Speaker 1 (00:05):

Welcome to Hospitals in Focus, from the Federation of American Hospitals. Here’s your host, Chip Kahn.

Chip Kahn (00:15):

Hello, and welcome to Hospitals in Focus. We appreciate your listening.

(00:20):

Healthcare in rural America is becoming a constant struggle. This means that care is difficult to obtain or just not available. A major factor is shrinking [00:00:30] ready access due to hospital closures or retrenching of services. Rural hospitals are feeling the brunt of workforce shortages and deep inflation. In this context, as the Federation of American Hospitals recognizes Rural Hospital Week, November 13th through the 17th, it is an opportune time to draw attention to the healthcare challenges faced by rural Americans and discuss potential solutions.

(00:59):

Joining me today [00:01:00] is Alan Morgan, longtime CEO of the National Rural Health Association. Thanks for being here, Alan.

Alan Morgan (01:08):

Chip, appreciate being back on the program again. And as always, I really appreciate your collaboration and leadership when it comes to rural health.

Chip Kahn (01:15):

Thank you so much, Alan. We really appreciate what you do and what your organization does for Americans.

(01:22):

And to get started in talking about this stress, I mean, the healthcare system in general, but particularly in rural areas is recovering [00:01:30] from the trauma of COVID, but the stress, particularly in rural America continues.

(01:38):

Can you give us a sense, from keeping your ear to the ground with your members, what’s keeping them up at night when they’re thinking of that important access to care for the people they serve?

Alan Morgan (01:51):

Thanks. That’s a great place to start with.

(01:53):

Yeah. It is always a challenge delivering care in a rural context. But since the COVID-19 [00:02:00] pandemic, it’s just gotten progressively worse. I got to tell you, workforce is a defining characteristic of rural America and workforce shortages. But the crisis we’re facing at this point for rural hospitals, workforce is the number one issue that our members are dealing with right now. And followed closely behind that, number two, is the financial pressures to keep the doors open on these facilities.

Chip Kahn (02:25):

In that light, talking about financial pressure, as you know, the US House [00:02:30] is considering cuts to outpatient hospital care, sort of under this notion of site-neutrality. My guess is that this one-size-fits-all approach to outpatient services would be an especially difficult cut for rural hospitals. Have you been following this issue? And in terms of impact, how concerned are you?

Alan Morgan (02:57):

Well, it’s amazing because, of all the [00:03:00] issues we deal with, this is potentially the most frustrating policy issue out there. And I say that because the site-neutrality proposal, it impacts urban and rural the same. Hospitals have higher operating costs, they have higher cost associated with the regulatory burdens they face. So, in that extent, it’s an issue for all hospitals.

(03:21):

But for rural hospitals operating on a margin, this just makes no sense. And I say that because in those hearings that have been talked [00:03:30] about this on Capitol Hill, the policy leaders [inaudible 00:03:34] by saying, “We love rural hospitals. We know they’re having a difficult time financially, and we want to do this proposal that’s going to reduce the reimbursement rates.” It just makes no sense from a policy standpoint whatsoever. None.

Chip Kahn (03:49):

In terms of Medicare, other than these discussions on Capitol Hill about reductions in outpatient payment, the other biggest factor that [00:04:00] I see out there is the growth of managed care in Medicare Advantage. And what surprised me, frankly, because from my old insurance days, I always assumed you needed a concentration of population, is that there has been rapid growth in MA, Medicare Advantage, not just in urban areas, but really in rural areas. And we’re already above 50% overall. And I know this is having a significant effect [00:04:30] on rural healthcare because so many of those in rural America are seniors and on Medicare.

(04:39):

What do you see as the effect on both hospitals and physicians trying to serve Medicare beneficiaries that are joining these MA plans? How well are they working out there in rural America?

Alan Morgan (04:54):

This highlights the point that rural healthcare policy is often the study [00:05:00] of unintended consequences. Like you, I think everyone was excited about the concept of expanding insurance coverage and options to patients across the US. And that was the stated goal, and I think that’s where we’d like to be. But in reality, what we’ve seen is Medicare Advantage plans operating within the context of the law have had a very detrimental impact on rural hospitals, whether it’s reduced reimbursement rates, [00:05:30] denial of service, and even just the advertising of benefits that in many cases don’t exist in certain rural communities.

