You can blame people my age–the fabled baby boomers. According to a new report by the Wisconsin Hospital Association (WHA), “100 New Physicians a Year: An Imperative for Wisconsin,” we will be 2,200 doctors short by the time baby boomer retirees finally slow down around the year 2030. Their complete report is available at htpp://www.wha.org .

Senator Tom Coburn (an Oklahoma Republican) speaks for many when he said he understands the need to be careful when scaling back government spending. As he told Fox News, “to continue to waste $350 billion a year in the federal government, that’s pure waste or fraud or duplication.”

Waste is often in the eye of the beholder. From my point of view, a strong rural health system is not “waste or fraud or duplication.” America’s rural hospitals are the foundation of health care being local, not just urban. America’s rural hospitals are often at the center of a rural community’s economy. Weakening or eliminating rural hospitals weakens or eliminates local access to health care and local jobs.

I am hopeful that Senator Coburn and other Members of Congress from both parties remain solidly behind rural hospitals. But it is clear that the debt crisis is fertile ground for the surfacing of longstanding anti-rural bias and or plain misunderstandings. In particular, rural hospitals seem to be in the crosshairs from a variety of directions.

After decades of trying to make an urban-based model of Medicare funding for rural hospitals work, Congress created the Critical Access Hospital program to create a stable network of rural hospitals throughout rural America. That success is now being threatened by a variety of proposals, ranging from eliminating some hospitals, across the board cuts or eliminating the entire program.

There is a risk of rural communities being divided from one another, seeing less threat in one proposal versus another. I can only say that when your house is threatened by fire, it’s not the time for talking about which parts to protect and which to let go.

We know that most rural hospitals are financially just holding their heads above water. Under-payment by government programs has left them vulnerable. A sluggish economy and an increasingly competitive health care marketplace are taking their toll. Medicare and Medicaid are rural hospitals’ largest payers. Additional cuts are likely to tip many rural hospitals into the red and eventual closure.

No one knows what is going to happen in Washington over the next few months. As the Serenity prayer teaches us: we need to have the courage to act, the patience to endure and the wisdom to know the difference. I hope for most of you, you will find this a time to act.

Go to www.contactingthecongress.org where you can easily find the phone, email and fax information for your Senator and Representative. Let them know of your deep concern for the future of rural hospitals and that you are asking them to stand with you and fight to protect that future for rural America.

“When your house is threatened by fire, its not the time for talking about which parts to protect and which to let go.”

As my house is within walking distance of four hospitals in Madison, Wisconsin that have benefited by Medicare policies favoring urban based providers for over forty years, I am not willing to throw the “Ten Milers” (Critical Access Hospitals within ten miles of another hospital) to the wolves–we are either for CAHs or we are not. This is not the time to talk policy.

CAHs and rural health are not so much a target as at risk of becoming collateral damage as the “Titans” battle over the role of government and their own partisan political futures.

As a practical matter we are most likely to see a dead-locked Super Committee and the 2% sequestration take place.

This is a just one chapter in a longer term fight to protect the hard fought gains of the the last twenty-five years.

The President’s proposal, as a whole, is obviously “dead on arrival.” We need to push back broadly as bad ideas are put in circulation from various sources.

Below is a summary I did for the RWHC Board re NRHA’s excellent counter to the House Ways and Means Health Committee Minority staff’s circulation of the CBO option of putting CAHs back into PPS.

We have our work cut out for us–this is not a moment of nuanced negotiation but standing united for all rural hospitals.

Be well.

Text of NRHA Response to Policy Options Sent to the Super Committee by House Ways & Means Committee Democratic Staff

TS: 9/28/11

Background

The Congressional Budget Office released a report in January 2011 outlining “possible sources of savings in mandatory programs.” This huge compendium of any and all options included an analysis of abolishing all rural hospital payment programs—CAH, SCH, MDH. CBO estimates that this would save $62.2 billion over 10 years; $3.8 billion in 2012 increasing to $9.5 billion in 2021.

