Working-age people living in rural areas are 43% more likely to die from natural causes than in urban areas

There has been a long history of promises from both Democrat and Republican administrations about addressing the healthcare and quality of life needs of residents in rural America.

Sadly, most of those promises have been unfulfilled and, as noted by the Economic Research Service of the Department of Agriculture in its March 2024 Report, “Working-age people living in rural areas are 43% more likely to die from natural causes than in urban areas.  Over the past 20 years, the death rate for working-age adults living in rural areas increased, while mortality decreased for those in urban areas”.

There is no silver bullet answer to these rural health challenges, including Medicaid and the $50 billion dollar funding from Rural Health Transformation Program which is part of the One Big Beautiful Bill.

While Medicaid is not the silver-bullet answer to the healthcare and quality-of-life challenges facing residents in rural and urban America, it can complement other initiatives and funding mechanisms, such as those discussed in this blog, as well as targeted categorical and block grants to make a real positive difference and to keep the population healthy.

What we need is a ground-up approach, which starts with the residents’ needs in rural communities, instead of a narrow focus on the hospitals.  Obviously, hospitals play a significant role in residents’ health and well-being, but to have a long-term impact on rural America, addressing primary care shortages may be more of a priority.

The combination of an increased number of family medicine physicians, Federally Qualified Health Centers, Community Health Centers, telemedicine, and community health workers would be the most cost-effective way to proactively address many of the healthcare and quality of life needs of residents.

As noted by Shawn Martin • Executive Vice President & Chief Executive Officer at American Academy of Family Physicians (AAFP), “Preserving rural hospitals is important, but PRESERVING RURAL FAMILY PHYSICIANS IS A HEALTH CARE AND ECONOMIC IMPERATIVE.”

$50 billion in funding from the Rural Health Transformation Program

While the $50 billion funding from the Rural Health Transformation Program, which is part of the One Big Beautiful Bill, will help address some of the needs in rural America, it is just a temporary band aid that is subject to abuse. As noted by Michael Cannon director of health policy studies at the Cato Institute, a libertarian think tank headquartered in Washington, D.C., in an article in MedPage money was set aside because of politics and not necessarily for rural patients. “As long as it's a government slush fund where politics decide where the money goes, then there's going to be a mismatch between where those funds go and what it is consumers need.” Cannon said.

As to some of the specifics of the Bill, per the KFF analysis:

“Half of the funds ($25 billion) will be distributed equally among states with approved applications. For the second half of the funds ($25 billion), CMS has more flexibility. The law requires that CMS considers certain factors when distributing these funds (the share of the state population that lives in a rural part of a metropolitan area, the share of rural health facilities in the state as a share of all rural health facilities nationwide, and the situation of hospitals that serve a disproportionate number of low-income patients with special needs).”

As further noted in the KFF analysis, “States, subject to CMS approval, must use the funds for at least three of the following purposes:

·       Promoting evidence-based, measurable interventions to improve prevention and chronic disease management.

·       Providing payments to health care providers for the provision of health care items or services.

·       Promoting consumer-facing, technology-driven solutions for the prevention and management of chronic diseases.

·       Providing training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals.

·       Recruiting and retaining clinical workforce talent to rural areas, with commitments to serving rural communities for a minimum of 5 years.

·       Providing technical assistance, software, and hardware for significant information technology advances designed to improve efficiency, enhance cybersecurity capability development, and improve patient health outcomes.

·       Assisting rural communities to right size their health care delivery systems by identifying needed preventative, ambulatory, pre-hospital, emergency, acute inpatient care, outpatient care, and post-acute care service lines.

·       Supporting access to opioids use disorder treatment services, other substance uses disorder treatment services, and mental health services.

·       Developing projects that support innovative models of care that include value-based care arrangements and alternative payment models, as appropriate.

·       Additional uses designed to promote sustainable access to high quality rural health care services, as determined by the CMS Administrator.

·       States could also bolster funding for rural emergency medical services (EMS) services and support training for new EMS personnel.”

