Why some rural hospitals may be left out of reform
Rural hospitals confront the challenges of establishing ACOs and medical homes with limited resources and thinner margins
It might be from the experience of navigating rough terrain. It also could be from the ability to withstand extreme weather. Or perhaps it’s just from the thinner air. Something has given officials for a nascent rural telehealth network in and around the mountains of California the courage to consider taking on one of the most difficult tasks being asked of providers by the healthcare reform law: creating an accountable care organization.
While it’s only one of many options available, officials for the Southern Sierra Telehealth Network are taking a look at how the network might serve as a template for an ACO, the quality and reimbursement organization model promoted by the Patient Protection and Affordable Care Act.
“We’re looking at how we can do it, how we can fit into the guidelines, if it can even work,” says Lee Barron, CEO, chief financial officer and administrator of Southern Inyo Healthcare Dis- trict, Lone Pine, Calif., one of six rural healthcare organizations participating in the Southern Sierra network.
The rural telehealth network is just getting off the ground by filing for not-for-profit tax status, Barron says, but the six hospitals that connect electronically to four academic urban hospitals are already looking at the next step.
“We’re looking at more grant funding to develop the network further,” says Barron, whose service area includes the highest point in the Lower 48, Mount Whitney, as well as the lowest point in North America, in Death Valley. They are considering such moves as creating an ACO, a health information exchange or a medical home. Regarding a medical home, she says “it’s something we already kind of do. I can see the efficiencies in that.”
Members of the Southern Sierra network are only a few of the many rural providers watching what is happening with the implementation of the Affordable Care Act and wondering where and how they might fit into the nation’s healthcare system as it changes under the law.
The law’s numerous provisions and subsequent rulemaking from HHS and its divisions don’t include a lot of direct references to rural providers, but the major provisions have the potential to affect them directly or indirectly. In addition, the goals of the law parallel what rural hospitals are already trying to do, experts say.
“The bill is a mixture of trying to save money and trying to improve care,” says Todd Linden, president and CEO of 49-bed Grinnell (Iowa) Regional Medical Center. “I think rural hospitals are in a position to benefit from that,” he says. Rural providers already offer high-quality care, Linden adds.
Still, rural providers deal in much lower volumes, making such things as ACO qualityrating processes potentially suspect. Linden asks whether the quality data for rural hospitals will produce statistically valid data.
Another of the overriding concerns is the added cost of implementing healthcare reform, as rural providers often run on thinner margins than do urban hospitals and may rely more on the lower reimbursement rates under Medicaid.
“The intent of health reform is perfect for rural healthcare,” says Thomas Miller, assistant professor in the School of Rural Public Health at Texas A&M Health Science Center, College
Southern Inyo’s parent organization is part of a network wondering if it has what it takes to form an ACO.