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News: Critical action needed for critical access hospitals

CDI Strategies, March 3, 2016

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Nearly 700 rural hospitals are at risk of closure, according to a report from iVantage Analytics. Rural or critical access hospitals (CAHs) provide care to about 11.7 million people, employ 100,000 healthcare workers, and account for $277 billion in economic activity. Yet the report shows that that of 673 rural hospitals, one out of three are under financial duress, and 210 are at high risk of closing. 

iVantage looked at about 70 metrics, such as market position, balance sheet, costs, charges, and outcomes from the more than 66 rural hospitals that closed since 2010 and applied those same metrics to rural hospitals that remain operational. 

Troubling as these statistics seems, they did not surprise Alan Morgan, CEO of the National Rural Health Association, which partnered in the iVantage study.

"If it was one single issue then, from a policy perspective, it would be easy to show why they are closing, so you need to do this. But there are multiple factors," Morgan says. "Number one [problem was] sequestration [followed by] a series of congressionally mandated Medicare cuts that have happened over the past few years, and the reductions in the payments included in the Affordable Care Act." 

Cuts to the disproportionate share payments included in the Affordable Care Act (ACA) were supposed to be offset by Medicaid expansion, but “that hasn't happened,” Morgan says.

In addition, the ACA-mandated healthcare exchanges were supposed to help with the numbers of people presenting at rural hospitals with insurance. While the numbers of insured increased they haven't been signing up in rural areas at the same levels as in urban areas.

“So multiple factors within the Affordable Care Act are just not playing out in a positive manner for rural hospitals," he says.

In addition to legislation—such as the Save Rural Hospitals Act—rural hospitals must position themselves for a value-based future, Morgan says.

As rural facilities continue to compete on costs, and make sure they have the best clinical outcomes, quality, and patient satisfaction, CDI components may become an integral component in these efforts.

Editor’s Note: This article was originally published by HealthLeaders Media. 

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