From the Commonwealth Fund (reported 9/7/11): “The House Ways and Means Democratic staff has prepared a list of possible cuts to the Medicare program totaling more than $500 billion over 10 years, according to documents obtained by CQ HealthBeat. Sarah Baldauf, a spokeswoman for California Democratic Rep. Pete Stark, the top Democrat on the Ways and Means Health Subcommittee, said the cuts are for “internal” use and that the list does not represent an endorsement of such reductions. The list is being circulated among Democrats to prepare them for possible cuts that will be considered by the Joint Committee on Deficit Reduction.”

NRHA Response to House Ways & Means Minority Staff List of Policy Options

“Elimination of rural hospital designations will annihilate the rural health care safety net and access to care in rural America. Recent recommendations to the Joint Select Committee on Deficit Reduction erroneously claim that these designations and their accompanying payment formulas discourage efficiency and value in health care. This is simply untrue. Many rural counties where Critical Access, Sole Community and Medicare Dependent Hospitals are located rank in the bottom quartile in Medicare spending. Furthermore, hospitals carrying these designations care for 16.4% of all Medicare hospital patients while receiving only 12.4% of the total Medicare hospital budget in payments (note that these figures are adjusted for case complexity to reflect net patient days).”

“The true purpose of these payment formulas is to prevent hospital closures. During the 1980s and early 1990s, 360 rural hospitals closed and rural Americans lost access to health care. These hospitals struggled to maintain financial stability under the urban-centric Medicare Prospective Payment System because of their small size and unpredictable patient mix. In response, Congress created the Critical Access Hospital (CAH) designation. This designation was designed to prevent hospital closures by allowing CMS to pay CAHs for inpatient and outpatient services on the basis of reasonable costs. This allows for more flexible staffing options relative to community need, simplifying billing procedures and creating incentives to develop local integrated health delivery systems, including acute, primary, emergency and long-term care. Sole Community Hospital and Medicare Dependant Hospital designations were created for the same reasons.”

“Forcing rural hospitals into a prospective payment system modeled on care in urban environments is completely unsuitable for the rural delivery system, will lead to hospital closures, and will compromise access for millions living in rural areas. This is an unacceptable result. NRHA and its 22,000 hospital, physician, practitioner and patient members call on you to protect the rural health care safety net. It is vital that you oppose any and all efforts to decimate the rural delivery system.”

We all are at risk from those politicians more concerned about looking tough than solving our country’s problems.  Medicare and Medicaid are on the chopping block, but it is not just the elderly and poor who may be harmed.

Washington has created a new “super committee” to find more cuts. Some call it a super Congress to remind us this is a small group given powers usually kept by Congress. Most economists say Washington needs a coherent policy for both additional cuts and additional revenue. But politics seems to have taken new revenue off the table. Most people believe the super committee will deadlock.

If Congress fails to act, cuts will be implemented across the board. Most federal programs will be cut. Across the board cuts harm efficient programs along with the inefficient. Across the board cuts harm necessary along with the less necessary. The country deserves better than bulldozers driven by blindfolded drivers.

Most rural hospitals are financially just holding their heads above water. Under-payment by government programs has left them vulnerable. A sluggish economy and an increasingly competitive health care market place are taking their toll. Medicare and Medicaid are rural hospitals’ largest payers. Additional cuts are likely to tip many rural hospitals into the red and eventual closure.

A national study from the University of North Carolina in 2006 showed that in communities with just one hospital, its closure reduces average per-capita income by 4 percent. Local unemployment rates were also shown to go up by nearly two percentage points. Both effects are due to the loss of hospital jobs and local purchasing as well as the downstream economic impact of those losses.

Bottom line: closing a rural hospital has the economic impact of a 4% tax increase.

