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Rural health care services are an issue of intense interest for the U.S. Congress, with multiple pieces of legislation pending before both the house and Senate. In the Senate for example, Sen. Grassley introduced the “Rural Emergency Acute Care Hospital Act” in 2017 which intended to help rural hospitals stay open and to improve emergency and outpatient services (Grassley.senate.gov, 2017). Sen John Thune also introduced the “Rural Hospital Regulatory Relief Act of 2017”, designed to limit the enforcement of physician supervision requirements in critical access and small rural hospitals (Congressional Documents and Publications, 2017). There are multiple pieces of legislation pending in the House as well related to rural health care services.

The primary reason for the interest in rural health care services is the declining availability of emergency and other health care services for rural populations. Since 2010, 83 rural hospitals have closed reducing already hospital access to already vulnerable populations (Inglehart, 2018). Reductions in hospital accessibility means that individuals living in rural areas must travel much further than their urban counterparts without easy access to transportation. These vulnerable populations have higher instances of suicide, more chronic health conditions like diabetes, and are subject to a widening life expectancy gap which are all made worse by the limitation of adequate health care access (Inglehart, 2018). Rural residents are more likely to be uninsured than their urban counterparts or receive government subsidized insurance and have fewer insurance options (Williams and Holmes, 2018). The limited insurance options are a result of a smaller risk pools which prevents commercial insurers from being able to have a relatively financially stable market and health care networks. Combined limited access and higher rates of uninsured and sicker patients means that rural residents are not receiving care that is adequate for their needs and they have a more difficult time obtaining care than their urban counterparts.

The testimony provided before the Senate Finance Committee is meant to provide Congress with additional knowledge about these and other challenges faced by rural health care providers, and the actions Congress has taken or should take in order to reduce the health disparities between urban and rural residents.

The witnesses who testified before the committee are: Dr. George Pink, a Humana Distinguished Professor and Deputy Director for the North Carolina Rural Health Research Program at the University of North Carolina at Chapel Hill; Dr. Keith Mueller, Interim Dean at the College of Public Health and Gerhard Hartman Professor in Health Management and Policy at the University of Iowa; Ms. Konnie Martin, Chief Executive Officer of San Luis Valley Health in Colorado; Ms. Susan Thompson, MS, BSN, RN, Senior Vice President of Integration and Optimization and CEO at Unity Point Accountable Care; and Dr. Karen Murphy, RN, Senior Vice President and Chief Innovation Officer at the Glenn Steele Institute of Health Innovation.

Dr. Pink’s testimony made several points with relation to rural hospital closures including that long-term profitability from lower patient volume presents a large hurdle to improving access to rural hospitals and health care services. This supports the background information on rural health care in general, that high fixed costs and low patient volume makes it difficult to have a financially sustainable health care network. He also points to reimbursement reductions as adding already high financial stress, meaning a lower likelihood of adequate health care delivery. He does specifically mention that better targeting Medicare payments would help reduce adverse consequences on vulnerable communities. This is tied into the multiple payment streams processed by hospitals and other health care providers with respect to Medicare and Medicaid. Because of the fragmented payment streams, additional administration must be employed in order to handle all the payments, leading to higher overhead costs. His testimony points out that these vulnerable rural communities, communities with hospitals at high financial risk, tend to larger minority communities. Dr. Pink’s testimony for me was the most interesting. I think part of that is he had the luxury of going first, so a lot of his testimony was ‘original’ but he did mention the streamlining of Medicare and Medicaid payments which I had heard elsewhere as being a big and easily fixed problem for providers. It was interesting because it seems that most everyone agrees on this point but Congress has yet to take action on it.

Dr. Mueller’s testimony focuses largely on the Medicare Accountable Care Organization program and the RURPI Center for Rural Health Policy Analysis five key recommendations to improve quality of care., specifically: the organization of rural health systems to create an integrated care environment, building a rural system capable of supporting integrated care, facilitate participation in value-based payment schemes, aligning Medicare payment and performance metrics to Medicaid and commercial insurers, and develop payment systems that meet the needs to rural health care providers. He points out that rural providers face challenges that urban providers do not and have higher costs as a result. Some of the considerations that should be taken into account are the distances between providers, population densities and needed infrastructure improvement. I found Mr. Mueller’s testimony underwhelming as he didn’t really provide any sort of unique insights or innovative programmatic changes that could be made to help rural residents, he echoed a lot of what had already been said but I thought his testimony lacked real staying power.

