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Small-Town Advocate

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Brian Shockney is no stranger to rural healthcare. For 20 years he has worked in small-town hospitals—and he wouldn’t have it any other way. “I love rural healthcare. I grew up in rural America, and I love the issues,” says the president and chief executive officer at 104-staffed-bed Memorial Hospital in Logansport, IN. Located in an agricultural area, Memorial Hospital admits about 3,000 patients annually. HealthLeaders recently talked with Shockney, who was named chair of the American Hospital Association’s Section for Small or Rural Hospitals in January 2007, about the challenges of rural healthcare and his priorities as head of the 22-person governing council.

HealthLeaders: What led you to a career in healthcare?

Brian Shockney: My father had a career in healthcare, and I used go into the hospital with him. I loved the hospital environment and realized that I wanted to do something in the nonprofit world where you could really make a difference in people’s lives each day. I thought briefly about medicine but seeing what my dad was doing on the administrative side of the hospital, I just really fell in love with that and decided I wanted to follow in his footsteps.

HL: What issue do you think is keeping rural healthcare executives up at night?

Shockney: Adequate reimbursement would be—for rural hospitals—the most important issue. Currently, Medicare and Medicaid do not pay for the cost of care. And without adequate reimbursement, we are continually trying to balance the needs of our communities with the ability to pay staff and keep the lights on.

HL: What needs to happen to resolve those concerns?

Shockney: I don’t think there is one magical pill that’s going to fix it. There are several opinions on what needs to happen. The first one that has some merit is universal health policy—some type of basic coverage for all Americans. We see many people in rural areas—especially where we’ve got small business as the backbone of the community—where they don’t have access to health insurance. When people come to rural providers they are often more compromised in their disease process, because they have been afraid to seek or have neglected to seek care because of their ability to pay for those services. We in rural America tend to be proud people. We work hard and don’t like to seek charity.

Another area that needs to be looked at is what Medicare and Medicaid pay providers for healthcare. Our hospital receives about 33 cents on the dollar for Medicaid—about a third of our cost. Not the charge, but the cost of caring for Medicaid patients. And Medicare pays us about 47 cents on the dollar. Therefore, private industry and those of us who pay copays or have high-deductible plans pay the difference. That margin has been squeezed for many years. We can no longer pass those costs on to consumers or businesses.

HL: What is the time frame for a solution?

Shockney: In the 2008 elections there will be a lot of discussion about it. It’s something that is on the front burner of most legislators’ minds and a lot of business individuals’ minds, as well. I see solutions coming forward in the next two to three years that could substantially change the way the healthcare system reimburses and provides access to patients.

HL: What should rural hospital executives be focusing on?

Shockney: From the administrative offices standpoint, the big issues are recruiting physicians and practitioners to rural areas. It is more difficult to get a physician or provider and their spouse to come to a rural area. That is a huge issue that we deal with on a daily basis. The other thing is reimbursement and ensuring that you have policies in place to get every dollar that is owed to you. The government did a great thing in creating the critical-access hospital designation. Memorial Hospital is not a CAH. But that designation allows communities that would have lost their hospitals to maintain them through a better reimbursement mechanism from Medicare. They are working on very slim margins, but it has allowed primary access to care. That is something I worry about and I know my fellow administrators worry about every day. Can we continue to provide 24-hour emergency room service at the highest level? The expectations of consumers continue to grow. You have to balance meeting consumer’s expectations with the financing and the ability to provide those services to your community.

HL: What are your priorities as chair of the AHA Section for Small or Rural Hospitals?

Shockney: No. 1 is ensuring that rural America has a strong voice at the national level. People often have an impression that rural healthcare doesn’t provide the same level of service, which I believe is just the opposite. In a rural facility our patients are our neighbors and our family members, so we provide that higher level of service because we are concerned what someone might say to us in the grocery store if they don’t get the care that they deserve.

Second is access to funds for renewing buildings and equipment. Rural hospitals—specifically those not part of a larger system—find it difficult to get capital funds to pay for new equipment, new building and upgrading facilities. Our bond ratings or finances might not look as strong as someone who is affiliated with a larger group, so there needs to be avenues for creative financing for rural facilities to upgrade and provide that basic technology and quality of care.

The third thing is access to funds and information technology. While wireless Internet is great, having access to T1 lines and T3 lines and connections for electronic medical records is very difficult for rural facilities. An investment in something like that at the low end is $1 million and at the high end upwards of $10 million to $20 million. That is very difficult to do for a small rural facility when you have other priorities like a CT scanner that is going to cost $1.2 million or a MRI that is going to cost $1.5 million.

—Carrie Vaughan