were able to gain access to data, as close as you can get to real-time data, to start making decisions and to really determine what was going on with the patients we were serving. Where were they going to get their care? What are the determinants of the high cost of care they had received? We could gain access to that information and start talking with them about better coordination of that care.”

What’s more, physician leaders were able to focus on process and clinical quality improvement. “By getting involved in this, it’s allowed that opportunity for us to drive quality and measure that quality and monitor it as we move along.”

McCall also shared projected 2016 financial performance figures for the ACO: for the seven rural hospitals, local hospital revenue went up 7 percent while seeing cost savings of 8.4 percent per Medicare beneficiary. Also, net patient revenue went up $30 million while saving Medicare $11 million, and inpatient revenue increased $13 million while saving Medicare $7 million, he said.

“That has been a great opportunity for us to get involved, to take control of our destiny and not be a passenger in the bus. I think from a rural collaborative approach, we have seen benefits in our community and its given us the ability to take charge and really transform the way we practice and effect the populations that we serve,” he said.

Despite all the challenges rural hospitals face, the strategies these two hospitals have employed to introduce new care models could provide a path forward for other rural healthcare providers, and for urban ones as well.