When a community loses its hospital, it is also at high risk to lose physicians. But it is just not patients who lose. According to the Federal Office of Rural Health, each primary care physician lost means the loss of 23 other local jobs.

Does any of this save the federal government money? Not likely. If a rural hospital is forced to close, Medicare and Medicaid will continue to pay for part of the health care. They just don’t pay in the rural community. Patients are forced to travel to urban hospitals. Local jobs soon follow. Urban hospitals will spread their costs over more patients. But the federal deficit is largely unaffected.

So what is to be done? Rural hospitals expect the federal government to hold us accountable, like any payer. We understand that to better do it, we will have to work harder and smarter.

We can reduce rural hospitals’ share of the debt by following the Triple Aim long promoted by the non-partisan Institute of Health Improvement. “Improve the health of the population; enhance the patient experience of care (including quality, access, and reliability); and reduce, or at least control, the per capita cost of care.”

Congress needs to stop the bomb throwing. Congress needs to start the hard work of finding common ground for our country’s problems. We need government that works with rural hospitals to serve America’s older, poorer and less healthy communities.

http://www.youtube.com/watch?v=lF8bK7AJyL0

http://www.youtube.com/watch?v=ULy5vjcGuDc

From a March 31^st Press Release from the Centers for Medicare & Medicaid Services (CMS): “CMS, an agency within the Department of Health and Human Services (HHS), proposed new rules under the Affordable Care Act (ACA) to help doctors, hospitals, and other health care providers better coordinate care for Medicare patients through Accountable Care Organizations (ACOs). ACOs create incentives for health care providers to work together to treat an individual patient across care settings–including doctor’s offices, hospitals, and long-term care facilities. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary.”

According to the widely respected Deloitte Analytics Institute in an April 4^th Health Care Reform Memo: “The ACO is one of several programs in the Accountable Care Act that advance clinical integration and physician-hospital alignment. The common thread running through episode-based payments, value-based purchasing, the medical home, avoidable readmissions, and ACOs is clinical integration in an organized delivery system that is capable of taking risk for results—cost savings, outcomes, and service delivery. The ACO is not for everyone.”

Personally, I believe those of us in rural health need to sit back, take a few deep breaths and put the Program into perspective. As written, ACOs are unlikely to attract much rural participation. Neither ACA nor CMS see it as immediately relevant to all situations or the only model that needs to be tested. As this model further evolves, rural providers need to focus on developing the core competencies related to care coordination and not get distracted by trying to become an early adopter of an urban-centric set of federal incentives.

The current CMS ACO proposal fails to recognize the uniqueness of health care in rural communities. Unlike in most urban communities, there are usually not enough providers in rural communities to support multiple ACOs having closed primary care provider networks competing with each other. Many rural communities are located in areas that will have the potential for overlapping ACOs with multiple urbanbased networks. To retain local access over the long run, rural communities will need local providers to be able to offer their services to these multiple ACOs. CMS needs to develop criteria that support this approach by allowing both affiliated and independent local rural providers to participate in multiple ACOs and requiring ACOs to meet strong access standards.

Here are a few ACO paramount strategic issues from a rural perspective:

How do we promote collaboration between urban and rural while respecting the competitive model inherent in regional ACO development? I believe we need to propose that CMS develop a rural model in addition to their current urban centric model. The current lack of a rural ACO vision is like when CMS introduced the wage index and every MSA got its own index and the rest of the state was thrown into one pot of leftovers. I believe CMS should develop a two step attribution model for costs to ACOs. First, as now proposed, costs would be assigned based on use of primary care physicians. Then a second step would be added–attribute costs among ACOs depending on which specialists predominated with a primary care physician’s patients. This would require specialists to declare a principle ACO affiliation as primary care physicians are asked to do. CMS would also need primary care physicians to declare a primary ACO affiliation for patients where no specialty care was provided.

