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Saving rural hospitals

There is a crisis involving rural hospitals in the United States. They are closing at a pace that threatens to leave millions of residents without access to necessary care. According to a study released by the consulting from Navigant in February (, “Rural hospitals are essential to the health of the 60 million Americans who live in rural communities. Beyond providing care, they’re also economic engines, often the largest employers and drivers of additional businesses and jobs to communities. But for close to three decades, rural population growth has been significantly lower than urban areas, a factor contributing to the closing of 95 rural hospitals across 26 states since 2010. And the economic effects are immediate—a study found that when a community loses its hospital, per capita income falls 4% and the unemployment rate rises 1.6%.”

It is clearly crucial in rural communities to keep hospitals and healthcare facilities up and running to treat the community. The Pennsylvania Rural Health Model (PRHM), rolled out on March 6, intends to do just that. Five healthcare facilities were selected to be part of the program, including Wayne Memorial Hospital in Honesdale.

“The administration is showing us a sign that they are moving away from ‘we’re here to regulate and mandate’ to one of ‘we are here to assist and enable,'"—Sen. Lisa Baker

At a press conference in Harrisburg, Dr. Nancy Levine, PA Department of Health secretary, announced the program, which features a much different way of providing funding for hospitals.

“It creates an alternative payment model that will move rural hospitals from a fee-for-service payment structure to what is called a global budget. In other words, instead of a hospital getting paid when a payment is treated at the hospital, the hospital will receive a predictable, reliable stream of income to provide [our rural] population health [and] medical services to the community. This will insure that the hospital remains economically viable, while actually improving health outcomes for residents that live around the hospital,” Levine said.

And who will be making those payments? Some will come from the Center for Medicare and Medicaid Services. Some will also come from three private insurers who have opted to participate. The program is also made possible by a five-year $25 million federal grant. Levine said the goal is that, over the next three years, 30 more healthcare facilities in the state would join the PRHM.

Several officials who spoke at the press conference noted that this was a collaboration of governments at the federal, state and local levels, as well as with the healthcare facilities and insurance companies. It’s a program that has been at least two years in the making.

Jessica K. Altman, commissioner of the Pennsylvania Insurance Department, said rates of people in Pennsylvania without health insurance are at an all-time low of 5.5% because of the Affordable Care Act and expanded Medicaid in the state.

“More people with insurance is good for those people, but it’s also good for hospitals, especially rural hospitals, as it reduced the amount of uncompensated care they must provide. It allows hospitals to remain open to provide needed care. PRHM is the next step for these hospitals and for insuring the availability of healthcare in our rural communities.”

Sen. Lisa Baker is a sponsor of the legislation in the Senate, which has allowed the program to move forward. She complimented the administration of Gov. Tom Wolf in the way it participated in the development of the program.

“The administration is showing us a sign that they are moving away from ‘we’re here to regulate and mandate’ to one of ‘we are here to assist and enable,’” she said.

“Without question, local health leaders—and I’ve heard from many of them—are awaiting this important rollout. When time and resources are not so intensively focused on keeping doors open and the lights on, it creates the opportunity to intensify and expand efforts at the community health and wellness outreach. We know getting people healthy keeps them out of the hospital. So, this is really a lifeline effort to attend to the long-term health of these crucial medical facilities in an area that I represent and similar areas around the state,” Baker said.

It is heartening to see politicians at the federal and state level working with the medical community, Medicaid, Medicare and private insurers to make what may turn out to be ground-breaking innovations in the area of funding rural hospitals, which clearly needs improvement.


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