It is undeniable that the financial problems faced by rural health care are very complex and require out-of-the-box solutions. One solution currently being tested is a new funding system in which public and private insurance companies pool funds to pay for a specific set of services in a specific community.
put forward Final recommendation issued The Future Rural Healthcare Task Force of the American Hospital Association proposed in May that the solution will enable participating hospitals to obtain funds from the funding pool for the provision of core services such as primary care, emergency department, and maternal care .
In general, the rural health experts interviewed by MedCity News agreed that this model is feasible. Its version has been piloted in Pennsylvania and Maryland, and initial results seem to be favorable. Favor the modelBut the implementation of this model is not without challenges, including the consistency of stakeholders and the lack of expertise in risk management in rural hospitals.
Public-private financing of core service model
Obviously, the traditional fee-for-service model is not suitable for rural hospitals. The rural population is declining Timothy Moore, president and CEO of the Mississippi Hospital Association and member of the AHA working group, said in a telephone interview that, as a result, the profit margins of hospitals in these areas are no longer what they used to be.
With the decline in profit margins, hospitals are generally closed. According to statistics, from January 2013 to February 2020, 101 rural hospitals have been closed. Government Accountability Office.
“in case [patient] Insufficient quantity to prove and manufacture [core] Future services are feasible, so there must be some way to offset these costs,” Moore said. “This is here. [model] Play a role. “
This model involves the payer and provider determining and agreeing to the core, basic services and quality measures of the beneficiary’s care. The payer provides funds to a pool that will cover these services on a per-population basis rather than a per-service fee.
Moore said that despite the precarious financial situation of rural hospitals in 2020, payers are seeing strong returns. Therefore, payers have obvious opportunities to cooperate with each other and providers to ensure reliable funding channels for critical services.
Hospitals participating in this model will need to hire care coordinators or navigators to ensure that patients can access services while preventing overuse. The hospital will also be responsible for meeting negotiated quality measures related to core services. If these requirements are not met, the payer can reduce future allocations to the fund pool.
In order for the model to work, the payer must commit to a three-year participation period. Any payer who chooses to leave within this time period must pay a predetermined penalty to the fund.
Brock Slabach, vice president of member services of the National Rural Health Association, said that the model focuses on population health, not the number of patients. It can not only help rural hospitals maintain the vitality of traditional services, but also solve health problems. Social determinants. , In a telephone interview.
For example, transportation has been identified by the American Heart Association working group as one of the most important services in rural areas. Slabach said that rural hospitals usually do not have enough funds to provide transportation services, although this is one of the biggest obstacles to medical services in these areas. This is where the model can help because it establishes a funding system that allows hospitals to prioritize the services most needed by the communities they serve.
Real examples of models at work
A version of the collective funding model for core services is already being tested.
one is Pennsylvania Rural Sanitation Model, Which aims to transform rural hospitals from service-based fees to global budget payments. This model is operated by the PA Rural Health Redesign Center Administration and implemented in January 2019 in cooperation with the Medical Insurance and Medicaid Innovation Center.
According to this model, Medicare and Medicaid Service Centers and other participating payers (including state Medicaid institutions and commercial insurance companies) pay all inpatient and outpatient services for participating rural hospitals through a pre-set global budget.
Gary Zegiestowsky, executive director of PA Rural Health Redesign Center Authority, said in a telephone interview that CMMI’s goal is to allow 90% of the net income of participating hospitals to be covered by the global budget. The remaining care is still reimbursed on a fee-for-service basis.
“benefit [of the model] Is there a fixed operating budget for the hospital,” Zegiestowsky said. “So, for rural hospitals struggling to survive…this allows them to maintain financially stable operations and focus on what they can do to transform and adjust their Services to best meet the needs of the community. “
With the help of the Rural Health Redesign Center Administration, the payers and providers participating in the model jointly formulate a budget.
If necessary, you can adjust the budget. For example, Zegiestowsky said that there is a “potentially avoidable utilization factor” that explains care that should not be provided in hospitals but provided in hospitals. Savings are included in the budget to cover avoidable uses.
