We know all about the past and present of rural healthcare, but what about future prospects, conditions, and opportunities? Over the next few RACmonitor e-news publications, we will unbundle a snapshot of what a Donald Trump presidency and GOP-controlled Capitol Hill might look like. In the first edition in the series, we will take a brief walk down the painful and challenging memory lane of rural healthcare since the 2010 passage of the Patient Protection and Affordable Care Act (PPACA), which sets the stage for examination of the future state of rural healthcare.

For the last several years, rural healthcare has experienced some victories involving providers managing to stay in business and afloat, but also the sting of being put on the backburner, marking one reason the sector has often referred to itself as “hemorrhaging” jobs and resources. Care delivery cuts have been made for the most vulnerable populations and community members, including veterans, minorities, and the otherwise underserved. The 2016 calendar year also exhibited a continuation of the national opioid epidemic, critical access hospital closures, rising insurance premiums, fewer choices within insurance exchanges, lack of Medicaid expansion, and recruitment/retention challenges ranging from a variety of areas. Such challenges also involved increased needs of an aging population, high uninsured rates, and a payor mix dominated by Medicare and Medicaid. These issues were complicated by economic challenges in various industry sectors, aging facilities, lack of sustainability among operations due to increasing policy and impact reimbursement changes, and more. And of course, there are issues with outdated payment and delivery system models, swing beds, the 340B drug program, meaningful use, ICD-10, accountable care organizations (ACOs), clinics, and federally qualified health centers (FQHCs). 

Additionally, there have been inconsistencies for tele-health services. Throughout 2016 there was a marked growth in health disparities between those living in rural areas versus their urban counterparts. Not only do rural residents suffer from higher incidence of chronic illness, they also have limited access to primary care services and are more likely to be uninsured or under-insured.

There are also economic changes taking place within rural areas nationwide, and although there has been significant regional growth of employment opportunities in the Midwest, Southeast, and Pacific Northwest, overall, there have been fewer rural growth employment opportunities elsewhere. And according to the U.S. Department of Agriculture (USDA) Economic Research Services, those overall opportunities remain lower than the pre-recession level, translating to fewer overall opportunities to compete with increased costs and pricing in the national marketplace.

Major employers’ activities, tax incentives, and lack of housing have also caused an evaporation of populations in some areas, and as a result, younger citizens aren’t being incentivized to stay in their home communities and have to seek livelihood elsewhere, never to return.

Because rural hospitals are a source of pride and in most cases, the primary economic drivers within rural communities, hospital closures have reduced residents’ access to care, especially emergency care. Without the sustainability of the hospital system or another care delivery model in place, the gaps in access and delivery have been widening even more dramatically within the last five years.

Arrival of the PPACA – What has it Meant?

No one wants the catastrophic closings that followed changes in the Medicare payment system 30 years ago, but the PPACA, which was supposed to represent promise for rural healthcare, seems to have been a nail in the coffin in some cases. There have been 70 hospital closures since 2010. Of the 25 states that have seen at least one rural hospital close since 2010, those with the most closures are located in the South. States in this region with high rates of vulnerability include Mississippi (79 percent), Louisiana (58 percent), and Georgia (53 percent).

Impact on the Rural Marketplace

According to a recent iVantage Health Analytics study, there are 673 rural hospitals identified as vulnerable to closure, with 355 in markets with great rural health disparities – communities that can least afford to lose access to care for patients. Additionally, if the 673 vulnerable hospitals were to shut down, 99,000 healthcare jobs in rural communities across the nation would be lost and there would be an estimated $277 billion impact to the GDP.

Once-High Hopes

Originally, the PPACA was meant to bring access to quality affordable health coverage for 60 million rural residents (more specifically, 7.8 million uninsured) and increase prevention and wellness, providing better results and control for individuals and families over their respective healthcare. At first, these reforms seemed favorable because of the heightened disparities in rural America, such as the fact that one in five uninsured Americans live in a rural area. The original thought was also that most states would expand Medicaid, and rural residents would be eligible for affordable coverage under the expansion. 

