Healthcare Business Trends

3 Rural Hospital Challenges and Solutions in the Brave New World of Value

May 2, 2018 3:19 pm

Some rural hospitals are driving patient volumes by developing shared-risk arrangements with large employers and payers in their regions.

More than 50 million Americans live in geographically isolated communities where rural hospitals represent the primary source of care. Low patient volumes and a high density of government-sponsored beneficiaries are characteristic of rural health. Rural patient populations tend to include disproportionate shares of poor, elderly, uninsured, and chronically ill patients, which can introduce additional challenges and expenses to care delivery. Rural hospitals require the same diagnostic and technical resources to support patient care, but typically subsist on much slimmer operating margins than their larger, urban hospital counterparts.

Scarcity of resources—including difficulty attracting clinical staff and funding electronic health record (EHR) infrastructure—can make it difficult for rural hospitals to keep overhead in line with patient revenue. In addition, high Medicare and Medicaid patient volumes make rural organizations susceptible to lower revenues. Patient leakage to neighboring markets often exacerbates the problem of narrowing revenue streams.

New Mexico’s 49-bed Artesia General Hospital is not immune to these challenges. The hospital has had to adapt to maintain success in the shift to value-based care. While many healthcare organizations are using cost-reduction strategies to deliver on healthcare’s triple aim, Artesia is also focused on strategic growth to counter potential revenue loss and advance population health across its patient community.

A Recipe for Growth in Rural Care

To better serve the needs of patients locally, some rural hospital leadership teams are working to grow the spectrum of outpatient services offered at their facilities. Artesia General Hospital executives are seeking to tie patients to community health offerings to ensure the hospital’s ability to effectively drive population health and deliver on future value-based care goals. The decision to expand service offerings was reinforced by feedback from a community health needs assessment conducted in 2016. The assessment revealed four key improvement opportunities for the rural hospital:

  • Broader patient access to physicians and specialists
  • Clinical focus on chronic disease prevention
  • Expansion of substance abuse and mental health offerings
  • Patient education on diet and healthier food options

Assessments afford rural hospitals a unique opportunity to engage and collaborate with stakeholders in the local heath community to identify and define significant health needs, issues, and concerns. Patient and community feedback helps hospitals pinpoint the best opportunities for service expansion. To justify the cost of growth, rural hospital teams must ensure that new offerings will generate adequate patient volume to produce a return on this investment. Hospitals must then address the challenge of recruiting clinical talent to the rural health setting to support service growth goals.

Challenge #1: Addressing Patient Access to Clinicians

One of the first steps rural hospitals can take to broaden clinical coverage and keep care visits in house is to forge new relationships with established regional care providers. To grow clinician access within the community, Artesia partnered with teaching hospitals in the region to expand nurse practitioner rotations for family practice and behavioral health. Nurse practitioners and physician assistants also give the opportunity to expand coverage.

Hospitals are using telehealth to bring additional opportunities for specialist engagement to local patients while keeping overhead down. Some remote work arrangements can help rural hospitals attract staff for non-patient facing roles in areas such as IT and clinical coding.

Restructuring to make primary care the main patient point of contact allows access to more effective, timely, and immediate care, and provides a level of control over the patient population to then route patients to appropriate follow-up care with specialists. Expanded family practice offerings allow rural hospitals, which typically see high levels of activity in the emergency department (ED), to redirect patients to more cost-effective walk-in or urgent care centers. This again presents an opportunity for hospitals to lower costs.

Challenge #2: Maximizing Information Technology Investments

Aligning IT resources to hospitals’ expanding clinician base can pose another challenge to rural health providers. Clinicians are being expected to rely more and more on information systems to do their jobs. System abilities to support physician workflows and practice patterns are critical. Optimizing existing EHR technology to be compliant with the various Centers for Medicare and Medicaid Services programs is also paramount in unlocking available incentive payments and in ensuring effective patient management and capturing accurate clinical information in a timely manner. Providers should seek to implement systems that are intuitive and flexible enough to support different clinician workflows and information requirements.

Limited consideration for change management during initial EHR implementation can lead to adoption resistance among staff. To address clinician concerns related to EHR workflow challenges, rural hospitals can implement an optimization program centered on direct, end-user feedback. Artesia’s Superusers program formalizes the listening process and gives EHR users a forum for involvement and ongoing education and learning. This offers stakeholders a continuous feedback loop for IT improvements. Leadership’s acknowledgement that technology optimization and change management is an ongoing process sets the tone for an organizational culture of continuous improvement.

Implementation of a formalized IT steering committee can establish consensus in fielding and prioritizing IT projects. While not all technical requests are met, the opportunity to learn from end-user experience makes staff feel their input matters. Training opportunities should entail up-front immersion in new technologies, routine retraining opportunities like weekly lunch-and-learns and bi-annual training courses, and targeted updates as systems are fine-tuned throughout the year.

Challenge #3: Managing Population Health

Many hospitals are focused on improving the health and wellness of their patient population to support value-based care. For rural providers with limited patient pools, the ability to work in isolation on value-based projects may be limited. The evaluation of risk-based contracting is prudent but may require more work and research to understand rural healthcare’s role, risk levels, and strategic approach.

Targeted programs that place emphasis on wellness visits, effective communication during patient care transitions, and Medicare population management support population health efforts through proactive clinical intervention. It can also be prudent to evaluate opportunities to collaborate more with local employers to be the main care provider for their employees.

Hospitals can also gain from leveraging community ties to proactively educate patients on wellness issues and chronic disease management and to promote better community outcomes. To advance those initiatives, hospitals may wish to explore the feasibility of shared-risk arrangements with large employers and payers in the region. Doing so can provide a means to drive patient volumes back into the hospital and its primary care practices to establish more control in managing the health of the population.

Artesia leadership remains dedicated to making sure the facility provides high-quality care in a sustainable way. There is always concern that revenues may dip under fee-for-value. Executives need to remain keenly focused on cost reduction and control in areas such as labor and productivity, ensuring high-value supplies and capital equipment are effectively utilized.

Finally, care coordinators should look to expand proactive patient outreach efforts beyond Medicare patient populations to better serve additional at-risk patients and to more effectively engage patients and their caregivers.

Becoming a ‘Go-To’ Resource

Intervention strategies, expanded care capacity, and new engagement tools such as patient portals, online bill-pay, and mobile health units continue to help Artesia enhance convenience for its patients and the providers delivering care—establishing the hospital as the “go-to” resource within the community.

Robert Tyk, FHFMA, is CEO, Artesia General Hospital, Artesia, N.M, and a member of HFMA’s New Mexico Chapter.

Jon Melling, FHIMSS, is a partner, Pivot Point Consulting, a Vaco Company, Brentwood, Tenn., and a member of HFMA’s Arizona Chapter.


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