I share the concern, as noted above, of Michael Cannon, both at the national and state level. As Mr. Cannon succinctly stated, “where politics decides where the money goes, then there's going to be a mismatch between where those funds go and what it is consumers need.”

In this case there will be an enormous potential for a mismatch between the real needs of residents of rural America and the political steerage of funding by major lobbying groups at the national and state level such as the American Hospital Association (AHA). 

AHA’s message to policy makers regarding potential cuts to Medicaid funding debate focused on their “concern” with the negative impact on rural America (a Republican stronghold) and on rural hospitals and their related services, but their message rings hollow upon tracking their “actions” over time. Check out my recent blog on rural healthcare and the American Hospital Association to gain a better understanding of my concern.

Federal and State initiatives that could be part of and beyond the $50 billion in funding from the Rural Health Transformation Program to positively impact, in a sustainable manner, the healthcare and quality of life challenges in rural America:

While $50 billion dollars may sound like a lot of money, it represents just a temporary band aid on all the healthcare and quality of life needs of residents of rural America.

Ideally, as I noted previously, to have a long-term positive impact, we need a ground-up approach which starts with the residents’ needs in rural communities.  Some of those needs are shared by all rural areas and others are unique to specific states or rural communities.

There are needs that are shared by most if not all rural communities and consequently should be a national priority and proactively addressed by both long-term funding and actions by the federal government beyond what is identified in the Rural Health Transformation Program.

The federal government is in the best position financially and from an economy of scale perspective to address these needs in a more cost-effective manner.  Also, some of these initiatives, as noted below, need to have the power of the federal government leading the charge, since they are going against long embedded self-interest priorities of incumbent stakeholders:

·       Increase the number of primary care residency programs in rural areas. Physicians tend to end up practicing for the long term close to where they perform their residencies. As noted by the Government Accounting Office (GAO), “98 percent of the residencies funded by Medicare are in urban hospitals. Because the formulas that dictate Medicare’s residency funding have mostly been left unchanged since they were created in the mid-nineties, the medical training pipeline has not been meaningfully remade to address the current misdistribution of the country’s physician workforce.”

·       Dramatically increase reimbursement for primary care to not lose students to other physician specialties.

·       Implement loan repayment programs that specifically focus on medical students who select primary care as their specialty, especially in rural America.

·       Increase access to primary care physicians in rural areas through the J-1 Visa Waiver

·       Expand scope of practice and reimbursement for advanced practice providers subject to state regulations for professional practice to maintain or improve access to local maternity care for rural women and develop and support rural-specific obstetrics-focused residency programs.

·       Enhance financial support for Federally Qualified Health Centers (FQHCs) since in many cases they are the lifeline for healthcare services in rural America

·       Rural Hospitals:

a.    If appropriate, financially support Rural Emergency Hospitals  - In 2023, a new Medicare provider type was implemented - the Rural Emergency Hospital is designed to maintain access to emergency and outpatient care in rural areas.

b.    Increase the percentage of 340-B payments to rural hospitals within the state. Many well-funded urban hospital systems receive this funding at the expense of inner-city and rural hospitals that desperately need it.

c.     During the COVID-19 pandemic, large financially stable urban hospital systems received funding from the federal government, while small rural hospitals either closed or were forced to shut down essential services, such as maternity care.  There should be a deliberate federal policy to direct these types of payments to hospitals in “real” financial need, such as small independent rural hospitals in crisis.

d.    Ensure that rural hospitals focus on providing comprehensive primary care as well as inpatient, outpatient, long-term, and chronic care services and explore opportunities to improve hospital efficiency through team-based care, new staffing types, and the use of technology.

e.    Rural health systems should include a robust and collaborative public health infrastructure.

f.      Facilitate regionalization of services to better use scarce clinical and health care resources;

g.    Support collaboration between rural hospitals, FQHCs, RHCs, and other safety net providers to provide primary care and urgent care services as an alternative to emergency department use.

·       CMS and state governments should support Payment Models that incent rural hospitals to operate efficiently and to keep people healthy within their community.

o   Case Study: The Pennsylvania Rural Health Model

(a)  Pennsylvania hospitals in rural areas often do not have the financial resources or workforce necessary to maintain and expand access to care needed in the community, or to make investments that may improve quality of care and patient experience. As a result of these challenges, many rural Pennsylvanians have seen their local hospital close.

