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Special report: Rural health at a crossroads

by Carol Ko, Staff Writer | December 27, 2013
From the December 2013 issue of HealthCare Business News magazine


This could have an outsized impact on hospitals that primarily serve elderly populations. “Many small rural facilities treat disproportionately high numbers of seniors. In some of these facilities, it’s 70, 80, 90 percent Medicare. If Congress doesn’t keep their Medicare reimbursement rate as it is, they would have to make up 19 percent of it from the private insurer payors they have, which is not possible,” says NRHA’s Elehwany.

One of the ironies of these cuts is that most rural facilities already conform to the cost-effective party line touted by proponents of health care reform. If you compare the same procedure in two urban and rural hospitals, it would be 3.7 percent cheaper to do it in a rural setting as compared to an urban setting. But why?

Rural hospitals typically only have primary care, which means they’re being reimbursed at a primary care rate rather than a specialist rate. “If you close that hospital and think, well, patients have to travel extra 30 miles to an urban facility, you’re making it difficult for a senior, but you’re also shifting costs to an area of care that costs more money for the taxpayer,” says Elehwany.

Even aside from these looming budget squabbles, sequestration and other reimbursement cuts have already dealt a heavy blow to rural facilities. Pullman Regional Hospital has had positive cash flow up till the last three years, during which they’ve been running in the red. “It’s getting harder and harder to see a way out of that,” says Febus.

“We’ve got a whole bunch of fires to put out,” adds Elehwany.

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