Rural hospitals have reversed the decline they were experiencing in the late 1980s and are moving toward a position of strength by joining together to serve sparsely populated regions.
Rural alliances in Western states, where rural referral networks have existed for several years, will be stepping up efforts to form more physician-hospital organizations. Patient referrals, and stemming patient migration, are key to survival for the nation's 2,300 rural hospitals.
PHOs are expected to play a critical role in drawing rural physicians into healthcare reform and making rural areas more attractive for establishing practices. Rural physicians need back-up support to staff the hospitals, and a PHO gives them benefits while waiting for new federal incentives for underserved areas.
Many rural hospitals are on solid financial ground, but they also know their relationships with physicians will determine their future.
Sound management strategies also will help rural hospitals stay afloat. Such firms as Brim Healthcare and Quorum Health Resources, as well as others that manage hospitals, are hoping to snare more business. Those companies offer rural hospitals professional management through a chief executive officer and chief financial officer from the company while giving local control to the small-town hospital and its community and board.
Fewer rural hospitals are closing, and that trend should continue because of efforts to improve collaboration and referral networks. Rural acute-care hospital closures dropped 28% to 21 in 1992, compared with 29 in 1991. A record 46 rural hospitals closed in 1988.
Several states in which population centers are scattered already have developed rural referral networks designed to develop some money-saving ventures. The most recent effort starts this month for a dozen hospitals in the Rural Nebraska Health Care Network.
The levels of Medicare and Medicaid reimbursement ultimately could seal the fate of many rural hospitals. After years of lagging behind urban hospitals, rural hospitals are doing better, and they want to keep it that way. The cumulative effect of policy changes on per-case payments since the first year of the prospective payment system is more than twice as large for rural hospitals (47.2%) as for urban hospitals (23.4%), the Prospective Payment Assessment Commission said.
The National Rural Health Association will establish its presence with a stronger lobbying effort in Washington, which should help keep reimbursements coming in at a strong rate. The coalition will boost NRHA revenues to more than $1.6 million this year in part through a new group that allows businesses to be a part of NRHA conferences in Washington.
"The realities of life are that the association has to have a constant representative in Washington," said Walter Pidgeon Jr., NRHA's executive director.
The Clinton healthcare reform package is favorable to rural healthcare providers, and they want to keep it that way. They'll need all the help they can get.