(b)  The Pennsylvania Rural Health Model (PARHM) paid participating hospitals a fixed amount upfront, regardless of patient volume, empowering these hospitals to invest in high-quality primary and specialty care that addresses the specific needs of the communities they serve. Model benefits may have included: better coordination and linkage of medical and social needs services, chronic disease management, preventive screenings, and substance use disorder treatment. These fixed payments may have also given participating hospitals financial stability, given the steady flow of payments it received through the model.

(c)  The Pennsylvania Rural Health Model (PARHM) - In addition to key state and federal partners guiding its administration, the PARHM involves diverse participants, each contributing to the model’s implementation and success. This includes eighteen participant hospitals. Participant hospitals are stretched across fifteen counties spanning every rural region of the state. Each hospital is surrounded by a different community with unique cultural and geographic characteristics. City population sizes range from 1,129 to 13,532 with the hospitals ranging in sizes from 10-bed capacities to 200.

(d)  Preliminary results of the Model show that the Medicare spending per member per month continues to be below the rural spending by beneficiaries for PARHM hospitals compared to the national rural average. In addition, for hospitals where applicable data is available, 80% improved avoidable utilizations, 83% improved HAC scores, and 100% maintained CMS readmission rates. Data being tracked within the program has identified that while cost per beneficiary remains below the national rural average, quality outcomes as assessed by the statewide measures are above average. One of the most notable accomplishments of the Model is that no participant hospitals closed despite the impacts of the COVID-19 Pandemic.

(e)  Led by the Rural Health Redesign Center (RHRC), this initiative is a key part of broader efforts to tackle the rural health crisis in Pennsylvania. The RHRC, in coordination with current participants and other key stakeholders, is actively working to leverage the lessons learned through the PARHM to create a next-generation solution that will continue to provide high-quality healthcare to rural communities beyond the program’s current sunset.

·       Where appropriate, expand funding for Freestanding Emergency Departments (FSEDs) in rural America.

·       Expand the financial support for Community Paramedicine.

·       Expand the financial support for the Community Health Worker Model (CHW) in rural America.  

·       Rural Healthcare HUBs, which provide the needed infrastructure to support collaborative initiatives that address health and quality of life initiatives for the residents in rural America, should be aggressively financially supported by the federal and state governments.

·       Broadband expansion - Broadband expansion will allow virtual healthcare providers to play a greater role in rural America. Broadband expansion will provide increased virtual job opportunities for residents in rural America.

·       Economic development - Public/Private partnerships focused on economic development in rural America is a critical priority. Rural America was already suffering from a loss of jobs prior to the COVID-19 pandemic, and the economic landscape has become even worse after the pandemic. Innovative public/private initiatives and collaborations are needed to revitalize the rural economies.

I am concerned that Medicaid work requirements can cause adverse effects on rural residents. Rural Americans are more likely to be low-wage workers, more likely to be unemployed, and have fewer job options than urban Americans, making rural Medicaid enrollees more susceptible to losing coverage under work requirement policies.

I do agree that finding employment opportunities for rural residents is critical for the impacted individual, their families, and the overall economic health of the rural community. I would like to see an economic development strategy focused on rural communities that could assist in revitalizing their economies and finding job opportunities for their residents, not taking them off of Medicaid.

·       Transportation challenges continue to plague rural America. There are multiple collaborative opportunities for community public/private stakeholders to find innovative approaches to address some of the transportation challenges that directly impact the health and quality of life of rural residents. The specific answer to these challenges needs to be addressed at the local level.

·       Elderly - There is a greater percentage of Americans over sixty-five in rural areas compared to urban areas. The elderly population is especially impacted by healthcare access issues in rural America. It becomes even more challenging for poor elderly who are isolated from any safety-net assistance. Another challenge for elderly in rural areas is the lack of adequate long-term care facilities such as nursing homes, assisted living, skilled nursing, and home healthcare.

