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How PA’s Rural Health Model Helped Hospitals Survive COVID-19

National association leader calls model ‘crown jewel’ for innovative health care delivery

February 09, 2022

Pennsylvania’s Rural Health Model has served as a lifeline to protect some of the state’s rural hospitals from closure during the COVID-19 pandemic, a panel of rural health care leaders testified today.

This morning, The Center for Rural Pennsylvania hosted a hearing about Pennsylvania’s Rural Health Model, featuring state and national officials who have been involved in the program since its founding.

Launched during 2019, the model aims to ensure Pennsylvania’s rural hospitals can continue to be anchors within their communities, providing facilities with predictable revenue sources and a directive to transform care.

With scheduled procedures halted and patient volumes declining during March 2020, rural hospitals relied on these predictable revenue sources to maintain care, leaders from rural hospitals testified.

“Stable cash flow to a small rural hospital is tantamount to its existence,” said Loren Stone, CEO of Endless Mountains Health Systems.

Among the important takeaways from the hearing:

  • Transformation plans:  Participating hospitals are implementing transformation plans to change the ways care is delivered in their communities. These plans focus on sustainability, improving health, and managing chronic conditions long before patients require hospitalization for emergencies
  • Examples of progress:  Rural hospitals are improving access to specialists through telehealth and in-person care. Regional partnerships have enabled hospitals to expand the services available in their communities
  • Transitioning from fee-for-service:  Rural hospitals serve communities with far fewer people than their urban counterparts. The global budget model provides rural hospitals with predictable revenue, so they can move away from chasing patient volume
  • More time:  Given the pandemic, additional time is needed to assess how the program should evolve to meet the needs of hospitals and rural communities
  • Important mission:  Without innovative models and new incentives, the nation’s rural hospitals face significant challenges to avoid closure

The stable revenue was particularly important at the outset of the pandemic and has supported hospitals as they treat high-cost COVID-19 admissions, the panelists said.

“The one thing I can say about this model is it works,” said Thomas Kurtz, president and CEO of Chan Soon-Shiong Medical Center at Windber.

The model also has fostered “creativity, cooperation, and collaboration,” among hospitals, payors, and other stakeholders, said John Lewis, president and CEO of Armstrong Center for Medicine and Health Hospital. Having ongoing revenue sources helps hospitals focus on the patient experience, the management of chronic conditions, and other population health efforts.

Rural hospitals often care for patients with significant health needs and are disproportionately dependent on government payors, said Kate Slatt, HAP’s vice president, innovative payment and care delivery. They also face unique recruitment and retention challenges.

Since 2019, the model has grown to include 18 hospitals and six payors, and has exceeded one million covered lives.

“The model allows rural hospitals to step off the fee-for-service hamster wheel and focus on what their communities actually need,” she said.

National Rural Health Association Chief Operations Officer Brock Slabach called Pennsylvania’s new model a “crown jewel” among rural innovation projects and a catalyst for change. Including private and public payors in the program has helped align incentives, he said.

HAP applauds Pennsylvania’s rural providers for their outstanding care and continues to advocate for state and federal resources that will preserve rural health care across Pennsylvania.

For additional information about Pennsylvania’s Rural Health Model, contact Kate Slatt, HAP’s vice president, innovative payment and care delivery.