Tennessee Rural Hospital Transformation Program Generates ~$12M in Annual Improvements

Sixteen Tennessee hospitals have closed since 2012, including four in 2020 alone. To help the remaining rural hospitals turn around performance, the Tennessee Department of Economic and Community Development enacted the Rural Hospital Transformation Act in 2018 and contracted with Guidehouse to help administer the Rural Hospital Transformation Program from 2019 to 2022.

Following a thorough and methodical application and transformation plan development process, Guidehouse zeroed in on revenue generating, cost reducing, and operations improving initiatives individualized for each participating hospital.

While hospitals were primarily responsible for transformation plan implementation, Guidehouse and the state offered collective and targeted services to ensure success, including a service line playbook, “Operations Bootcamp” sessions, a Community, Outreach, Reputation Repair, and Education toolkit, and revenue cycle and clinical documentation improvement support.

“Having a nationally recognized healthcare consulting firm work with us sent the message to the community that we are serious about staying here and providing care,” said one rural hospital CEO. A hospital board member shared, “This is the best financial position our hospital has been in for 12 years.”

As a result of the collaboration, 14 hospital participants in the Tennessee Rural Hospital Program fared better than their rural peers on operating income and operating margin throughout the early phases of the COVID-19 pandemic, and most participants showed a positive directional financial outlook compared to the pre-program status quo. This contributed to 14 rural hospitals securing an estimated $8 million in revenue generation and $4 million in cost reduction, annually.

“We are no longer on the endangered species list and in good position to pay off debts in full in 2022.”

– Tennessee Hospital CEO

DOWNLOAD THE CASE STUDY

modernhealthcare.com/perspectives_Guidehouse

important for department managers to gauge their own needs and come up with creative ways to fill them. For example, some departments might have needed a clerk as opposed to a clinical staff member. But these solutions had to come from the front lines to succeed.

JACOBSON: A key partnership included expanding our relationship with (healthcare staffing platform) CareRev, which has helped us with “just-in-time” clinical needs and provided us muchneeded flexibility and local access to high-quality RNs.

We also expanded partnerships with local universities and colleges to help with future workforce pipelines, including an expanded partnership with All-In Milwaukee; an announcement of a $12 million scholarship fund; and an expansion of sponsored programs for surgical technologists, medical assistants and certified nursing assistants to develop outside and inside talent.

Although the pandemic has affected our operations, we have been able to maintain our commitment to staff compensation initiatives, including merit pay, increased base compensation for market-sensitive positions for both clinical and nonclinical roles, enhanced differential pay, fully funded retirement plans, a move to an $18-per-hour minimum wage and continued review of the market for base pay and special pay practices.

RYU: The pandemic accelerated a trend in healthcare that was already well underway. For some time now, we’ve been finding ways to address staffing challenges and to help our team members stay fresh and engaged.

We’ve also further developed and bolstered programs to grow the pipeline of talent within our communities and often within our own workforce. Our Nursing Scholars Program supports employees who are pursuing a nursing career. Our Abigail Geisinger Scholars Program supports tuition for up to 40% of each class at our medical school if they pursue specialties in primary care or psychiatry. School at Work is a program for those in entry-level roles to position them for advancement. Our MBA program partners with a local university to bring an MBA curriculum on site and make it easy to access. And our leadership development program is specifically designed to develop future leaders across all areas.

What COVID-19 policies and flexibilities do you want to become permanent?

CAMPOS: Telemedicine and expanded reimbursement for telehealth services need to continue. This is especially true in rural or isolated communities so folks can get access to quality primary care or chronic care management from the comfort of their homes. In terms of flexibility, healthcare organizations, as well as other industries, realized that flexible schedules and opportunities for staff to work from home in some cases not only maintained, but improved productivity and employee satisfaction. It also opened new ways of recruiting and retaining staff.

