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Urban health - big cities, big challenges

by Lisa Chamoff, Contributing Reporter | December 16, 2014
From the December 2014 issue of HealthCare Business News magazine

“A small change would manifest as a closure there,” Holmes says. “States that have not expanded Medicaid have seen a larger portion of their hospitals close. We don’t know if it’s the Medicaid expansion or the region.” Medicaid Disproportionate Share Hospital (DSH) Payments have also been dialed down, and that’s squeezing hospitals further, Holmes says.

In addition, a recent report by the U.S. Department of Health and Human Services’ Inspector General found that because of the system that Medicare uses to calculate coinsurance amounts for beneficiaries receiving outpatient services at critical access hospitals, patients paid between two and six times the amount than they would have paid for the same services at acute care hospitals.

“Right now, Medicare is getting a bargain,” Slabach says. “They’re paying a lower portion for critical access hospitals and calling on the patient to pay the difference.” The primary care physician shortage has also hit rural communities particularly hard. Slabach says his organization recently started working on expanding the number of rural training tracks for primary care doctors.

“We have seen increased matches in terms of fill rates for these resident training programs,” Slabach says. “We think this is a really good sign before we have the data.” Lutes, of the Carolinas HealthCare System, says that historically, Anson County has had a revolving door of physicians. With the new model, there is a primary care team of five providers, and four are from Anson County. They have also brought the family practice residency program to the Wadesboro facility.

Higher costs, bigger cuts
Some of the biggest challenges that rural hospitals face are the high costs that come with investing in electronic health records systems and avoiding meaningful use penalties.

“It’s harder for hospitals in rural areas to invest in this technology,” especially if they don’t have the same volume, says Priya Bathija, senior director of health policy at the American Hospital Association. According to the National Hospital Discharge Survey data, 64 percent of rural hospital inpatients had no procedures performed while in the hospital, compared with 38 percent of urban hospital inpatients.

There have also been budgetary threats from proposed Medicare cuts. For example, President Barack Obama’s fiscal year 2015 budget proposed to reduce critical access hospital payments from 101 percent to 100 percent of reasonable costs and to eliminate the CAH designation for hospitals that are less than 10 miles from the nearest hospital. The Center for Medicare and Medicaid Services recently indicated that it will begin more tightly enforcing the 96-hour rule for critical access hospitals, requiring physicians to certify Medicare and Medicaid patients will not be there more than 96 hours, or face loss of reimbursement. “There’s sort of a barrage of threats,” Bathija says.

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