In the face of barriers to financial solvency, some rural hospitals are taking the initiative to improve access to care as they transition from inpatient services toward population health.
This article appears in the May/June 2019 edition of HealthLeaders magazine.
Name the most intractable problems of healthcare delivery in urban hospitals, and they are likely worse for rural hospitals.
Rural providers contend with a sparsely concentrated population that tends to be older, sicker, and poorer than urban residents. These providers often work in geographic isolation within a crumbling or nonexistent healthcare infrastructure, with fewer clinical support options and chronic staffing shortages.
Sixty million Americans—roughly 20% of the population—live in rural areas, according to U.S. census data, but only 11% of physicians and 16% of nurses practice in rural areas. Mortality rates are higher in rural America, too. Delays in emergency care due to transportation time to remote hospital emergency departments can often mean the difference between life and death for rural Americans.
In addition, few rural hospitals can rely on economies of scale, so they are left with higher costs and almost no leverage with health insurers.
These hardships have taken their toll. The University of North Carolina's Cecil G. Sheps Center for Health Services Research reports that 106 rural hospitals have closed since 2010.
In the face of these persistent barriers to financial solvency, some rural hospitals are taking the initiative, capitalizing on factors they can control to improve access to care as they transition away from inpatient acute care services and toward chronic disease management, population health, and value-based care.
These initiatives come as more attention is being given to social determinants of health. Rural hospitals are asked to contend with even more factors that occur outside hospital walls, such as the poor health outcomes associated with poverty, unemployment, poor nutrition, and lack of care access.
Margaret Greenwood-Ericksen, MD, an assistant professor of emergency medicine and a health services researcher at the University of New Mexico School of Medicine, says the intransigence of rural poverty is exacerbated by a lack of social services and community resources.
"And so hospitals might have to assume more responsibility and rural areas for addressing patients' social determinants of health because there really aren't community organizations like there are available in urban areas," Greenwood-Ericksen says.
"We're all moving towards fewer inpatient admissions," she notes. "The goal now in healthcare is to try to get patients home in a way that is safe and in a way where they feel supported. We need to be putting more effort and resources toward safely caring for patients and their families outside the hospital."
HealthLeaders spoke with two rural hospital executives who are working on rural healthcare delivery reform by using strategies that reduce inpatient beds and concentrate resources on preventive care and population health.
Atrium Health thinks small
When it was time to think big and replace the 52-bed Hill-Burton-era Anson Community Hospital in Wadesboro, North Carolina, management at Carolinas HealthCare System (now Atrium Health) went small.
"We had a very rural hospital that was at the end of its useful life, and we realized that the model of care wasn't sustainable from our financial model," recalls Mike Lutes, president of the southeast division at Charlotte, North Carolina–based Atrium Health.
"We were losing about $8–$10 million a year. But more importantly, the health outcomes for the community weren't very good. Out of 100 counties in North Carolina, we were about 94th for staying healthy," Lutes says.
The health system found itself in a predicament, chained to a money-losing, obsolete hospital using an outmoded acute care model for a dwindling daily census of between three and five inpatients.
But Atrium couldn't just walk away. The aging Anson Community Hospital was the only access to acute and emergency care for a region already struggling with the effects of chronic illnesses such as diabetes, obesity, and cardiovascular disease.
"So we're here with outcomes that weren't very good, but we didn't want to leave this rural community. We wanted to make sure this community had access to high-quality healthcare. We thought we were the right system to do it. And quite honestly, since we are a mission-driven organization, we realized that if we left this rural community, there wasn't anyone else that was going to come in behind us," Lutes says.
Building a new model
Rather than leave the region as a healthcare desert, Atrium Health rethought the care model from the ground up.
The health system built a $20 million, 43,000-square-foot hospital that is as much a hub for a medical home with primary and population health services as it is a provider for acute, inpatient care, and emergency services.
"To really embed this medical home, we needed to have a new facility. We wanted something that was financially sustainable for the community for a long period of time and that allowed us to focus on health outcomes," Lutes says.
The new Atrium Health Anson hospital opened in mid-2014, and it's about half the size of the old community hospital. It has 15 inpatient beds, a 24/7 emergency department with a trauma room, and adjacent dedicated spaces for primary, specialist, behavioral health, and ancillary services.