JACOBSON: A few examples of policies and processes that we believe are improvements that we hope remain include the COVID-19 exemption for telehealth reimbursement, an enhanced role for medical assistants, the opportunity to maintain expedited credentialing of providers with a temporary license, and insurers’ decision

“We expanded partnerships with local universities and colleges to help with future workforce pipelines.”

Catherine Jacobson

to not require a minimum three-night stay within a hospital before a patient can be transferred to a skilled-nursing facility.

Specific to Wisconsin, we hope we maintain the change to the Wisconsin Immunization Registry database and Epic practices that have allowed integration with Epic products; that Wisconsin ends the temporary moratorium on skillednursing facility expansion; and for the continuation of an improved database on inpatient census across the state.

RYU: We’ve proven during this pandemic that the system can innovate faster than anyone ever thought possible. From enabling more people to work from home to bringing more care to people outside of the hospitals and emergency departments, we must keep that forwardthinking mindset and not fall back into old habits. For us, that focus will continue to be on moving care upstream.

A couple of examples from a policy perspective include flexibilities to enable services along these lines, like telemedicine and home care. Ideally, the flexibilities that helped to catalyze innovations, whether payment or otherwise, should become incorporated as lasting improvements to the industry.

How are you trying to meet the demand for mental healthcare?

CAMPOS: This is something we’ve been struggling with for many years. COVID-19 merely magnified the need for mental health services and truly exposed the gaps in the system. One of our solutions is to meet with community-based mental health providers on a monthly basis and create processes for warm handoffs and follow-up appointments. We also have agreements for tele-psych visits for inpatients and ED patients. These telepsych services are rarely utilized but can help our providers diagnose and manage acute or crisis cases as quickly as possible. Our state hospital association is also working to develop systems for interfacility transfers of mental health patients, to alleviate the stress on local EMS.

JACOBSON: We recently announced a joint venture between Milwaukee County and three other health systems to build a new mental health emergency center. Opening in September, the facility is for children and adults experiencing a mental health crisis.

At Froedtert Hospital, our academic medical center, we are in the process of building our new complexity intervention unit, an acute-care medical unit designed and staffed to provide specialized care for patients who have both an active medical and co-morbid psychiatric condition requiring an inpatient level of medical care.

For our clinicians and staff, we’ve implemented a number of changes to support growing mental health needs, including enhanced employee assistance program services and mental health engagement, which includes establishing a successful partnership with Spring Health, physically having two EAP staffers on-site at all appropriate facilities 24/7 and redesigning underutilized nonclinical spaces for respite rooms.

RYU: We are expanding our capacity to take care of the growing needs in our community, on the inpatient side but also outpatient. One example is what we’ve done with addiction services, as we’ve grown our medication-assisted therapy sites and bolstered programs at our Geisinger Marworth Treatment

“Ideally, the flexibilities that helped to catalyze innovations, whether payment or otherwise, should become incorporated as lasting improvements to the industry.”

Dr. Jaewon Ryu

Center. Another example is our programs integrating behavioral health with primary care at many of our clinics, especially within pediatrics. All of this being said, we still have a lot of work to do to further the buildout of our comprehensive services.

What are your highest-priority policy recommendations?

CAMPOS: As a rural health hospital administrator, I’m really concerned with threats to long-standing rural hospital programs, especially Medicare’s Low Volume Adjustment. Rural hospitals often operate on negative operating margins and rely on special programs and supplemental payments to keep their doors open. The new Rural Emergency Hospital designation may help some hospitals, but it’s my experience that emergency departments are not money-makers, and a 5% increase in reimbursement for ED services will not make them profitable, nor perhaps even viable. Creative hospital design allows for nurses and other staff in rural hospitals to cover both the ED and inpatient services. Providing inpatient services for low-acuity cases that would otherwise be transferred hours away is one way to make up the costs of the ED. At least that’s the case in my community.

