Harrisburg, PA – Governor Tom Wolf announced in December 2019 that eight more hospitals and one additional payer have agreed to participate in the Pennsylvania Rural Health Model, aimed at ensuring the financial viability of hospitals in rural areas across Pennsylvania, and the latest step in transforming health care delivery in the commonwealth. The model is the first of its kind in the nation. “I am especially pleased to see more hospitals joining this important initiative to improve their financial viability so that every Pennsylvanian has access to quality health care within a reasonable distance from home,” said Gov. Wolf.
The governor recently signed Senate Bill 314, which establishes the Rural Health Redesign Center Authority and the Pennsylvania Rural Health Redesign Center Fund. The authority and fund will administer the Pennsylvania Rural Health Model once established. “The Rural Health Model is a transformative step that changes the financial model for hospitals in rural areas,” Secretary of Health Dr. Rachel Levine said. “This is a step that will help achieve financial stability for these facilities and aims to improve the overall health of the community.”
The model will help ensure that rural hospitals, which are often an economic driver in rural areas, stay open, that jobs stay local and that sustainable access to health care is available to residents living in rural areas.
Nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at risk of closure. The department has worked closely with the federal Center for Medicare and Medicaid Innovation, the Pennsylvania Department of Human Services, the Pennsylvania Insurance Department, the Hospital and Healthsystem Association of Pennsylvania, the Hospital Council of Western Pennsylvania, the Pennsylvania Office for Rural Health to develop the model and to ensure the success of the mode. The first five participants were announced earlier in 2019. Those hospitals are Barnes Kasson, Endless Mountains, Geisinger Jersey Shore, UPMC Kane and Wayne Memorial.
Now joining those hospitals are the following eight hospitals:
- Armstrong County Memorial Hospital in Kittanning, Armstrong County
- Chan Soon-Shiong Medical Center at Windber in Windber, Somerset County
- Fulton County Medical Center in McConnellsburg, Fulton County
- Greene Hospital in Waynesburg, Greene County
- Monongahela Valley Hospital in Monongahela, Washington County
- Punxsutawney Area Hospital in Punxsutawney, Jefferson County
- Tyrone Hospital in Tyrone, Blair County
- Washington Hospital in Washington, Washington County
A total of 67 hospitals are eligible for participation in the model based on the definition of a rural hospital developed by the Center for Rural Pennsylvania. With the above 13 hospitals involved in the program, nearly 20% of eligible hospitals will be participating in the program in 2020. While this is a credit to the desire of these hospitals to provide transformative care in their area, it also means there is still much work to be done to bring sustainability to rural hospitals in Pennsylvania.
In addition, Aetna will join the five insurance providers previously announced as private insurance payers for the model to make up a total of six participating insurers. In addition to Aetna, Gateway, Geisinger, Highmark, Medicare and UPMC are also participating in the program. Together, the commercial insurers represent nearly half of the individual and small group market insurance population in the state.
The Rural Health Model is an alternative payment model, transitioning hospitals from a fee-for-service model to a global budget payment. Payment for the global budget comes from multiple-payers, including private and public insurers. Instead of hospitals getting paid when someone is admitted to the hospital, they will receive a predictable amount of money at a specified time to provide services in the community.
Through this change in payment model, the hospitals will be able to transform care locally to better meet the health needs of the community. This includes opportunities to assess items that may traditionally fall outside of the role of the hospital, such as transportation, broadband internet access, etc.
The Department of Health has developed three main strategies for improving health in rural communities. Strategies being carried out include: transforming health care delivery in rural communities; improving the population health status in rural communities; and creating health care services that match the needs of the community.