Obama's Proposed Budget is a Mixed Bag for Rural Health

Rural healthcare projects would lose $44 million in President Obama's proposed 2011 budget, but that number is deceiving because the reduction includes the end of two regional projects that are costing $45 million in the current fiscal year.

The programs are the Denali Project and the Delta Health Initiative. The Denali Project has received more than $300 million since 2000 for construction of health facilities in rural Alaska. The Delta Health Initiative, launched in 2006, brought seed money to projects providing chronic disease management, pharmacy, dental, school-based mental health services, and teenage pregnancy prevention to rural areas of Mississippi.

In defending the program cuts last year, the Obama Administration said the regions' needs were being largely met through "prior investments."

With those programs ending, their funding goes with them, leaving the total rural health line item in Obama's proposed budget at $142 million.

There are some positives for rural health. Rural health outreach is slated to receive an addition $1 million in the proposed budget ($57 million compared to $56 million in the current fiscal year).

"There are nearly 50 million people living in 2,052 rural counties throughout America who experience ongoing challenges in accessing healthcare," according to Obama's budget proposal. "The budget includes $142 million to improve access to quality healthcare in rural areas. Within this total, $62 million is included to work with Critical Access Hospitals, conduct research on rural health issues, and support community access to emergency devices."

It adds, "As part of the President's initiative to improve rural healthcare, HRSA [the Health Resources and Services Administration] will develop stronger links between telehealth activities and other investments in rural health."

Lori Heim, MD, president of the American Academy of Family Physicians, points to another section of the HRSA budget that increases spending by $27 million for the National Health Service Corps—from $142 million to $169 million.

"We calculated that this will pay for 445 new physicians, and most of them will provide care in medically underserved areas," including those in rural communities, Heim says.

She adds that still another section of the budget labeled "Primary Care" will receive an additional $290 million for health centers, many of which serve rural areas. The total sum for primary care goes from $2.08 billion to $2.498 billion.

"We're pleased with parts of this budget, because this is a pretty austere climate, an a lot of budget items are level," Heim says.

But the fact that primary care services in underserved areas will get a boost is encouraging. "We certainly represent doctors who provide most of the medical care delivered in rural areas. And this does show recognition by this administration that we need to build up the workforce of primary care so we can provide more healthcare and expand coverage for rural communities."

Healthcare programs for American Indians and Alaska Native communities also received a boost of an additional $354 million, totaling $5.4 billion.

This would "enable the Indian Health Service (IHS) to deliver quality care, ensuring that IHS services can be supplemented by care purchased outside the Indian health system where necessary, and funding health facility and medical equipment upgrades," according to the proposal.

There are other rural health segments that are being level-funded. Rural telehealth, which received a $4 million boost last year to $12 million, would remain the same, as would spending on rural hospital flexibility grants ($41 million), rural health policy development ($10 million), black lung disease clinics ($7 million), and research on diseases caused by radiation ($2 million).

In other portions of the budget, there is $5 million in grants to states to help federally qualified health centers and rural health clinics transition to a prospective payment system for the Children's Health Insurance Program.

Martin Kramer, a spokesman for the Health Resources and Services Administration, says outreach grantees can be small rural hospitals, nonprofit organizations or community health centers, and can receive grants to "try out their ideas to meet the goals."

Kramer adds that the money does not have to be focused solely on recruiting physicians, but can also be used to recruit other providers in rural areas, such as nurses, emergency medical technicians, oral health or mental health providers.

Additionally, the budget would increase spending for inspections in a way that is sure to affect rural clinics. Currently, survey and certification frequency for federal reimbursement is scheduled every 11.5 years, but the frequency would be cut in half, to every six years.

Other types of facilities would also have more frequent certification reviews and surveys: non-accredited hospitals would go from every five years to every three years. End-stage renal disease facilities, now reviewed every 4.6 years, would be surveyed every three years. And ambulatory surgical centers, along with hospices, outpatient physical therapy, outpatient rehabilitation, portable X-rays, and ambulatory surgical centers would go from surveys every 11.5 years to every six years.