AMP News Arkansas Hospitals Association

Confronting Uncertainty: Health Reform and Rural Providers

by Michael Topchik, national leader, the Chartis Center for Rural Health

The uncertainty surrounding the future of the ACA/AHCA will likely continue to be unsettling for rural providers – especially when the potential for changes in legislation threatens financial viability and stability.

The repeal and replacement of the ACA/AHCA continues to be wrangled in Washington and in town halls across the country. Key elements of this proposed legislation would impact rural providers either directly or indirectly, including:

  • Reversal of ACA’s cuts in federal disproportionate share hospital (DSH) Medicaid payments;
  • An increase in the uninsured; and
  • Rolling back Medicaid expansion and adding potential long-term funding constraints through Medicaid restructuring.

The uncertainty surrounding the future of the ACA/AHCA will likely continue to be unsettling for rural providers – especially when the potential for changes in legislation threatens financial viability and stability. The Chartis Center for Rural Health (CCRH) and iVantage Health Analytics have taken a close look at the rural health safety net and the impact of the potential policy changes on rural providers – and their communities. Earlier this year, we published the Rural Relevance Study to offer a unique lens into the state of rural health care, the value the safety net provides and the opportunities for the future.

As part of the 2017 study, CCRH explored the intersection of rural provider performance and the socioeconomic challenges and health disparities faced by rural communities. Our population health assessment measures the health status of rural populations by evaluating health outcomes, quality of care, access to care, health behaviors, and social, economic, and environmental determinants of health.

Using nearly 70 metrics, the CCRH quantified the health status of each rural provider’s community.

Comparison of Population Health in Rural and Non-Rural Hospital Communities

Our research validates the hypothesis that rural health care providers serve populations which are not only socioeconomically disadvantaged but also suffer from numerous health disparities and poorer outcomes than non-rural communities.

The closure of 80 rural hospitals across the country since 2010 underscores the challenges faced by rural providers, and research indicates that many more are struggling to stay open. This is an indication that the rural health safety net continues to unravel, putting the mission to care for rural populations in jeopardy in a number of states. In fact, forty-one percent of U.S. rural hospitals operate at a negative margin. Taking a closer look at the rural landscape here in Arkansas provides valuable information about the current fragility of our rural providers.

Current Fragility of our Rural Providers

In addition to the current market forces that affect rural health operating margins, there are a number of policy changes already impacting the financial health of rural providers and a few which remain in question given the new administration in Washington. Across rural health care, the average payer mix of rural providers shows that 61% comes from government, compared with 45% for non-rural providers. Medicare payments to rural hospitals and physicians are dramatically less than those to their urban counterparts for equivalent services.

Thus, study findings suggest that policies such as sequestration, bad debt cuts, potential changes in Critical Access Hospital reimbursements, and rural PPS Coding Offset will not only negatively impact rural hospital revenues, but may have broader consequences for rural populations.

Here in Arkansas, the impact of these potential legislative policies on rural providers and their communities would be significant.

In summary, the rural health safety net across the country serves a population that is older, poorer and sicker with less access to care than their non-rural counterparts. This population has a higher proportional demand for health care given baseline health disparities. The rural health safety net is anchored by rural hospitals that offer critical access to quality care. Through federal and state polices and rural-relevant reimbursements, this safety net has been designed to provide access to populations which are geographically dispersed and often underserved. Yet this safety net continues to be threatened by potential policy changes at both state and federal levels.

Against this context, rural providers here in Arkansas and across the country should act now to prepare for changes ahead. Developing a comprehensive understanding of an organization’s current performance, position and exposure is critical, as is aligning leadership around the most likely scenarios ahead. As has been the case for the last six years, the Rural Relevance Study offers a snapshot into the state of rural health care, the value the safety net provides and the challenges and opportunities for the future.

To download a copy of the study, visit http://www.ivantageindex.com/2017-rural-relevance-study.

And to learn more about how your hospital is performing, with a customized performance snapshot, please contact us at inquiry@ivantagehealth.com.

iVantage Health Analytics and the Chartis Center for Rural Health (CCRH) are part of the Chartis Group. Access to their services is offered through an endorsement agreement with AHA Services, Inc. The CCRH offers knowledge and expertise, performance management solutions, research and education to help rural providers improve health care delivery in their communities. For more information, contact Tina Creel at 501.224.7878 or tcreel@arkhospitals.org.

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AMP Staff

AMP Staff

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