Report: Re-examine value-based care models to better include rural providers

A sunset over a barn structure
Rural providers have unique needs, so a "one-size-fits-all" health policy may not work. (Getty/ehrlif)

Cash-strapped rural hospitals would benefit from more flexibility in how they create and fund the services they provide, according to a new report. 

Rural communities are in crisis, with a third of rural hospitals in the U.S. at risk for closure. Eighty-two facilities have closed since 2010. Hospital officials blame reduced reimbursements as the reason for closures, and federal budget cuts now threaten safety-net hospitals that serve rural communities. 

RELATED: Rural health crisis deepens: Alabama hospital slated to close, legislation may force others to shut their doors


Driving Engagement in an Evolving Healthcare Ecosystem

Deep-dive into evolving consumer expectations in healthcare today and how leading providers are shaping their infrastructure to connect with patients through virtual care.

But there may be a way for rural healthcare to survive. The Bipartisan Policy Center and the Center for Outcomes Research and Education surveyed more than 90 national thought leaders to develop focus areas for improving rural healthcare. The survey focused on the state of rural care in seven Midwest states: Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota and Wyoming. 

Those conversations led to four specific areas that the report found can help rural healthcare providers stay afloat and improve the care they provide: 

  1. Rethink services. Not all rural providers need to be critical access hospitals, the report found. Health policies need to offer providers in rural areas the flexibility to tailor the services they provide to the needs of the communities they serve.
  2. Adapt funding mechanisms and payment models. Rural providers face unique challenges, like a small patient pool and high operational costs, that the government should account for in reimbursement models.
  3. Nurture the primary care workforce. The healthcare workforce in rural communities should reflect the complex physical, behavioral and social needs of their members, the report noted. Once services and funding appropriately fit a community's needs, policies can help take steps to support the workforce to meet those needs.
  4. Continue to grow telemedicine. Telehealth services can not only increase patient access but can provide a support system for physicians who may work in remote areas. 

"These issues do not exist in isolation—they are interdependent and build off of each other," the report says. "The nation cannot fix just one part of rural healthcare; the whole system needs to be addressed." 

RELATED: Rural health crisis escalates: Sometimes there's only 1 doctor in town (if you're lucky) 

Another problem: The small patient population can hinder the transition to value-based care, according to the report. For example, the survey found in South Dakota the Average Daily Census—or the number of patients visiting per day—was about five people for critical access hospitals. 

With a patient pool that small, quality metrics, upon which reimbursement is based for value-based care models, can be skewed and misleading, the report found. This can make it hard for rural providers to participate in new payment models at all, especially in the case of accountable care organizations. 

In addition to re-examining quality metrics to reflect the realities of rural healthcare, policymakers can improve their ability to participate in value-based care models by facilitating networks and partnerships with larger providers, the report suggests. These unions can allow smaller providers to build economies of scale and more easily transition into new payment models, like ACOs. 

Legislation backed by the National Rural Health Association and other groups aims to get rural providers "on the ramp" to value-based payment, according to the report.

Suggested Articles

Banner Health has continued to experience financial headwinds, posting a $57.2 million loss in the first nine months of the year.

A major physician group is urging the Centers for Medicare & Medicaid Services to continue allowing for audio-only patient visits under COVID-19.

Trinity Health posted a $112 million operating income for Q3 as lower expenses and a better payer mix helped offset volume declines.