The model has entered the third year of a six-year demonstration program, and so far, the feedback from participants has been positive.
“We recently conducted a supplier survey, and 92% of hospital executives in the program believe that the global budget model is helping them achieve a more stable financial situation and provides a solid path for their organizational transformation,” Zegiestowsky said .
In addition, the model seems to help reduce costs. CMMI conducted an independent evaluation of the Maryland version of the full payer global budget plan in 2017. Show that it contained General hospital expenditures of the beneficiaries of medical insurance.
Therefore, other countries were inspired to use the global budget as a potential financial solution for their rural facilities.
Dr. William Ferniany, CEO of the University of Alabama Birmingham Health System and member of the AHA Rural Health Task Force, has been trying to implement a similar flexible funding model in his state for many years.
Currently, Ferniany is working with a consortium that includes leaders from the Blue Cross Blue Shield of Alabama and the Alabama Hospital Association, as well as the state commissioner of Medicaid and the head of public health of Alabama. He is on the phone Said in the interview. and CMS’ Community health services and rural transformationOr chart, the payment model piqued their interest.
The CHART released in August last year involved two tracks: the community transformation track and the responsible care organization transformation track. First, CMS will select 15 organizations, including state medical aid agencies, local public health agencies, and independent practice associations, to work with participating hospitals to implement new federally funded care models. The second will involve CMS selecting 20 rural-focused ACOs to receive advance payments as part of joining the Medicare Shared Savings Plan.
UAB Health System has applied for the model and is waiting for CMS to announce participants this fall.
“A global budget like Pennsylvania or Maryland, or a graph model, [are] A better way for rural hospitals [to get paid than fee-for-service],” He says.
Barriers to implementation
Although these payment models hint at an innovative future for rural healthcare, it is important to remember that they present their own challenges.
Von Nguyen, senior vice president and chief medical officer based in Durham, said that from the payer’s perspective, although funding pools or global budgets can help rural hospitals survive, a major obstacle is accountability. Blue Cross and Blue Shield of North Carolina, In a telephone interview.
Members who purchase the Blue Cross plan are entitled to a specific set of services, which may be different from those offered by competitors. He said that when they jointly decide on the core services that will be funded through the pool, each payer is responsible for the care they promised to their members.
“you [may] When you really pool your funds, you lose this sense of responsibility,” he added.
In addition to the issue of membership responsibilities, Nguyen believes that not every hospital is ready to accept certain value-based models, including those involving pay-per-person payments such as collective funding systems.
“It takes quite a lot of ability to manage patients in a head-to-head model because you get [a certain amount of money on the front end] If you need to provide a service and the cost is higher than the per capita fee, the hospital will take responsibility for it-so the risk is high,” Nguyen said.
Managing risk is a capability that hospitals need to develop, and rural facilities may encounter difficulties in this regard.This is a company like Kansas City, Missouri Caravan health Come in.
Caravan Health President and CEO Tim Gronniger (Tim Gronniger) said that the private-public funding pool model is a good idea in theory, but it is difficult for rural providers to take advantage of innovative new strategies.
Caravan supports the implementation and operation of value-based care models in rural facilities and those that serve low-income people disproportionately.
“We provide them with technology, expertise and guidance, and we become their partners and share the risks of these contracts,” Gronig said in a telephone interview.
Slabach of the National Rural Health Association said that another source of struggle between providers and payers in this model is consistency.
Bringing together different stakeholders with different interests and finding common ground can be challenging, especially when it comes to financing. He said that getting everyone in the conference room to agree to the same terms regarding cost and quality measures may require an unprecedented level of collaboration.
However, if implemented as expected, the model and its different versions may change the operation and funding methods of rural health care.
For Fernany of UAB Health System, the pooled funding model keeps the ultimate goal of the healthcare industry at the forefront and center—to take care of the public.
“I used to think that healthcare was a right,” he said. “Now I see it as a public good. It must be available to everyone, just like clean water is a public good… if we start to think about it [healthcare] As a public good, [we] The fee will be paid in a way that benefits the public. “
Photo: Claude Nakagawa, Getty Images