Additionally, more residents were to be expected to receive subsidies for coverage. And yes, PPACA did bring coverage to 20 million more people who otherwise wouldn’t have had access, but the bill was also cited by experts and clinicians as a principal reason for hospital closures. Along with cuts from the the ongoing federal budget sequestration reduction, penalties associated with the PPACA also caused hospitals harm. With the decline of federal reimbursements (cuts in Medicare caused by lack of congressional agreement), the PPACA also reduced payments to hospitals for the uninsured, as so many thought that all states would jump on the bandwagon for increased funding to expand state Medicaid programs. 

In the end, while those states expanding Medicaid had hospitals that experienced lower numbers of uninsured and bad debt, charitable care declined by an average of 13 percent in the nearly 20 states that decided not to provide Medicaid expansion, representing 63 percent of hospitals vulnerable to closure. Their respective charity care, which already had created vulnerable bottom lines, showed less resilience to absorb even bigger hits. With the cessation of inpatient services and only outpatient care being offered, imaging, emergency care, urgent care, primary care, and/or skilled nursing or rehabilitation services haven’t created a recipe for sustainability, and many such facilities have closed their doors forever. 

Also, small clinics were supposed to benefit from the PPACA, particularly FQHCs, which received funding from the Health Center Trust Fund However, some of the clinics have been worse off, unlike hospitals, because often50 percent of their clients were without insurance coverage prior to the PPACA.

On the flip side, the U.S. Department of Health and Human Services (HHS) has stated that 90 percent of rural America has qualified for a subsidy, and that in 2016, one in five plans purchased on the marketplace exchange was from a rural community member. Additionally, they noted that the profound impact on coverage has amounted to an increase of 3.5 percent of citizens having a primary care provider and 2.4-percent easier access to medicine and medical care; the struggle to pay medical bills also dropped from 21 percent in 2011 to 16 percent in 2016. Additionally, there has been a decrease of 5.5 percent in the number of people who are unable to afford care, with those reporting fair or poor health decreasing to 3.4 percent.

Medicaid coverage expansion has also improved the financial position of the newly insured, reducing the amount of debt collection from $1,000 to $600 per person, on average. Additionally, gains in coverage because of the PPACA were strong across all racial and ethnic groups between October 2013 and early 2016.

  • The uninsured rate among black non-Hispanics dropped by more than 50 percent (from 22.4 to 10 percent), corresponding to about 3 million adults gaining coverage.
  • The uninsured rate among Hispanics dropped by more than 25 percent (from 41.8 to 30.5 percent), corresponding to about 4 million Hispanic adults gaining coverage. 
  • The uninsured rate among white non-Hispanics declined by more than 50 percent (from 14.3 to 7.0 percent), corresponding to about 8.9 million adults gaining coverage.

Each year, healthcare costs are rising, so with the wonderful aforementioned improvements, there aren’t adequate programs or answers in place for those figures to be sustained or expand. Additionally, billions of dollars once pumped into cooperatives are now imploding, leaving individuals who had coverage with these entities to be placed back on plans with premiums outside of affordability. This is causing issues that might offset the aforementioned progress, especially since most major insurers have announced that they would offer fewer or no plans on the exchanges moving into 2017, creating de facto monopolies in roughly a third of the country. When 2017 premiums were recently released, it was shown that on average, there is a price hike of 25 percent. Prices in some states are skyrocketing, with 60-percent rate increases, and yet in a few places, there have been modest increases, with a handful of counties experiencing less expensive premiums than last year. Regardless, rural Americans still are facing fewer options and higher premiums than their urban counterparts.

Rural decimation will be at hand if basic coverage and premiums can’t be attained and afforded, especially if the GOP revamps/repeals the PPACA and overhauls Medicaid and Medicare! Imagine the impact to the country and rural communities if the PPACA is dismantled in any way and offset, retooled, or repealed and replaced with any of the eight GOP options being floating about right now. It’s a soap opera on par with As the World Turns. Please note that this is not a political argument, to say that there are not solid or reasonable elements within the GOP options, but it is an assessment of implication(s) of what such transitions and changes (like a pendulum swinging) would have on our most vulnerable populations and communities.

