Rescue For Rural Hospitals A Healthy Move Forward


Given our entrenched political and regional differences, Pennsylvania teamwork tends to conjure thoughts of sports rather than governance.

Frustrated citizens, commentators, and advocates believe that Pennsylvania rarely embraces substantial reform or change.  In their view, our state moves only in dire crisis, and even then only once the patches have blown and the cans have been kicked down the road.  Granted, the state slogan could well be: Tradition Is Us.  Not hard to find people who regard progress as the handiwork of communists and demonic forces.

Fortunately, the record is not as bleak as the reputation suggests.  Significant improvements in policy and direction fly under the radar because there is no outcry, no controversy, no denunciation that heathens are storming the gates.

Headlines in past months about the bankruptcy filings for Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia brought home again the serious financial problems afflicting many major health care institutions.

Most people perceive hospitals as big budget operations, with big billings and a steady stream of patients.  They are too big to succumb to afflictions such as excessive mandates, escalating costs, or lagging reimbursements.  The quick assumption when a hospital shuts down is incompetent management ran it into the ground, or some outside investor plundered the profits and left it for creditors to pick the carcass.

Just as readily, communities can take their hospital for granted, despite warning signs and cautionary notes.  Those conversant in the complications and cures for health care realize the causes for closure of a hospital are complex and compounding.

A hospital is a major employer, a significant contributor to the welfare of the community, and a large provider of uncompensated care.  These pluses far outweigh any minuses when calculating what a hospital means to the future of an area.  Nevertheless, appreciation does not necessarily equate to supportive funding or helpful policy.

Hospitals undergo intensive scrutiny these days, with patient safety at the heart of oversight.  Accountability measures typified by the reports issued by the Pennsylvania Health Care Cost Containment Council provide useful information for elected officials, regulators, and the public.  To correct identified deficiencies will drive up costs, but few will dispute the value of that spending.  Procedures and technology advance in tandem.  Telemedicine is growing in practice, to improve care and overcome access limitations imposed by distance, weather, and strained budgets.

Rural hospitals have been an acute trouble spot for some time.  Serving areas with aging populations, job losses, and technology deficiencies, administrators find it extremely difficult to keep current with facilities and equipment, retain and attract enough professional practitioners, offer the fullest range of services, and balance the books.  That does not mean their fate should be left to Darwinian survival of the fittest.  A number have been designated critical access facilities to underscore how vital they are to home communities and surrounding areas.

Reliable reports show half of rural hospitals running a deficit, rendering them at risk for closure.  In small communities, closure is catastrophic.  From the standpoints of health care and the general economy, recovery is a perilous and prolonged process.  The ultimate shame is that closure is a self-inflicted wound.

This is backdrop for the emergence of an especially innovative project, the Pennsylvania Rural Health Initiative.  There is serious thought put into this, the result of uncommon collaboration between hospitals and health systems, federal and state officials, and four big health insurers.  These groups are heavily criticized for the problems and shortcomings of health care.

Consultation between state officials, hospital interests, and health care payers is remarkable.  It evidences the kind of trust rarely extended across the political divide.  The feds are major, indispensable players, with the U.S. Centers for Medicare and Medicaid Services kicking in $25 million to underwrite the launch.

In broad concept, this will provide participating hospitals with a predictable budget.  Administrators can then plan for providing treatment within the hospital and preventive care in the community.  This reduces the cost of care in meaningful ways, catching conditions and intervening before they become critical and require hospitalization, and limiting the number of people who use the emergency room as their point of routine care.  This approach accommodates the variable number of patients, the peaks and valleys of emergency care, and the typically too low government reimbursement rates.  It enables accelerated and expanded community outreach.  Beyond the details, there is an important principle woven into this approach.  Cost control is more likely to result from innovative practice than through government mandates built on theory.

Five rural hospitals – Barnes-Kasson County Hospital, Endless Mountain Health System, Wayne Memorial Health System, Geisinger Jersey Shore Hospital, UPMC Kane Community Hospital – have been chosen as pilot facilities.  When the kinks are worked out and the approach is certified as workable, there may be as many as thirty institutions shifting over to the model.

Health care economics warrant remedies for the lack of broadband capacity in parts of the state.  Whether this comes through a comprehensive package along the lines of Restore PA, or a separate dedicated measure, is irrelevant.  The key point is timing and adequacy of funding.

The word transformative has risen in popularity to nearly match reform in political appeal.  Reviving rural hospitals dramatically departs from standard thinking and practice.  It bears great potential for transformative reform, if officials can resist the impulse to demand instant results and instead show the patience to get things right.

There is an important footnote on this issue.  It has become second nature in modern politics to disparage and demonize special interest groups.  But in this sort of out-of-the-limelight issue, the technical and skilled intervention and advocacy of a reputable outfit – the Pennsylvania Hospital and Healthsystem Association – shows its value to greatest advantage.

David A. Atkinson is an Associate of the Susquehanna Valley Center’s Edward H. Arnold Institute for Policy Studies.

Nothing contained here should be considered as an attempt to aid or hinder the passage of any legislation before the General Assembly.

The views expressed here are those of the author and not necessarily those of The Susquehanna Valley Center for Public Policy.