iVantage Study Reveals Rural Hospitals in the US Face Vulnerability but Deliver High Value to Rural Communities Nationwide

PORTLAND, MAINE and LEAWOOD, KS, April 14, 2015iVantage Health Analytics and the National Rural Health Association joined today to release the 2015 Rural Relevance Study:  Vulnerability to Value.  The rural health safety net is vulnerable to unintended policy consequences, many resulting from a lack of institutional memory regarding the creation of critical access points-of-care for the 80 million Americans that call frontier and rural communities home.  The research study shows that, while greatly challenged, health leaders in these areas can excel in the industry transition from ‘volume to value’.  Findings examine the extent of rural hospital vulnerability and focus on the value proposition that they provide.

rural-study-2015-208x300Policy changes concerning Medicare reimbursement pose a particular threat to the critical points-of-access that millions of rural Americans depend upon for their healthcare needs. iVantage has quantified the impact that several of these changes will have on rural healthcare institutions. Sequestration, charity care/bad-debt reimbursement cuts, disproportionate share payment cuts, and the uneven adoption of Medicaid expansion under the ACA (intended to address some of these cuts) has led to significant downward pressure on rural hospital margins that may be dangerously underwater. iVantage is also tracking additional proposed cuts such as the OIG recommendations to reduce CAH reimbursements overall and in targeted areas such as swing-beds.

Fifty hospitals have closed this decade and iVantage has identified 283 additional rural hospitals at risk of closure based on more than 60 performance characteristics.  If these vulnerable hospitals were to close, the impact would be significant: 700,000 Medicare patients alone would have to seek care farther from home, 86,000 jobs could be lost in rural communities and it would result in an estimated $10.6 billion loss to the GDP.

Yet, the rural health safety net offers value to Medicare beneficiaries.  CMS would save $6.8 billion were all spending the equivalent of that in rural places.  Further, Critical Access Hospitals charge 71% less than their urban counterparts, while performance on quality, outcomes and patient satisfaction in rural hospitals is on par with urban hospitals.

Exploration of these and related value-based metrics is therefore critical, particularly given HHS Secretary Sylvia M. Burwell’s proposals in February, 2015, to accelerate the share of Medicare payments that are tied to value and reimbursed through alternative payment models and could provide a financial boost to many CAHs throughout the country.

“Rural healthcare providers provide an important safety net to communities across the country, serving 80 million of the US population. Critical Access Hospitals (CAHs) are excluded from current value based payment models though research suggests they would be well served and would receive net bonus payments. That is the good news! However, care should be given in the creation of rural value based measures and reimbursement mechanisms as CAHs may be the least able to bear financial penalties, and such regimes could threaten the rural health safety net further,” said Michael Topchik, senior vice president of iVantage Health Analytics. “The value we see in the rural health safety net is exemplified in this year’s The Top 100 Critical Access Hospitals, determined through the Hospital Strength INDEX™ analysis. These top hospitals were found to have better performance than their peers in managing population risk, they have high quality, outcomes and patient satisfaction and lower costs and charges than their peers.”

iVantage’s landmark Rural Relevance Study:  Vulnerability to Value offers the most authoritative assessment yet of rural and Critical Access Hospital value. The Study will be released on April 14 at the National Rural Health Association (NRHA) Annual Conference in Philadelphia.

“The NRHA is pleased with the release of this study and its significant findings regarding the challenges that rural providers face and the value that rural providers deliver to their communities,” said Alan Morgan, CEO of the National Rural Health Association. “We’ve always known that the nation’s rural hospitals and clinics perform at high levels of quality while doing so with efficiency exemplified by this year’s list of the nation’s Top 100 Critical Access Hospitals.”

To download a copy of the Rural Relevance Study, click here.

To view the 2015 Rural Relevance Infographic, click here.

About iVantage Health Analytics

iVantage is a leading advisory and business analytic services company applying Accelerated Healthcare Transformation™ and the VantagePoints™ platform to drive sustained, evidence-based results. The company’s unique combination of technology, content, and expert advisory services accelerates decision making for the new healthcare.