From Axios

Hospitals’ business models are being upended by fundamental changes within the health care system, including one that presents a pretty existential challenge: People have far more options to get their care elsewhere these days.

Why it matters: Health systems’ responses to major demographic, social and technological change have been controversial among policymakers and economists concerned about the impact on costs and competition.

• Communities depend on having at least some emergency services available, making the survival of hospitals’ core services crucial.
• But without adaptation — which is already underway in some cases — hospitals may be facing deep red balance sheets in the not-too-distant future, leading to facility closures and shuttered services.

The big picture: Many hospitals have recovered from the sector’s post-pandemic financial slump, which was driven primarily by staffing costs and inflation. But systemic, long-term trends will continue to challenge their traditional business model.

• Many of the services that are shifting toward outpatient settings — like oncology, diagnostics and orthopedic care — are the ones that typically make hospitals the most money and effectively subsidize less profitable departments.
• When hospitals lose these higher-margin services, “you’re starving the system that needs profits to provide services that we all might need, but particularly uninsured or underinsured people might need,” said UCLA professor Jill Horwitz.

And hospitals have long claimed that much higher commercial insurance rates make up for what they say are inadequate government rates.

• But as the population ages and moves out of employer-sponsored health plans, fewer people will have commercial insurance, forcing hospitals to either cut costs or find new sources of revenue.

By the numbers: Consulting firms are projecting a bleak decade for health systems.

• Oliver Wyman recently predicted that under the status quo, hospitals will need to reduce their expenses by 15-20% by 2030 “to stay viable.”
• Boston Consulting Group last year projected that health systems’ annual financial shortfall will total more than $200 billion by 2027, and their operating margins will have dropped by 10 percentage points.
• To break even in 2027, a “typical” health system would need payment rate increases of between 5-8% annually — twice the rate growth over the last decade, according to BCG. If the load is borne solely by private insurers, hospitals will need a 10-16% year-over-year increase.

Between the lines: This is the lens through which to view health systems’ spree of mergers and acquisitions, which have increasingly drawn criticism from policymakers, regulators and economists as being anticompetitive.

• For better or worse, when hospitals have a larger market share, they are in a better position to negotiate and bring in more patients, and they can dilute some of the financial pain of poorer-performing facilities.
• And when they acquire physician practices or other outpatient clinics, they’re still getting paid for delivering care even when patients aren’t receiving it in a traditional hospital setting.
• “I think the hospitals have sort of said … ‘We can keep doing things the same way and we can just merge and get higher markups,'” said Yale economist Zack Cooper. “That push to consolidate is saying, ‘Let’s not move forward, let’s dig in.'”

Yes, but: A big bonus of outpatient care is that it’s supposed to be cheaper. But when hospitals charge more for care than an independent physician’s office would have, or they tack on facility fees, costs don’t go down.

This study assesses how, among behavioral health clinicians working in rural safety net practices, the amount of exposure to care in rural underserved communities received during training relates to confidence in skills important in their work settings, successes in jobs and communities, and anticipated retention.  The summary provides a quick overview of the study published in the Journal of Rural Health.

View the Study Summary here.

About PRISM

PRISM is a collaborative of State Primary Care Offices, Offices of Rural Health, Area Health Education Centers and other organizations that have partnered to collect data to identify and document outcomes to enhance the retention of clinicians.  Through its design, this collaborative approach builds shared interest, cooperation and group wisdom in best practices to promote retention among the states.

PRISM provides a standardized and state-of-the-art way for states to gather real-time data from clinicians as they serve in States’ and the National Health Service Corps’ (NHSC) loan repayment, scholarship and other incentive programs.  This retention data gathering system routinely surveys clinicians as they serve in these public programs to provide quality, consistent, real-time, convenient and ongoing data to inform the management and retention of clinicians in service programs.

PRISM is a complex, longitudinal data gathering system that incorporates the data collection, analysis and dissemination expertise of the Cecil G. Sheps Center for Health Services Research.  State offices can easily enter, track and manage retention questionnaires.

PRISM training and technical assistance is provided by 3RNET, supported through a contract with the National Rural Health Association with funds from the US Health Resources and Services Administration (HRSA). State collaborative members pay an annual fee to support enhancements to PRISM.

For more information contact Jackie Fannell

 

The updated Consumer Credit Explorer offers an easy way to visualize trends in U.S. consumer debt at the national, state, and even regional level. What’s new? The go-to resource from the Federal Reserve Bank of Philadelphia has been enhanced with data through Q4 2023. You can also now compare trends in up to two U.S. regions, up to two debt or credit characteristics, and up to two borrower or neighborhood demographics at once.