We need to be concerned how CMS’s proposed model will evolve in commercial insurance markets and/or in future iterations under Medicare. We should anticipate a shift from retrospective to prospective attribution models and how that can lead to steerage of patients away from local care sites and the undermining of the rural safety net. Enforcement of Community Access Standards is absolutely critical to prevent steerage of Medicare beneficiaries and inordinate leverage by Medicare ACO plans over local rural providers.

There is much uncertainty in our country and in our field (maybe too acutely felt in Wisconsin given our own much reported political conflict and uncertainty). While we understand some of the general direction, we don’t know what forms reform will or will not take. We need to encourage all of us in rural health to look to strengthen the core competencies of doing more, better for less. That will be achieved through significantly greater care coordination and population health focused prevention, using a full range of corporate integrated and virtual collaboration models.

Critical Access Hospitals (CAHs) are a valuable safety-net provider for almost 60 communities in Wisconsin and for more than 1,200 communities across the county. If you add in the number of smaller rural hospitals, the number of affected communities that will not have the ACO’s required 5,000 Medicare beneficiaries, let alone the actuarial sound lower limit of 20,000grow even larger.

ACOs are an important part of healthcare reform in America but as currently defined by CMS they are largely irrelevant for most of rural America.

I don’t believe that most of us care more about our pets than ourselves. If we could buy human wellness in a can once a week, we’d clean out the stores. But aging houses and bodies share the need for sweat equity. I know from experience, easier said then done.

I also am pretty sure that none of us gets out of here alive. And sooner or later all of us will face tough challenges to our health that diet and exercise and attitude will do little to change. But what we do, for most of us most of the time, makes a huge difference in how well we enjoy the trip.

There are numerous carefully crafted definitions of “wellness.” For me, it simply means feeling healthy. The challenge is how do we each make it happen? What incentives at work and home are most effective in helping us to engage in our own health over the long run? I don’t know the answers for you, just that these are the right questions. Google “wellness tips” and you’ll bypass pet food to many organizations with practical advice.

Every year there is an endless series of National This or That Week or Month for every body part and cause. The “skip over ads” button on my remote protects my quality couch time so I am not much distracted. But as an early baby boomer, the “joys” of an aging body continue to remind me I can’t take health for granted. My only regret is that I wish I had figured it out twenty yeas earlier.

Hopefully fewer people will make my mistake. Something is changing in our country. Wellness the slogan is starting to become a mainstream reality. Or at least it is something more of us are trying for and with more support. Employers are beginning to think about employee wellness. For those of us fortunate to have a job, too much time is spent at work to restrict wellness to after hours.

More of us now know that our health is too important to expect some one else to fix it after we run it down. And we all know we have less money to pay for repairs. Most employers care about the people they work with, day after day. But they also are beginning to understand that an investment in wellness can have a real payback to the organization, whether for profit or non-profit.

Employers are changing because the benefits are becoming clearer, according to a recent study release by the American Hospital Association, “A Call to Action: Creating a Culture of Health.”

• “Overall, U.S. businesses could save $1 trillion in health benefits over the next decade through employee health and wellness programs.

• Employer costs fall about $3.27 for every dollar spent on wellness programs.

• Employees are 8 times more likely to be engaged when wellness is a priority in the workplace and 1.5 times more likely to stay with their organization if health and wellness are actively promoted.”

This year, join me in dropping the donut at work and getting off the couch at home.

The first week in April is National Workplace Wellness Week, sponsored by the American Heart Association. AHA believes worksite wellness programs are critical to addressing our nation’s soaring healthcare costs, rising obesity rates and increasing prevalence of chronic disease. A comprehensive program should include tobacco cessation and prevention, physical activity, stress management/reduction, early detection/screening, nutrition education, weight management, training in CPR, AED, First Aid and cardiovascular disease prevention. For more information please visit americanheart.org/workplacewellness.org.

The election was also about huge government deficits. The stage is now set for a hard tug of war between job creation and deficit reduction. As politics and policies compete after the election, we who care about rural health must speak up.