Ultimately, I think the country needs to decide if emergency care and inpatient care are to be provided in rural areas at all, and if so, we need to find a way to finance rural hospitals so that they aren’t just barely surviving month to month, or constantly trying to develop niche programs to supplement their revenue.

JACOBSON: Two top issues come to mind. The first is we need to continue the reimbursement model for telehealth that was amended during the early part of the pandemic. This issue will be critical to maintain the positive progress we’ve made in this space.

Second, we need our largest payer—

Medicare—to acknowledge the impact of wage inflation within the annual increase, which has not occurred within their current proposal.

RYU: We are big supporters of any policy that continues to accelerate the move to value-based care. Through so many of our clinical programs, we have seen firsthand that value-based payment models make it easier to deliver the kind of all-inclusive care that so many people can benefit from. It allows us to focus on total health, including wellness and prevention, and moving care upstream and making it as convenient as possible. By doing this, we know patients can fully realize the benefits of the Triple Aim—quality, experience and affordability.

How have new surprise billing regulations affected your organization, and what’s ahead?

CAMPOS: My organization is really small and does not contract with many specialists. The only care providers that may be impacted by the new surprise billing regulations are our tele-radiologists. However, we haven’t had any feedback regarding any out-of-network issues from the providers or from our patients, who are notified at the time of imaging that they should expect a bill directly from the radiologists.

JACOBSON: The No Surprises Act rule requires healthcare providers to issue a good-faith estimate to all uninsured and underinsured patients in writing no later than one business day after the scheduling date, if scheduled three days prior to the service, or three business days after the scheduling date, if scheduled at least 10 days prior to the service. With this in place, the number of estimates that we are required to provide has increased dramatically due to the requirement of providing estimates to all self-pay patients.

“Our questionnaires help us pinpoint ways in which we can help our patients, either by providing services ourselves or directing them to community partners that offer those services.”

Christina Campos

As an example, we have created more than 300 shoppable templates for each of our three larger hospitals and additional templates for our clinics, community hospitals and ambulatory surgery centers. We have over 1,200 templates available across the health system. This regulation requires a great deal of work to offer increased transparency and we are committed to making these tools as user-friendly as possible for our patients.

RYU: We have spent significant time and effort building online, self-service estimate tools along with systems to provide estimates to our patients. Yet, while price transparency rules might be a first step, they often fall short of providing patients with true out-ofpocket costs.

How are you addressing social determinants of health in your patient population, and what challenges are in the way of coordinating that care?

CAMPOS: One of the first steps has been updating our intake questionnaires to include safety, housing, food security, income status, literacy, etc. We already know from census data and community needs assessments that our region of the state is primarily low-income and minority-majority (primarily Hispanic), with high incidence of cancer, diabetes, obesity, chronic lower respiratory disease and suicide.

Our questionnaires help us pinpoint ways in which we can help our patients, either by providing services ourselves or directing them to community partners that offer those services. The challenge in a rural area, however, is the scarcity of services like homeless shelters or substance abuse treatment centers.

JACOBSON: We have a wide array of strategies and actions being incorporated across our network, including enacting routine standardized social determinants of health screening on all patients emphasizing asynchronous digital collection while including synchronous clinic-based collection processes; expanding social work resources dedicated to ambulatory patient engagement; and centralizing and automating processes for SDOH patient outreach by care coordinators and social workers when the need is identified through screening. In addition, we’ve enhanced our community engagement efforts with safety-net resources, FQHCs and faith-based organizations to amplify these efforts.

A few challenges include scaling data collection and consistency across all care locations, some gaps in community resources for specific needs such as transportation, and patient follow-up to incorporate action steps.

RYU: The programs range from providing fresh food and diet and nutrition coaching for food-insecure patients with diet-sensitive conditions, like diabetes and chronic kidney disease, to providing transportation for those unable to drive, to being in the home of our sickest patients where we can better identify issues. Whether building such programs ourselves or partnering with others in the community, we have seen the greatest impact when we can bring an integrated

n solution to engage patients.