(05:38):

I mentioned earlier that the top two issues, workforce, overall financial concerns, number three is Medicare Advantage and the impact on rural hospitals. So, this is a particular concern to our membership in this time, Chip.

Chip Kahn (05:51):

And as it affects rural hospitals, we get into an issue immediately of rural equity because urban [00:06:00] systems have weight in terms of dealing with managed care or whether it’s for Medicare Advantage or for private lines of business. But rural hospitals frequently don’t have that same kind of negotiating power, and they also are suffering in Medicare, as we’re saying, from wage issues and workforce issues.

(06:22):

What do you see as the key components, at least in the Medicare context, of an equity strategy? [00:06:30] I mentioned wage index as an issue, rural dish payment is an issue, and clearly we’ve long had what’s called the extenders low volume adjustment and the Medicare Dependent Hospital adjustment. What do you see for those programs moving forward in Congress? And how important are they?

Alan Morgan (06:54):

Well, they’re tremendously important. And it highlights the fact that both the federal [00:07:00] government and the state governments have to be good partners when it comes to healthcare with rural hospitals. Medicare and Medicaid, the account, and sometimes as high as 65% to 75% of the inpatient volume of these rural hospitals, as such, you have to have a good partnership.

(07:19):

On the topic of issues that I’m frustrated with, this every two years of having to go back to the well for these extenders, Medicare extenders, Medicare dependent hospital, [00:07:30] sole community hospital, it’s beyond frustrating. This needs to be permanent. It adversely impacts the forecasting for a membership in a rural community. I understand the politics behind this, but regardless, it’s just not good healthcare for our communities out there.

Chip Kahn (07:49):

A few years ago, Congress passed a law that allowed rural hospitals to be retrofitted, in a sense, to downsize or [00:08:00] right size into emergency rooms or really outpatient functions. That program has now gone into effect, and frankly, there hasn’t been much take up. And you mentioned earlier in our conversation that there is a lot of… I hope it leads to real action, but at least rhetoric about concern about rural healthcare when Congress has its… The House and the Senate have their hearings on healthcare.

(08:30):

[00:08:30] Can you give us a concept of what you think a framework would be that Congress and maybe CMS as the major implementer of active policy here, what would a framework look like that would make sense to really move us forward in terms of new federal policy to assure rural Americans that they have access to the care they need?

Alan Morgan (08:55):

Chip, you and I have been around the block a couple of times here and I wonder, do you [00:09:00] feel the same sense of déjà vu when it comes with the rural emergency hospital program and what we saw with the creation of the critical access hospital program that I do? It feels the same. I mean, that uptake of this program feels the same.

(09:14):

So, over the last decade, we’ve had 152 rural hospitals close. This year, we have that option, the, I guess, relief valve of the rural emergency hospital. And we’ve seen 14 hospitals [00:09:30] close their inpatient service and convert over to a rural emergency hospital. On one hand, this is great because it maintains that access point, but we have to acknowledge that we’re losing inpatient care. And at the end of the day, that’s a decreased access for rural communities on this.

(09:51):

I really think, going forward, as a nation when it comes to rural hospitals in particular, we need to make sure that we’ve got that 24/7 [00:10:00] emergency service available within 30 minutes or 30 miles. It’s not safe to be in a community without that. And however we frame that going ahead, it has to be access to timely quality care for rural communities. I think that’s going to necessitate both new provider types and also new payment types as well too, as we move more towards this value-based approach and how do we pay our clinicians and hospitals to keep their communities healthy and [00:10:30] out of the emergency room going ahead. And that’s a big transformation.

Chip Kahn (10:34):

Just to put those numbers in context, so 152 closures and the 14 conversions, what’s the total N right now in terms of the number of hospitals that you consider rural? I know Medicare has some designations of rural that are a little bit broader. But in terms of what you would say, in terms of your membership and real rural hospitals, what’s our total number [00:11:00] right now?