We must say more often and more powerfully: “rural health care equals rural jobs.”

And not just in health care. People know that rural health means rural jobs in health care. People know that businesses are influenced in their relocation decisions by what health care is available locally. But many people don’t consider a major third effect.

A study by experts at the University of Wisconsin on “The Economic Value of Health Care in Sauk County, Wisconsin” is relevant to rural communities across the country. The study showed that:

Every two jobs created (or lost) in rural health care will cause the number of jobs in other local businesses to increase (or decrease) by one job.

Our country needs rural hospitals, doctors and other caregivers to do more, to do better and do it for less. This is a reality driven by an aging population and the need to be competitive globally. But for rural America, where our state, federal and private sector health care dollars are spent, it also matters.

Jobs in good part depend on the export of goods and services. The point here is that, in terms of job creation, rural health care is a major export of rural communities. Rural health providers are very much like a manufacturer or any other exporter because the health care provided to local residents is, more often than not, paid for by dollars from outside the community.

Yes, rural health dollars may have started as insurance premiums and taxes in the community, but they only come back if there are local health care providers there to attract them. The economic impact of exports on jobs does not depend on where the goods or service are consumed. It depends on where the money comes to pay for them.

The National Center for Rural Health Works at Oklahoma State University describes the mechanics in a study for St. James Parish in Louisiana. They use the example of closing a town’s only hospital.

“The hospital will no longer pay employees; dollars going to these households will stop. Likewise, the hospital will not purchase goods from other businesses; dollars going to these businesses will stop. This decreases income to more local households. As earnings decrease, these households decrease their purchases from local businesses. These businesses reduce their purchases of labor and other local goods and services. This is how the economic impact of losing a local hospital works its way throughout the entire local economy.”

All of us who care about rural health understand the critical connection between rural health and rural economic development. We need to make sure that message is clear in our state capitals and in Washington.

We who care about rural health must be heard–that the total impact of rural health is as much to keep and grow rural jobs, as it is to provide critically important health care locally.

I hope that the health insurance exchanges required by the new federal health reform law will work as well. These virtual market places open for business in 2014. Until then there will be much speculation, pro and con. The promise is that individuals and small businesses will gain access to better health insurance. We do know a fair amount about how they will be constructed. We can only guess how individual consumers will react.

The hope is that insurance exchanges will offer more reasonably priced premiums that vary less year to year. Individuals and small employers will have a choice among health plans on a more level playing field.

Near full participation in these markets is necessary for the exchanges to work. Participation will be “encouraged” through an array of federal subsidies and penalties, that may or may not be strong enough.

But it is a mistake to focus only on the law and the expected regulations. The benefits from this health reform will not come mostly from the government’s action but from the decisions of those using the exchanges. In other words, this reform is less about stop and go lights and more about an intersection with stop signs that requires people to make a choice of when and where to go.

So what choices might people make? Thanks to talks with friends in the insurance business, I think we will see a significant emphasis on plans with stronger primary care networks. This is good as it is generally agreed that Americans would be healthier, and our care less expense, if we used more primary preventative care and less specialty care. Why may this happen?

The exchange rules are intended to make the exchanges fairer for consumers and patients but also to encourage competition to improve the quality and cost of health care. If an insurer offers a product in the exchange, it will no longer be able to adjust the premium based on the health of the insured. (Employers will need to be able to financially incent healthy behaviors by varying the employees’ share of the premium so as to encourage the focus on wellness.)

More than before, insurers will have a business interest in attracting more healthy subscribers than their competitors. In the past, health plans were particularly interested in advertising access to a wide array of specialists and large medical centers. They were also able to charge substantially higher insurance premiums to those more likely to need care, typically much more expensive specialty care. That will not longer be as easy to do.

The insurance exchanges will change what it takes for an insurer and their affiliated provider networks to succeed. Those who offer the most convenient access to primary care physicians, nurse practitioners and physician assistants will attract healthier customers with less of an interest in access to specialty care that they don’t expect to use.

