The Rallying Cry for Rural Hospitals

February 6, 2015
iVantage Health

by Michael Topchik, Senior Vice President, iVantage 


At this week’s Rural Health Policy Institute in Washington, DC, we presented key findings from our INDEX analysis regarding hospital closures. Forty-seven rural hospitals have closed since the beginning of the decade and in October, we leveraged the Hospital Strength INDEX to evaluate these 47 hospital closures and developed the Vulnerability Index™ with NRHA. We noted that 283 additional rural hospitals located across the country may face significant challenges due to sequestration, decreased volume, a 35% cut in uncompensated care, and a 25% cut in DSH payments to rural hospitals and are now vulnerable to closure.

These 283 hospitals represent 700,000 patient encounters and their closure would result in the loss of 36,000 healthcare jobs, 50,000 community jobs, and a $10.6 billion loss to the GDP. View the infographic.

This is indeed a unifying rally call for the rural caucus in the Senate and Congress. Several pieces of legislation have been introduced predicated upon this vulnerability as well as long time advocacy to fix certain policies that have had unintended consequences. Sequestration is just one of those areas.

Mayor Adam O’Neal of Belhaven, NC marched to Washington in July, 2014, to draw attention to the impact on his community losing its rural hospital and he is receiving increasing media attention.  He referenced the 283 vulnerable hospitals to further gain attention to this national issue. “You can’t let rural hospitals close across the country. People die,” O’Neal comments. The message is shocking but powerful. Were these hospitals to close a “9/11 a year” of Americans would die due to closures, he says in his media sound bites. Plans are underway for a number of rural CEOs and constituents from across the US to join him in a second march which will gain massive media attention.

As the INDEX research highlights those hospitals which are vulnerable to closure, it also puts the spotlight on the hospitals which are delivering value and making great strides toward achieving top quality care at lower costs.


More and more, I see CEOs and their boards as the Chief Quality Officers as they focus on a potential future with reimbursements tied to quality, outcomes, patient safety, and patient satisfaction. Many are involved in ACOs and ACO-like organizations that also tie reimbursements to performance. Still others wish to differentiate themselves as participants in High Performing Networks and Narrow Networks. The INDEX offers comparable insights into all of these areas and trends a normalized performance score (percentile ranking vs. all other acute care hospitals in the country) through several releases annually.

Rural hospitals may have marginally higher costs than their more urban peers, but how much so and in what areas? To patients, who are increasingly acting as consumers a simple outpatient procedure that is 100% more expensive in a rural hospital compared with the larger hospital “up town”, may be less and less defensible. The INDEX also explores comparative performance in areas of costs and charges (both inpatient and outpatient) and iVantage notes enormous variation in the field. Variation in rural Direct Costs by rural hospitals are explored here:

The INDEX is an independent and objective resource health leaders may use to track their performance and compare to peers in a cohort of their choosing. Many rural executives appreciate the ability to rank their Market Strength including their Outpatient Market Strength, normalized and comparable vs. peer cohorts of their design.

Where do we go from here?

The Hospital Strength Index is a great place to begin conversations as we have done with rural health leaders over the past several years. The INDEX provides hospital leadership teams the opportunity to understand how the performance at their facility stacks up to their counterparts around the country. CEOs appreciate the opportunity to speak with us about their performance and understand how we have derived their rankings. By placing an emphasis on education, the INDEX data review becomes an open forum to ask questions, understand trends, and take advantage of our expertise.

The comprehensive nature of the INDEX allows conversation to flow through each and every aspect of their job, illuminating both strengths and weaknesses. By providing comparisons and benchmarks to top performing hospitals, we give leadership teams something to strive for: a HEALTHSTRONG Top Hospital Recognition, a Top 100 CAH or a Top 20 CAH award.



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