"What really makes our model work is that we co-embedded this medical home inside the ER," Lutes says. "If you go inside our ER, it's fairly large, with 10 ED bays. There's about 13 bays that we considered to be part of our medical home, with a combination of physicians and advanced clinical practitioners."
There is also a pharmacist, a patient navigator, a behavioral health specialist, and a social worker on staff to provide "wraparound services," such as referrals to community partners.
"We realized that 40%–60% of our cases that utilize the ED could really be seen in a primary care office. We wanted to break that vicious cycle that really all hospitals have, but particularly rural hospitals," Lutes says. "They'd have an underlying chronic condition. [Patients would] come through the ED, we'd treat their condition, but then three days later, they'd show up in our ED because they've never had their chronic condition addressed."
"With our new model of co-embedding the medical home inside the ED, we have patients do the medical screening and then we transition them to the appropriate setting," he says. "We're finally addressing the underlying chronic disease rather than their just reappearing in our ED."
Providing wraparound services
Last year, Atrium Health Anson transitioned about 2,700 of its 15,000 ED patients into the medical home for more comprehensive, preventive disease management. The medical home recorded 13,000 patient visits. As a result, health outcomes have improved, including decreased incidences of cancer, obesity, COPD, and heart failure.
"It's really just having these wraparound services and getting these patients to the right care,"
Atrium Health Anson also relies on telemedicine for stroke and cardiac care, and for overnight inpatient care.
"It's allowed us to bring specialists into the community that, quite honestly in a rural community of 26,000, you just wouldn't have," Lutes says. "With the virtual component, we've been able to bring specialists to the patients that they would have otherwise had to drive 45 minutes for."
Beyond the hospital walls, Atrium Health Anson has developed relationships with local charities, churches, and civic organizations in Wadesboro to sponsor screenings for diabetes, high blood pressure, and other chronic diseases, as well as promoting better nutrition and encouraging discussions about healthy living.
The hospital also uses analytics to determine which home addresses in the county are more inclined to use ED services, or which addresses don't use primary care. Often, they're the same areas. Only about 19% of county residents say they have a primary care doctor.
The hospital sends a mobile clinic to these "hot spots" to facilitate access to care, and uses the patient interactions to encourage residents to use the medical home.
"We can capture them and start addressing a chronic condition," Lutes says. "We're very strategic with how we use our services to make sure we're meeting the needs of the community."
'Enough of a profit'
In addition to improving efficiency and outcomes, Atrium Health Anson has also turned things around financially, although Lutes won't provide exact details.
"What I can tell you is we're making enough of a profit that we can continue to reinvest the capital program expansion," he says. "The hospital has been open now for five years this July, and it is a financially sustainable model. But more importantly, the health outcomes of the community are improving."
Lutes reflects on the proven sustainability of Atrium Health Anson with pride.
"It's a great story to go into a community and build a new hospital. There's just not many health systems that would do it," he says. "This is probably the most rewarding thing I've done in my career just because if we didn't do it, no one else was going to do it."
Marshfield Clinic considers its options
Marshfield Clinic Health System finds itself today in much the same place as Carolinas HealthCare did several years ago.
A relative newcomer to inpatient care, Marshfield Clinic will either revamp the decades-old, 25-bed Marshfield Medical Center—Ladysmith (until last year known as Rusk County Memorial Hospital) or start from scratch and build a new $35 million hospital.
"Right now, we're looking at all of our options. But one of the options we're looking at is building from the ground up to create, probably an overused term, a hospital of the future," says Susan L. Turney, MD, CEO of Marshfield Clinic, a seven-hospital, nonprofit integrated health system based in Marshfield, Wisconsin.
Whatever venue emerges, it will provide a different care model for the 14,000 citizens of Rusk County, located over 200 miles northwest of Madison.
Shifting to population health
Like Atrium Health, the emphasis at Marshfield—Ladysmith will shift from inpatient care toward a population health model that proactively manages chronic health issues in the region, such as diabetes, heart disease, and obesity, in an outpatient or virtual setting.
"We realized, as the world has changed in the external environment, it has put a lot of pressure on delivering efficient affordable care, access to care, and a great patient experience," Turney says.
The emphasis on outpatient care is a natural fit for Marshfield Clinic, which formed in 1916 as a private, physician group medical practice.
"Because we haven't been in the acute care space until the last couple of years, we have had a lot of innovation around taking care of patients differently to keep them out of the hospital or to take care of patients who need to be in the hospital in alternative sites," Turney says.