This will create a greater demand for already scarce primary care practitioners, driving up their salaries compared to specialists. It will increase their influence on health care and health policy. It will increase the proportion of students choosing this career path. This is good news for those local and regional networks that have already developed local access to robust primary care services. It will create even greater demands on schools of medicine and nursing to educate the right workforce.

It is yet unclear whether the incentives and penalties in the health reform law are strong enough to make the health exchanges work. If they do, you can expect that primary care will no longer be American medicine’s stepchild. Ever the optimist, I can even hear medical faculty start to say to bright young medical students, “why would you ever want to be a specialist?”

The long sought fundamental change in American healthcare may very well come not from the heavy hand of government but the natural self-interest of the market place.

Make no mistake, whether or not you call it “reform,” health care must and will change in some very basic ways. We, and our country, can’t afford not to change. I have yet to meet a healthcare leader who disagrees with this, although I am sure there is someone somewhere. We all know this, regardless of where we stand in the endless political posturing.

The reality is that the Reform Bill and its implementation will and should be scrutinized and, hopefully, improved. This will happen in hundreds of ways over the next decade or so, with or without new faces elected to Congress.

The key question is will we, in our political clumsiness, throw “the baby out with the bathwater?” Will Congress really “repeal reform” and:

• Take away insurance from tens of millions of hard working Americans?
• Allow health insurers to deny children health insurance because of pre-existing conditions?
• Take away from small businesses tax credits covering up to 50% of employee premiums?
• Allow insurers to put a “lifetime cap” on how much insured healthcare you can receive?

Maybe Congress will. But I doubt it. As a practical matter, it is hard to see how the main threads of health reform can be removed without the whole thing unraveling. Having said that, I’d be the last person to ever try to predict what Congress will or won’t do. Or even less, can I figure out what a worried and divided American public really wants? Pick almost any position and you can probably find a poll that will support it.

So what do I think? I believe rural communities need a Congress that further encourages both public and private sectors to:

• Assure that we have reasonable access to care in local rural communities.
• Stop wasting money on unnecessary procedures with payments driven by the amount of care provided, not the quality of that care.
• Stop unjustifiable differences in what Medicare pays for care in one region versus another.
• Incent providers to keep patients healthy and coordinate their overall care.

With all apologies to the Alcoholic Anonymous Serenity Prayer, my hope is that “Congress finds the serenity to accept the things they shouldn’t change, the courage to change the things they should, and the wisdom to know the difference.”

I studied with George Bugbee, (the American Hospital Association’s first non-physician executive director) to become a hospital administrator just a few years after the creation of Medicare and Medicaid in 1965. Assuring universal coverage for the rest of America was widely believed to be right around the corner. It has been a long corner.

It took us the greater part of twenty years to work through challenges caused but not anticipated when the Medicare Prospective Payment System began in 1983. It will take at least that long for all of us to digest this new change. From a rural perspective, here are some of the priority areas that will need our attention:Protecting access to local care is a high priority as we address the systemic changes this legislation will incentivize. Equally a threat to access is the soon to explode retirement of baby boomers, leading to worsening of the current mal-distribution of healthcare professionals.

Given the history of rural health voices being underrepresented on the current Medicare Payment Advisory Commission, an even more powerful Medicare Commission is potentially threatening to rural equity and will require even greater vigilance.

Health reform’s first installment was the American Recovery and Reinvestment Act and its focus on health information technology. Unfortunately, it appears that many decisions to date, by Congress and the Administration, are leading to an increase in the rural-urban digital divide.

The greatest limitation to this legislation is that it is about “healthcare” much more than about “health” reform. Americans are breaking the healthcare bank due to too much smoking, drinking and eating, and too little exercise, education and jobs. We must expand our efforts to help individuals and communities become healthier–to reduce the need for health care.