Alan Morgan (11:01):

Yeah, thanks for asking the toughest question of the day on that one, Chip. The federal government has 72 different ways of defining rural for their programs across the board, 72 different ways of calling something rural. From a hospital standpoint, there are roughly 2000 rural hospitals, so it’s about half of the nation’s hospitals are rural. You’ve got roughly 1200, close to 1200 critical access hospitals, [00:11:30] and then about 800 rural prospective pavement hospitals on that.

(11:34):

And as I mentioned, as we’ve alluded to now, we just have the very beginning of this new rural emergency hospital model. Where that’s going to end up? It’s really hard to say. I don’t think any of us expected the critical access hospital program to explode, but that certainly was a emblematic of the challenges faced in delivering healthcare. So, we’ll have to wait and see how this ends up.

(11:58):

But at the end of the day, [00:12:00] Chip, we have to focus in on maintaining access to care for these communities, not just because it’s the right thing to do, but also because it’s saves cost and transfers. And I think from a country and from a population standpoint, Congress has to be a good partner in this going ahead.

Chip Kahn (12:20):

As we wrap up, Alan, from all the work you do and talking to your membership, and maybe you’ve outlined it, but what would you say is the key message to Washington [00:12:30] in order of keeping that 2000 base as solid as we can?

Alan Morgan (12:35):

You have to back up and ask what is driving this? What is the rationale that both urban and rural people can join together on the importance of rural hospitals? And I have to be honest, it’s the population health. It’s the declining life expectancy we’re seeing among rural communities. And as we’ve seen this declining life expectancy among rural communities, you’re actually seeing, from the census department, [00:13:00] an increased population as people now can work where they want to and live where they want to. We’re finally seeing a migration back out to rural. Some of the fastest growing counties in the US are rural adjacent to urban. So, there’s a policy perspective that’s important, there’s a finance perspective that’s important. It’s just for our nation’s healthcare system, we got to do everything we can to maintain these access points.

Chip Kahn (13:25):

Alan, I just want to express my appreciation for all you do [00:13:30] in terms of one of the most important areas of American civil life, which is our rural sectors. And hopefully we’ll see an improving situation as we move into the future. Clearly, policy policymakers are continuing to focus on rural healthcare, and it’s important that it is a priority. I know it’s a priority with my members. Many of the members I represent provide either primarily or a good bit of [00:14:00] rural care in their hospitals and consider that one of their most important aspects of their mission.

(14:06):

So, with that, I just want to express my appreciation for your being on the line today.

Alan Morgan (14:12):

Chip, thank you so much. And I want to close by thanking both the Federation and your membership for the collaboration and the partnership in our advocacy and policy issues over the year. It’s just so nice to have such a solid partner in Washington DC.

Chip Kahn (14:27):

Great.

Speaker 1 (14:30):

[00:14:30] Thanks for listening to Hospitals in Focus, from the Federation of American Hospitals. Learn more at fah.org. Follow the Federation on social media @FAHHospitals and follow chip @ChipKhan. Please rate, review, and subscribe to Hospitals in Focus. Join us next time for more in-depth conversations with healthcare leaders.

Recognized as among the top 100 most influential people in healthcare by Modern Healthcare Magazine, Alan Morgan serves as Chief Executive Officer for the National Rural Health Association.  He has more than 30 years experience in health policy at the state and federal level and is one of the nation’s leading experts on rural health policy.

Mr. Morgan served as a contributing author for the publication, “Policy & Politics in Nursing and Health Care,” and for the publication, “Rural Populations and Health.”  In addition, his health policy articles have been published in: The American Journal of Clinical Medicine, The Journal of Rural Health, The Journal of Cardiovascular Management, The Journal of Pacing and Clinical Electrophysiology, Cardiac Electrophysiology Review, and in Laboratory Medicine.

Mr. Morgan served as staff for former US Congressman Dick Nichols and former Kansas Governor Mike Hayden. Additionally, his past experience includes tenures as a health care lobbyist for the American Society of Clinical Pathologists, the Heart Rhythm Society, and for VHA Inc.

He holds a bachelor’s degree in journalism from University of Kansas, and a master’s degree in public administration from George Mason University.