The financial health of rural hospitals is getting a booster shot from the state with the unveiling of the Pennsylvania Rural Health Model unveiled last week in Harrisburg.
Both Susquehanna County hospitals are among the first five participants in the new Rural Health Model, designed to give the health care providers more financial stability.
Endless Mountains Health Systems CEO Loren Stone, and Barnes-Kasson CEO Sarah Ardornato attended the announcement delivered by PA Secretary of Health Rachel Levine.
Sec. Levine said the groundbreaking initiative would transition the hospitals from “fee for service” to a global budget that would provide a “predictable, reliable stream of revenue.”
While the hospitals become more economically viable, the health outcome for residents they serve is also improved, she said.
Hospital and Health Systems of Pennsylvania President and CEO Andy Carter said the hospital administrators and government officials partnered to help plan the pilot program that would not only achieve financial stability, but also prioritize community health and well-being, allowing for the hospitals to customize new programs to meet the needs of the community.
The Rural Health Model is an alternative payment model, transitioning hospitals from a fee-for-service model to a global budget payment. Instead of hospitals getting paid when someone visits the hospital, they will receive a predictable amount of money. Payment for the global budget will include multiple-payers, including private and public insurers.
Gateway, Geisinger, Highmark, Medicaid and UPMC will be the initial private insurance payers of this model.
Through this change in payment model, the hospitals will be able to transform care locally to better meet the health needs of the community. This includes opportunities to assess items that may traditionally fall outside of the role of the hospital, such as transportation and broadband internet access.
“Pennsylvania is home to a diverse hospital community,” Carter said. “Each journey through the pilot program will be different.”
Senator Lisa Baker said the initiative “promises to be a real life-saver for rural hospitals and the people that they serve.”
She noted that rural hospitals not only served to enhance a community’s quality of life, but also play a significant economic role in the area where they are located.
In Susquehanna County, the two hospitals are the top employers in the county. Both are also established as non-profits and designated as Critical Access Hospitals.
Baker said she was encouraged the state was moving away from regulations and mandates to a position of being “here to assist and enable.”
“This is a lifeline effort for the longterm health of hospitals and communities,” Baker said, adding the Rural Health Model would provide for the sustainable operation of facilities for years to come.
“Addressing the problems facing rural hospitals and health care facilities is a matter of high urgency because there are not a lot of options in the neighborhood. For good reasons these hospitals are designated critical access and acute care facilities. The economies of scale rarely work in their favor. Although their emergency rooms do not see the heavy traffic that urban hospitals do, they still have to be prepared for all contingencies. Meanwhile, government piles on requirements while squeezing tighter on reimbursements,” Baker said.
In addition to the model, Sen. Baker has introduced legislation that would create the Rural Health Redesign Center to develop a more predictable payment plan and create a fixed budget to stabilize reimbursements. Support would also be provided to offer new community health services and programs to meet key needs such as behavioral health and substance abuse. It would be funded by a $25 million grant from the Center for Medicare and Medicaid Innovation, as well as funds from private sources moving forward. SB314 is currently in the Senate’s Health and Human Services Committee. Companion legislation sponsored by Rep. Tina Pickett, HB 248, is in the House Health Committee.
“To me, rural has always meant more time and more miles,” said Pickett at a press conference in Harrisburg to unveil the model. “We need these facilities so that our residents can have access to quality health care—such as emergency services, lab testing, rehab and treatment centers—without having the burden of wasting time and money driving long distances.”
“Over 30 hospitals in Pennsylvania are at risk of closing,” continued Pickett. “This could result in thousands of lost jobs and a significant decrease in access to health care services for these rural communities. This program will help strengthen and provide residents with access to quality health care services, while also keeping local jobs.”
Wayne Memorial Hospital in Honesdale, Wayne County and two Susquehanna County-based hospitals, Endless Mountains Health System in Montrose and Barnes-Kasson County Hospital in Susquehanna Depot, will join UPMC Kane Community Hospital in McKean County and Geisinger Jersey Shore Hospital in Lycoming County as part of the innovative and collaborative effort to improve rural health care.
“I am pleased to see that the administration has chosen to include three of our local hospitals to take part in this Rural Health Model,” said Rep. Jonathan Fritz. “It is important that we do what we must to ensure our rural hospitals remain ready to serve, operate efficiently, and enhance quality of life in our communities.”