Turning Points

The election aside, all sides need to come together. This is indeed a time to get united, and there is equal opportunity in every party to create solutions. Simply put, the rural markets can’t afford to be left behind to face greater inequities. 

Louder Voices

The current situation marks an opportunity for rural healthcare to be part of a larger voice and take center stage. 

The well-respected voices of the NRHA (National Rural Health Association), the AHA (American Hospital Association), the AMA (American Medical Association), the Academy of Primary Physicians, NAACOS (National Association of Accountable Care Organizations), and those representing FQHCs, rural health clinics, and statewide physicians, clinicians, hospitals, and rural health memberships will be playing an even more integral voice in shaping the future, as well as those within the fields of healthcare technology/telecommunications like the ATA (American Telemedicine Association). 

State governments will also have even more hands on deck as it pertains to opportunities to shape the status of their states and the focus of Medicaid. It is also an opportunity for associations, advisory councils, and initiatives championing areas of “equity” to be heard – representing underserved populations, minorities, rural veterans, and tribal nations to share their respective stories and needs.

Healthcare insurance is currently the elephant in the room and will also shape messaging and reactions. It will also be powerful in what happens in practices, health systems, and medical schools in terms of workforce changes – recruitment and retention. Rural healthcare is currently slated to experience an extreme deficit of primary care physicians in the next 20-30 years. If premiums take a huge hike, the general care delivery system may take shape, negatively impacting direct primary care, concierge, and personalized medicine even more. 

In terms of staving off hospital closures, the Trump administration and the Centers for Medicare & Medicaid Services (CMS) will need to look more closely at what is at stake for rural health, focusing on strengthening it versus harming it.

To that, both Medicare and Medicaid have sustainability issues: The shape of Medicaid as a result of proposed new policy changes could be highly individualized per state and potentially be all over the place in terms of equity, quality, and favorability depending on the decision-makers and needs. Medicare will need an entirely different overhaul. Taxpayers already spend $500 billion each year for Medicare. The red flag that needs to be really be addressed head-on is just how Medicare can possibly continue to control costs in the face of a demographic explosive boom of 10,000+ Americans entering Medicare each day, especially given the cost of care for disease cures and chronic disease management.

Decreasing hospital costs by decreasing prescription drug rates, plus supporting the 340B drug programs for lowering the costs of more expensive drugs and outpatient drugs, will be vital – as well as what had been noted on the campaign trail regarding the public health epidemic of opioid/drug abuse. A longstanding commitment to policy support, funding, and initiatives will be necessary to eradicate this epidemic across the nation, especially within rural communities, where it is becoming more prevalent and destructive. Efforts will need to be undertaken to limit the supply of prescription opioids, to raise awareness of the risk of opioid addiction, and to provide access, care, and support for treating the opioid-dependent population.

Innovative models of collaboration might be even more aligned for rural pricing, benchmarks, and incentives. Telehealth policies will need room for reimbursement and expansion, especially in areas already experiencing barriers in access to specialty care. Currently, primary care and specialists for the most are not utilized because they don’t receive reimbursement. This is where connection of care  will be essential to keep up with the times and the needs.

Innovation will have to be a driver in the development of effective payment models for all models of care delivery. This includes providers becoming part of an ACO model, which is more advantageous for primary care and specialty physicians within the MSSP framework and beyond the Comprehensive Primary Care Plus program. This will allow rural providers to better thrive in care coordination, quality of patient care, and cost savings, making for a more equitable framework within healthcare.

The Triple Aim and the trifecta of access, affordability, and the overall health of the nation is key, with population health reflecting all that is at stake.  By making our voices heard on Capitol Hill and being active on all fronts, let’s make it a nice 2017 season for rural healthcare.


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