If urban hospitals’ fiscal health is in need of some outpatient care management, rural hospitals are in the ICU, on life support. Strong doses of telehealth consults and facility optimization are needed, and stat.
Rural hospitals face the same headwinds as their urban counterparts, only more so. Kaufman Hall research shows average hospital operating income has been stuck at negative 3% all year. Expenses are high, a result of labor shortages that aren’t going away, as well as supply chain difficulties and an influx of more acutely ill patients who had postponed needed care.
It’s way more troubling in the countryside. A report by the Bipartisan Policy Center finds that out of 2,176 rural hospitals, 441 are facing three or more financial challenges that put them at risk of service reduction or closure. Those include having negative total operating margins, negative operating margins on patient services alone, negative current net assets and negative total net assets. Over 900 rural hospitals face two or more risk factors, while 173 hospitals face four.
The reason many rural facilities haven’t closed already is they have been the recipients of a stream of billions of dollars in federal relief funds from the COVID-19 stimulus bill. That funding is disappearing.
Most rural hospitals were built under the Hill-Burton Act 50 to 60 years ago when smaller towns needed a level and volume of care that they cannot sustain now. Residents of rural communities tend to be either very old or very young, and these communities often have higher rates of uninsured and Medicaid and Medicare patients, leading to more uncompensated and under-compensated care. Throw in the ascendance of managed care and an increased focus on outpatient services, and you get are overstaffed and underutilized hospitals. According to research, the average rural hospital has 50 beds and 321 employees, but a daily census of just seven patients.
Making things worse, many of these facilities are designated as Critical Access Hospitals, meaning they are required to provide a certain number of inpatient beds along with an emergency room. Those requirements often force hospitals that could still be turned around to close instead.
So what to do? One answer is hybrid care. This brings together the best of telehealth and in-person treatment. It relies on technology for video conferencing, remote patient monitoring and change management for optimum implementation. It allows facilities that need to keep a certain number of beds available to do so.
Through this approach, specialist physicians and expert nurses consult virtually, so patients aren’t waiting for hours or days for diagnosis and less experienced staff get the knowledge of clinicians with better training. Hybrid care reduces unnecessary patient transfers outside the service area. Remote monitoring of patients increases adherence to care plans. Care is more convenient and accessible.
There is government funding for rural telehealth through the Health Resources and Services Administration to improve care for rural and medically underserved people. HRSA’s Office for the Advancement of Telehealth promotes the use of this modality through grants for healthcare delivery, education and health information services while building the evidence base for telehealth.
In August 2021, HRSA awarded more than $19 million to 36 award recipients to improve telehealth in rural and underserved communities. It expanded its funding for 2022. The Telehealth Network Grant Program’s current cohort is aimed at promoting 24-hour emergency department consultation services via telehealth to rural providers that lack emergency care specialists.
The Telehealth Centers of Excellence Program examines the efficacy of telehealth services in rural and urban areas and serves as a national clearinghouse for telehealth research and resources. The purpose of this program is to assess specific telehealth uses; operate as incubators to pilot, track and refine telehealth; examine the efficacy of telehealth services in rural and underserved areas; and explore new telehealth applications.
By partnering with Critical Access Hospitals, rural health clinics and Federally Qualified Health Centers, HRSA hopes to demonstrate how telehealth programs and networks can improve access to healthcare services to areas with high rates of poverty and chronic disease.
What is so great about these efforts is that the focus is not just on the technology and direct-to-consumer apps. I am seeing technology companies run into roadblocks to achieving promised goals because they are not offering the human expertise that makes telehealth work as a care delivery modality. To borrow a phrase from Michael Jordan: “It’s not about the software.”
I think people-focused telehealth will help us through the thorny thicket we find ourselves in in healthcare today everywhere. For rural hospitals, it may be the path to survival.