Medlearn Media NPOS Non-patient outcome spending

A book on my Amazon watchlist, set to release in October, got me thinking about rural hospitals. The book is by Dr. David Nash and Charles Wohlforth, titled “How Covid Crashed the System: A Guide to Fixing American Healthcare.” In the podcast interviews and the highlights I have read, the book discusses how our system pre-COVID was already designed to fail. The failure results from our racial and financial inequities and our “misguided individualism which tore communities apart” as we bartered against each other for PPE, staff, and hospital beds. What we see today is the continued impact of an already fragile healthcare system.

At HIMSS 2022, economist Diane Swonk warned that we are about to see a lot of hospitals close, and the biggest impact will be the already underserved and rural areas. They cannot sustain the current financial challenges with high turnover resulting in staffing agency wage costs and the growing inflation which is hitting every hospital supply from medications to bed sheets. According to the Center for Healthcare Quality & Payment Reform (CHQPR), 40 percent of rural hospitals are at risk of closing. For example, Santa Cruz Regional Hospital in Green Valley, AZ closed its 49-bed hospital and laid off over 300 employees in June. Since 2010, 193 rural hospitals have closed and in 2020 closed their doors, all causing patients to travel greater distances for emergency and outpatient services. CHQPR attributes the primary cause for rural hospital closures stemming from not enough revenue from health insurance plans to sustain services. Many of these hospitals do not have a large private insurance payer mix to offset the uninsured or Medicaid population.   

In order to slow the painful decline to our rural health system, the Centers for Medicare & Medicaid Services (CMS) is proposing a rule to create a new designation for rural hospitals, called “rural emergency hospitals” or REHs. As Dr. Ronald Hirsch discussed in prior segments on Monitor Mondays, the proposal defines REHs as not providing acute inpatient care services but has a transfer agreement in effect with a level I or II trauma center. They provide a 24/7 staffed emergency department and outpatient and/or observation services.  The designation would also make some expansions to critical access hospitals. The REH would receive an additional five percent payment of the services provided under the Medicare Hospital Outpatient Prospective Payment System.

Consideration is also being made during the open comment period of an additional monthly facility payment to support REH long-term viability. Although, any type of help is needed to serve our rural communities, I am concerned about the designation excluding the allowance of inpatient admissions. 

This week’s Monitor Mondays survey asked our listeners whether they are in favor of a new hospital designation by CMS, the REH – Rural Emergency Hospitals. The responses may surprise you, and can be viewed here.

Programming Note: Listen to Tiffany Ferguson live reporting on the SDoH every Monday on Monitor Mondays at 10 Eastern.

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