Three Rural Healthcare Challenges in 2013

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John Commins at HealthLeaders Media delineates three areas in which rural healthcare will be challenged in 2013 and beyond. These areas reflect concerns that rural healthcare executives often express in HCE’s conversations with them.

Commins believes the first challenge will be with “rural patient migration.”

One study found that Tennessee patients tend to seek out urban-care settings, even if rural care is closer and has the same services as their urban counterparts. The motivation behind this preference is unclear, but Steven L. Coulter, MD, president of the BlueCross BlueShield of Tennessee Health Institute, speculates that these patients judge urban care to be better than the rural care offered.

Commins writes, “These findings suggest that profound changes are underway for rural hospitals, at least in Tennessee. Maybe it’s time for rural hospitals to wave the white flag for elective procedures and instead focus on services that take advantage of their proximity to patients: Trauma and chronic care,” especially since the PPACA “will place a renewed emphasis, and money, on chronic care treatment.”

The second challenge is “the obesity battle in rural America.”

This comes up in just about every conversation we have with rural executives. Obesity is a major problem for most hospitals, but it especially seems to be potent in rural areas where the patient population tends to be, in Commins’ words, “older, sicker, less educated, less affluent, and more overweight.”  As you can imagine, this places a tremendous strain on these systems, especially with outcomes-based reimbursements being imminent.

A September 2012 University of Florida study revealed that the difference in obesity rates in an urban setting are stark when compared to a rural setting–33 percent vs. 40 percent and doubling the gap found in earlier studies.  Alan Morgan, chief executive officer of the National Rural Health Association, noted, “We simply cannot ignore the link between obesity and poverty, and the disproportionate impact this is having on rural America. If we truly want to decrease healthcare costs and improve the nation’s health status, we are going to have to start viewing obesity as a top-tier public-health concern for rural Americans.”

Despite the current lack of coordination among rural healthcare providers and cooperative extensions, it is imperative, Commins writes, that both “…get on the front end of this epidemic and emphasize prevention.”

Finally, Commins poses a question: What’s Driving the Community Hospital M&A Boom?

Hospital M&As have steadily increased in the last decade, Irvin Levin Associates told Commins, “growing from 38 deals involving 56 hospitals in 2003, to 90 deals involving 156 hospitals in 2011.”

Why? The Healthcare Financial Management Association breaks it down to “three primary drivers” behind this phenomenon.  According to Commins, they are: “lower payment rates from all payers” are inviting “consolidation as hospitals look to reduce costs and improve economies of scale and market leverage with payers and vendors”; “physician-employees, technology, and regulatory compliance are driving up the cost of doing business”; and “accountable-care organizations reward integrated healthcare delivery that improves quality at reduced cost.”

We’re interested in hearing from the rural executives reading this posting. Are these challenges an adequate summary of what you’re facing right now? What would you add to the list? What insights could you offer about the above challenges and how your organization is dealing with them?

-by Pete Fernbaugh

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