An initiative that could potentially address some of the multi-faceted needs of the elderly in rural communities is PACE. The Programs of All-Inclusive Care for the Elderly (PACE) provides comprehensive medical and social services to certain frail, community-dwelling elderly individuals, most of whom are dually eligible for Medicare and Medicaid benefits.

Healthcare stakeholders that could make a difference:

Medicaid Managed Care & Medicare Managed Care Plans

·       Approximately two thirds of the states have Medicaid Managed Care plans serving their Medicaid population.

·       There is a greater percentage of Americans over sixty-five in rural areas compared to urban areas which results in Medicare Advantage plans policies and reimbursement having a material impact on rural America.

·       A significant percentage of residents of rural America are dual-eligible for both Medicare and Medicaid.

·       Both these plans enter risk arrangements with their states or the Center for Medicare & Medicaid Services (CMS), usually as some form of capitation.

·       In theory, the ultimate objective of Medicaid Managed Care and Medicare Advantage plans is to keep their membership healthy which, given the risk arrangements with the state and CMS, would result in enhanced profitability for the plans.

·       Both these plans, either through their own initiatives or state/CMS directives, also play a role in addressing social determinants of health.

·       Medicaid Managed Care and Medicare Advantage plans should be required to collaborate with each other and other community stakeholders to proactively address the healthcare and quality-of-life needs of residents in rural America.

·       Medicare Managed Care (MA) and Medicaid Managed Care plans should also be required to provide enhanced financial assistance in the form of higher reimbursement to rural hospitals, especially independent rural hospitals in need.

Non-Profit Hospitals Community Health Benefits

·       Large urban hospital systems, many of which are tax-exempt non-profit hospitals, are the beneficiary of specialty referrals from rural areas of their state. There should be contribution requirements (financial or in-kind) levied on these urban referral centers that would help fund needed “community benefit” initiatives in rural counties within their state and to ensure essential hospital services in rural counties are not eliminated.

·       As noted in a report from the Lown Institute in April of 2023, “The difference between nonprofit hospitals’ tax breaks and the amount they spent on community investments or discounted care is enough to “rescue the finances of every rural hospital at risk of closure.  Americans desperately need hospitals to use their billions in tax breaks as intended: to relieve the problems of medical debt and access to care,” Vikas Saini, M.D., president of the Lown Institute, said in a release. “These are charitable organizations, and they should do a better job at prioritizing social responsibility over profitability.”

Lown found that 77% of the reviewed hospitals spent less on community investments and charity care than the estimated value of their tax breaks. The group wrote that many facilities that had the largest deficit “also received millions in COVID-19 relief funding and ended the year with high net incomes.”

Conclusion

There is a "scarcity of resources" to address all of our societal priorities and, consequently, any initiatives that focus on making our rural communities healthier must also be done in a cost-effective manner.  

To be sustainable, any initiative must aggressively engage each of the rural communities from both a planning and implementation perspective, taking a ground-up approach.

Community public and private partnerships and collaborations have the potential to address health and needed services that impact health status and the quality of life of rural Americans. Ideally these collaborations and initiatives should be coordinated to ensure that they are being done in a cost-effective and impactful manner.

There is no cookie cutter answer for addressing the healthcare and quality of life needs in rural communities. Each rural community has its own profile and, consequently, requires a strategic plan linked to a needs assessment that addresses and prioritizes the specific needs and initiatives within that community.

The healthcare and quality of life challenges impacting residents of rural America can no longer be ignored. The time for immediate action is now and the federal government needs to lead the charge.

Given the fact that many of the recommendations listed here, as well as other needed rural health initiatives, involve different areas and levels of government, the Trump Administration should appoint a rural health champion that has a dotted line to all the initiatives that would positively impact rural America.

There are many dedicated individuals and organizations whose mission is focused on the health and quality of life needs in rural America.  They are much more knowledgeable than I on the issues that are addressed in this blog, as are many of you.

Finally, I would like to extend a heartfelt Thank You to all of you for your commitment to rural America.

As always, I welcome the readers of this blog to share your own perspectives on this critical issue.