"We can care for patients closer to their homes. We can make sure that we have all the critical pieces of the healthcare puzzle working in concert, if we added acute care to our integrated health system," she says.
As part of an effort to further improve access to care in rural Wisconsin, Marshfield Clinic in May announced that it was in merger talks with La Crosse, Wisconsin–based Gundersen Health System.
"This merger would give us an opportunity to combine the unique strengths of our systems to become the preeminent rural healthcare organization in the country," Turney said in a press release related to the merger news.
A focus on outpatient care
That doesn't mean inpatient care is going away. It's just not going to be the central focus of Marshfield Medical Center—Ladysmith. The challenge is in determining where to place scarce resources.
"Until we can prevent every disease, people are going to have acute care needs," Turney says. "They're going to have trauma. They're going to have premature babies who are going to need intensive care. We're going to need some services that are just risky enough that they need to be provided in that acute care setting. I don't see that going away."
One of the biggest challenges Marshfield Clinic faces is determining exactly what inpatient services should be provided at the reconfigured Ladysmith hospital.
"That's a tough question because every community that we're in will be a little bit different, just because of the patient demographics and what access our patients have to the other facilities," Turney says.
"Certainly OB care is a real struggle in rural communities, so that's something we have to have up front and center," she says. "Then, we think about the major types of medical conditions, treating the chronic diseases like heart disease, diabetes, chronic degenerative joint disease. So, orthopedics, cardiology, and endocrinology are going to be in there."
In addition to ED access, Turney says Marshfield anticipates a focus on geriatric outpatient and ambulatory services, given that the patient mix in rural areas tends to be older, less affluent, and facing multiple chronic conditions.
Marshfield's home recovery care program uses telehealth to facilitate physician visits from the patient's home, Turney says, providing care in a lower-cost environment and "right-sizing the hospital for the future so it allows us to think differently and to do differently."
In another money-saving initiative, Turney says Marshfield has been "very aggressive moving patients out of the hospital into our ambulatory surgery center."
"Because we have built skilled nursing facilities and because we have our health plans, we have been able to extend recovery postoperatively because of our health plan for our Medicare Advantage and commercial population," she says.
As a result of that, Turney says, the only orthopedic procedures that are managed in the acute care setting are joint revisions and trauma.
"Every other orthopedic procedure is being done in the ambulatory surgery center," she says. "We've adjusted that really good care of patients in our communities. You can also see that the demand for the number of beds is going to be very different in the future than it is right now."
By partnering with Marshfield's health plan to bundle the services with a skilled nursing facility, the health system reduced the cost of care by 25%.
"Paying less for those services eventually turns into reduced premiums, and we also know that our patients are paying less out of pocket. That's a win-win-win. And they have incredible outcomes, with fewer readmissions and fewer ER visits," Turney says.
The focus on outpatient settings means that Marshfield is getting less reimbursement from Medicare, but Turney says providing value-based care has to be a priority.
"We decided that we're going to move care from the hospitals, which we now own, into the ambulatory surgery center, and we knew we were going to get paid 25% less," she says. "The objective here really is assessing what's best for your patients and your community and then figure out how to manage it."
"These are struggles because the financial vitality of organizations is dependent on getting paid for the services you provide," she says, "so when you make a conscious decision to decrease the revenue stream, you have to manage differently."
Can the model be financially sustainable? Turney believes so.
"There are many services that we provide that are not going to break even in the way reimbursement is today, yet it's extremely important to have those services," she says. "A good example would be behavioral healthcare."
"So we have the opportunity to really spread our risk throughout our enterprise," Turney says, "but it does take a lot of work to optimize services, optimize resources, and really be as efficient and effective as we can, so that the care is affordable and accessible yet we're also able to continue as a business."
“We realized that if we left this rural community, there wasn't anyone else that was going to come in behind us.”
Mark Lutes, Atrium Health
John Commins is a senior editor at HealthLeaders.
Photo credit: Illustration by Adria Fruitos
Resource-strapped rural hospitals contend with factors outside hospital walls, including outcomes associated with poverty, unemployment, poor nutrition, and lack of care access.
An innovative program at Atrium Health Anson has transitioned 2,700 of its 15,000 ED patients into the medical home for more comprehensive disease management.
Marshfield Medical Center—Ladysmith is shifting from inpatient care toward a population health model that proactively manages patients' chronic health issues.