The most recent annual analysis on rural health from the health care consulting company Chartis had some interesting insights on rural hospitals, rural health and the federal Rural Health Transformation Fund (RHTF), a part of the H.R. 1 budget bill passed by Congress last year. While the entire report is worth a read, here are some key insights:
- Medicaid expansion status is positively associated with rural hospital health: While more than 40% of all rural hospitals are operating in the red, in the 10 states that have not expanded Medicaid under the Affordable Care Act that increases to 52% of all rural hospitals with operating deficits.
- The report finds that “[t]he Medicaid-related cuts outlined in H.R. 1 will severely impact cash-strapped rural hospitals”: The H.R. 1 cuts to Medicaid are expected to hit rural hospitals hard – Medicaid reimbursements are nearly 10% of net revenue for the typical rural hospital.
- The Rural Health Transformation Fund is “likely to treat symptoms but not deliver a cure” to these challenges: While the report points out many projects funded by the RHTF are proven ideas and will have a positive impact, limitations on the ability of the rural fund to directly fund hospitals, the much bigger negative impact of broader Medicaid cuts in H.R. 1, and the political focus on issues like Certificate of Need (CON) changes driven by the RHTF in some states, all combine to indicate continuing challenges for rural health and rural hospitals.
- While rural initiatives proposed by the states are welcome and needed there are some troubling signs: The Chartis review of state RHTF applications found both “inspirational and aspirational initiatives that should positively impact care delivery in rural communities” but also “provisions that may undermine the THR program’s overall effectiveness and increase safety net instability.”
Overall, The Chartis review mirrors both the promise and challenges affecting rural health from both the Medicaid cuts and the rural health fund enacted last year by Congress. As the Pennsylvania Department of Human Services Secretary Val Arkoosh explained in a recent news article, the RHTF funding is welcome but will come nowhere near replacing the Medicaid cuts coming to the state through implementation of H.R. 1:
““This RHTP grant, at most, is going to bring in a billion — maybe a tiny bit more than a billion — over the next five years,” said Arkoosh. “We’re thrilled about it, and we’re going to be able to do some really exciting, transformative things with that money. “But there is absolutely no way that $1 billion can replace $20 billion,” she added.”