The tool allows you to see overall debt and types of debt, broken down by borrower age or credit score type, neighborhood income level or majority race/ethnicity, and much more, providing a unique view into household financial well-being.

See the new Consumer Credit Explorer and learn more.

Researchers at the North Carolina Rural Health Research and Policy Analysis used a recent revision of the Financial Distress Index (FDI) model to describe the relative risk of experiencing financial distress for rural hospitals and selected urban hospitals. Among the findings: over 60 percent of hospitals at highest relative risk of financial distress are in seven states:  Texas, Oklahoma, Tennessee, Alabama, Kansas, Mississippi, and Georgia.

Among findings from the Maine Rural Health Research Center: rural adults aged 18-64 are more likely than their urban counterparts to visit the emergency department in a given year; socio-demographics associated with higher rates of non-urgent ED use by rural residents include younger age, fair or poor mental and physical health, low income, public insurance coverage, and lower access to primary care.

New Data from the CDC on Preventable Premature Death. The new study from the Centers for Disease Control and Prevention (CDC) is an extension of an earlier CDC study, which showed a higher percentage of early death from the five leading causes in rural counties compared with urban counties during 2010-2017.  More recent data show that the rural-urban gap in all-cause mortality continues to widen.  In 1999, the death rate in rural areas was 7 percent higher than in urban areas; by 2019, it was 20 percent higher.  View CDC’s rural health website and  Rural Public Health At-a-Glance to find out what CDC is doing to improve the health and well-being of rural communities.

The Federal Reserve Bank of Philadelphia launched new data on the Anchor Economy Dashboard. You can now explore anchor institution economic impacts and reliance measures for the years 2004 and 2019 for all 524 U.S. regions.

In the coming weeks, they are releasing an accompanying research brief that delves deeper into the change in anchor institution reliance in the United States between 2004 and 2019. The brief will be posted to  their website and discussed at the upcoming 2024 Anchor Economy Conference in Philadelphia on May 15–16.

If you have any questions on the dashboard or this new data set, please feel free to get in touch Deborah Diamond at deborah.diamond@phil.frb.org.

The 2018 CHRONIC Care Act influenced the growth rate in MA plan enrollment by allowing plans to offer more options extending the types of benefits available to MA beneficiaries. The Act gave MA plans the flexibility to offer new supplemental benefits to address enrollees’ broader health and social needs. Now, in addition to traditional primarily health-related benefits, MA plans can offer expanded health-related benefits (e.g., in-home support services, therapeutic massage, caregiver support, home-based palliative care, and adult day health services) and special supplemental benefits for the chronically ill (SSBCI) such as food and produce, meals, transportation, and pest control.

MA plans providing any supplemental benefit were less commonly offered in noncore counties (87.2 percent of plans), followed by micropolitan counties (94.6 percent) and metropolitan counties (97.6 percent) in 2022. But only 10 to 20 percent of plans offered expanded supplemental benefits or SSBCI across all three geographies. Plans with traditional primarily health-related supplemental benefits most frequently included vision (97.6 percent), hearing (95.2 percent), fitness (94.6 percent), and dental services (93.6 percent). Significantly fewer plans offered expanded supplemental benefits and SSBCI that address beneficiaries’ broader health and social needs. Declining availability of all supplemental benefit types was seen as geography shifted from metropolitan to noncore counties.

Read the full report here.

Authors:  Edmer Lazaro, DPT, MSHCA; Dan M. Shane, PhD; Fred Ullrich, BA; Keith Mueller, PhD

The COVID-19 public health emergency (PHE) led to a dramatic increase in telehealth use owing to relaxed policies to facilitate healthcare access, but early studies demonstrated variability in telehealth utilization patterns across demographic groups. COVID-19 disproportionately affected communities of color and the socially disadvantaged, highlighting existing disparities in access and quality of care in the U.S. health system.  In early 2023, an RTRC research team conducted a systematic review to summarize available evidence from early in the COVID-19 pandemic and concluded that most available evidence showed that telehealth did not reduce disparities in access to health care during the PHE. In December 2023, the prior systematic review was updated with contemporary data using the same search strategy and methods.

Of the 523 references in our updated search, 32 met final inclusion criteria for the study. Most studies were retrospective cohort studies using before-after methodology, and telehealth utilization was the most common study outcome. Compared to the initial search, more of the papers included in this search focused on total health care utilization (instead of telehealth-only utilization), but overall, conclusions were similar. Telehealth utilization, in aggregate, increased more slowly among disadvantaged groups, such as older, more rural, Black, and economically disadvantaged populations than in less disadvantaged populations over the course of the PHE.

Please click here to read the brief.