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AHA Rural Chair: Reimbursement Top Challenge

 |  By John Commins  
   January 23, 2013

Alvin Hoover, CEO of King's Daughters Medical Center in Brookhaven, MS, took the reins this month as chair of the American Hospital Association's Section for Small or Rural Hospitals in 2013.

The 24-person governing council represents small or rural hospitals in the AHA's policy process and member services initiatives. Hoover spoke recently with HealthLeaders Media about the challenges that small and rural hospitals will face in the coming year.

HLM: In your view how are small and rural hospitals faring these days?

AH: Times are a little bit scary for hospitals, particularly for small and rural hospitals. They typically don't have the volumes of patients they have in urban and suburban hospitals. You have a lot of hospitals out there and their census is eight or 12 patients a day and it is hard to come by economies of scale when you are seeing those few patients.

Figuring out how to do things differently is going to be a real challenge. There are threats to the critical access hospital program. Some legislators think that paying an extra 1% on top of your costs is too much. It's not for small and rural hospitals. Those critical access hospitals have to figure out how to be efficient and effective with their care. Those are words you will hear me say all year long.

We have to improve quality in a way that is different than before. We have to figure out how to do it with fewer resources. For small and rural hospitals those are daunting challenges because they are often the first and the last places where you can get healthcare.

HLM: What do you see as your top priorities as chair of the Small or Rural Hospitals Governing Council?

AH: The first challenge is going to be reimbursement. With healthcare reform every organization, whether it is a hospital or a nursing home or whatever is facing tremendous challenges on the reimbursement side from the federal government. Medicare/Medicaid is seeing tremendous changes.

We are seeing changes on the state level too. It's important that as a governing council we are getting information on that impact from our constituents and if we take that message in a clear and coherent way to Congress so that they can hear it we can educate Congress about what we are doing and get them to buy in.

It's going to be more important than ever for our legislators to hear from the grassroots.

HLM: Are the concerns of small and rural hospitals being heard in the halls of Congress?

AH: I think we have a place. If you look across the demographics of our country, you'd find a lot of rural states and those legislators hear us when we come to Washington. They are aware of how important hospitals are to their local communities.

King's Daughters Medical Center is the third-largest employer in Lincoln County. I have a message and a platform that allows me to be heard. Across America a lot of times the hospital is the largest employer with the best-paying jobs.

If you eliminate those from small communities they are going to dry up and blow away.

HLM: What other issues facing small and rural hospitals do you hope to address in your tenure as chairman?

AH: There are always opportunities to get the message heard on the small things. Even in this fix that Congress did right before the end of the year there were some low-volume adjustments that they plugged back in. There is the Medicare-dependent hospital stuff that they plugged back in.

But the overarching challenge is going to be to helping the legislators understand that massive cuts to reimbursement to try to lower the deficit can't all be on the backs of hospitals. We presented some options to the legislators about what they can cut besides healthcare and we are going to take that message to them again.

We know we have to be more efficient and effective in the care we give and we have to eliminate waste in our system. But that takes a little time so they need to work with us on how they adjust the reimbursements for hospitals to give us the time to work on those efficiencies.

We are going to look at quality, which you can tie back to reimbursements, value-based purchasing, and the penalties we are seeing coming down for not providing good care or having good scores. In small and rural hospitals a lot of times you just don't have the resources.

Big hospitals face the same challenges on a larger scale but they typically have some resources available on the quality side and the performance improvement side that small and rural hospitals don't have. We are going to have to learn how to do quality and develop a quality culture in our hospitals. It has to be different than business as usual. We have been asked to do more with less year after year.

Performance improvement programs at small hospitals need a cultural shift, where each employee is empowered to have a voice and make changes and believe that when they have an idea and bring it forward someone is going to consider it.

We've got to figure out how to get the waste out of our system. We want to figure out how to get people out of the waiting rooms and getting care. We have to learn how to be efficient with resources, whether it is human resources or supplies, the actual care that we give, we want to be as efficient and safe and effective as we possibly can.

HLM: Given challenges like economy of scale, low volume, and patient migration, should small and rural hospitals reassess the services they are offering?

AH: We all have to examine our service lines and see what we can afford to do well. But it's foolish to think that small and rural hospitals should throw in the towel.

Who lives in rural America? Elderly people live in rural America. How difficult is it for them to drive down the road for an hour to get care? By golly it's better for them to get care at home in small town America where they have the friends and support versus driving to a big town.

The people who live in my community don't want to drive to big towns to get their healthcare. The folks who bypass you are folks with means and the ability to pay and who have children who can drive them back and forth. But a lot of people in rural America don't have that luxury.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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