Ms. Martin’s experience as a small health care system shines some light on the community demographics that contribute to the limited health care access in rural areas. Her health care system has two of the poorest counties in Colorado and a large number of Medicaid and Medicare recipients, presenting a big risk to the financial stability of her system. She points to regulatory burdens, resource limitations, and geographic isolation as critical obstacles faced by smaller rural hospitals who may not have the staff to keep up with large amounts of administrative oversight. She points out the success that San Luis Valley has had in workforce recruitment by creating partnerships with local and state schools to provide training and mentoring services to develop well trained local health care workforce. I liked her testimony because she out of the group of witnesses was the only one who had really been forced to create innovate solutions for her health care system. Partnering with local schools and understanding just how complicated the system can become with the different payment methods made her testimony very compelling.

Ms. Thompson points out the incentive problems associated with rural health care providers. She notes that many rural hospitals operate as fee-for-service providers, who need to maintain higher percentages of bed occupancy in order to make money and be financially viable. She contrasts this model with the Accountable Care Organizations which are rewarded for keeping people healthy and are not reimbursed based on the number of patients in beds or the number of procedures performed. When these two models are operating the same environment, the fee-for-service models fall apart. She maintains that rural healthcare can use the same value-based reimbursement models to improve the quantity and quality of rural health care. She highlights, as other witnesses did, the unique geographic challenges faced by rural hospitals. Rural areas often lack comprehensive community service and extreme distances to major health service centers all inhibiting the access to health care rural residents require. Her written testimony presents some opportunities to improve quality measurement and access including develop pilot Medicare Advantage test programs and include the cost of physical access to rural markets in ACO benchmark standards.

Dr. Murphy made a very interesting point that because hospital admissions are falling in general, the cases that are being admitted are often more complex than in the past and rural hospitals face a shortage of specialized physicians to deal with those cases. She largely parroted the other witnesses about the challenges facing rural health care providers but did mention that there was an analysis done that suggests that 673 rural hospitals may face closure in the next five years. That would represent a roughly 25% decrease in hospital availability in areas where that access is already extremely limited.

One of the more interesting questions came from Sen. Hatch who asked Ms. Martin what her system had done to streamline services and what margins would be helpful for systems like hers. She mentioned that margins in the 3-5% range would be considered successful, but that the infrastructure constraints have proved the most challenging. Her system has taken advantage of economies of scale to stretch specialty services across communities and have minimized the number of ‘excess’ services so that the services match the needs of her community. This question is relevant not only for rural hospitals but also for urban hospitals who face declining inpatient rates as well.

Sen. Wyden asked each panelist what they believed their top priority for long-term Medicare stability. This is interesting because it gets right to the heart of what can be done immediately to being the process of stabilizing Medicare services. It would be easy to ask the panel about their wish lists and let them list of ten different items which may or may not be specific. But by targeting specifically their number of one priority, it gives some structure for the future design of Medicare. Dr. Pink suggested that funding specifically dedicated to providing emergency services would be important. This goes back to the issues of rural individuals facing many challenges even getting to the doctor, and so they may wait until they require emergency services before doing so.

Ultimately the stakeholders in this policy discussion are the residents of rural areas, many of whom have chronic health conditions, rural health care providers who are on front lines dealing with traditional illnesses affecting rural populations, but also the growing opioid epidemic which is devastating rural populations. An important but unappreciated stakeholder (unless election year) is the tax payer. In each suggestion given before the panel and the pending legislation before Congress, the goal is to increase access to and quality of rural healthcare services. For consumers this means a better access to a wider range of services not only including emergency services, but also mental health and substance abuse services which are lacking in so many rural communities. For providers these suggestions would have the impact of reducing financial uncertainty and providing flexibility in creating service delivery programs that better fit the needs of their unique communities. Medicare and Medicaid cannot be a one size fits all, and some of the legislation mentioned above is aimed directly at providing that flexibility. Finally, for the tax payer this means a lower tax burden as services become more efficient as federal efforts are better targeted to have the desired impact. Unfortunately, too often a program designed to do one thing instead has a large number of adverse consequences that offset any potential gains. By thinking more critically about the issues of rural health care, tax payers can expect more efficient health care spending with better overall health outcomes.

For me this hearing was very enlightening for two reasons: the number of issues surrounding rural health care are complex and interdependent; there are several key issues that are repeated again and again and could represent the biggest and easiest improvements that can be made to the system to deliver financial and access stability in the very near future. The one thing that I didn’t think was adequately represented was the views of patients and community leaders. The panel could have asked representatives of rural health care consumers, so that they could understand the larger issues surrounding cost of care to providers and how communities are essentially held hostage by powerful health care providers and their lobby. This hearing made me realize just how long and cumbersome the legislative process can be. There have been multiple hearings on the subject and a number of bills that have been lingering in the legislature for multiple years with no action. It makes me believe a wholesale change in the way we think about health care needs to occur placing more emphasis on community engagement and ownership and program flexibility. The hearing was directly tied to the policy issue at hand, that is how can Congress modify existing or create new laws to help improve access to rural health care.

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