by David Shelton | Dec 9, 2019 12:01am
Running
a rural hospital is a tough job. It’s hard to find good talent, costs keep
going up and younger people are moving to urban areas, reducing rural populations.
Patients
who are left tend to be older and heavily reliant on Medicare and Medicaid,
resulting in lower reimbursements and higher uncompensated care. Many rural
hospital executives, faced with these challenges, the weight of increased
regulation and a shift to value-based care, have been forced to give up the
fight and watch their institutions close.
Between
2005 and 2012, an average of seven rural hospitals in America closed each year.
Since 2012, the closure rate doubled to almost 14 per year.
All
told, 155 rural hospitals have shut their doors since 2005, sounding the
alarm in Congress, at the Centers for Medicare & Medicaid Services (CMS)
and within advocacy groups around the country. Fortunately, action is underway.
CMS is testing new care models as part of its Rural
Health Strategy. Legislation to improve payment and delivery models for rural
hospitals has been introduced.
The
American Hospital Association’s Rural Advocacy Agenda focuses on ensuring fair
reimbursement, removing red tape, bolstering the rural hospital workforce and
pushing other investments (PDF) forward in rural
communities.
While
efforts like these are commendable, time is running out for rural hospitals on
the brink.
Administrators
in many facilities have already tried cutting expenses, deferring maintenance
and postponing equipment purchases. Some have eliminated money-losing
departments, laid off staff and asked for taxpayer help. Still, almost half of rural hospitals are in the
red, and, unless their finances improve dramatically, another 21% are
considered at high risk of closing.
The path to sustainable solutions
Despite
the urgency of the rural hospital dilemma, quick, temporary fixes are not the
answer. Administrators need sustainable solutions to help them right the
financial ship immediately and continually improve operations over the long
term. One approach that’s working in hospitals across the country is to change
the patient financial experience to reduce uncompensated care and increase
patient collections.
Step 1: Know your patients
Patient
experience is a hot topic for all healthcare providers, with financial services
increasingly influencing patient perceptions. Rural hospital leaders, however,
must approach financial solutions with their unique audience in mind. Rural
consumers tend to have less internet access and
cellphone connectivity, making it harder for them to find and understand
insurance and what they may qualify for. Many are on Medicare or Medicaid and
can churn between eligibility and ineligibility, leaving hospitals to pick up
the slack if patients have gaps in coverage.
People
in small, rural markets who need commercial health insurance often find their
only options come with high deductibles and premiums they can’t afford. As a result of these issues,
almost 10% of rural residents lacked any kind of insurance in 2017. Financial
insecurity adds to the stress. Almost half of rural Americans say they couldn’t
pay an unplanned $1,000 expense in full immediately. Forty percent have struggled
to pay their medical bills, and 45% went without healthcare because they didn’t have the money (PDF).
Step 2: Create a new financial experience
“No
surprises” should be a central theme for rural hospitals who want to change the
patient financial experience to increase collections and reduce uncompensated
care. A solid strategy starts with streamlined, patient-friendly
preregistration. Registration staff should contact patients before appointments
to verify insurance eligibility, deductibles and copayments as well as to
provide bill estimates so patients know what they’ll owe before they receive
care.
Financial
assessment tools are available to help staff determine patients’ likelihood and
ability to pay, which can guide them to find or customize an appropriate
payment plan and increase the hospital’s chances of collecting the full amount
they’re owed.
Especially
critical to rural hospitals looking to reduce uncompensated care are patient
advocates who work with uninsured and underinsured patients. There are dozens
of federal, state, local and third-party medical benefit programs that many
families are not aware of. Experienced advocates know how these programs work,
who’s eligible and how to access benefits. They can help patients navigate the
system to optimize benefits and financial care plans, ideally at no charge to
the patient.
Step 3: See better results
Patient
financial obligations are the fastest-growing share of hospital receivables.
This fact, coupled with rural hospitals’ pressing challenges, make it
imperative for executives to change the patient's financial experience, and
quickly.
Taking
steps to streamline patient registration, expand financial services and provide
advocates for uninsured patients can increase collections and reduce charity
care, bad debt and accounts receivable relatively painlessly. Better results
like these could be the light at the end of the tunnel that rural hospital
execs are looking for.
David
Shelton serves as CEO for PatientMatters.
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