PHM and Rural Healthcare — Part 2

In a post last month, I explored the current state of rural healthcare in America. Building on that theme, I now want to look at how the concept of population health management (PHM) can play a key role in improving health outcomes in rural areas. While it might not be the first setting one thinks of when considering a population health approach, when done with an eye toward leveraging existing resources and forging strong bonds between community and clinical partners, PHM can be a dynamic way to deliver quality care.

Why Population Health in Rural Settings?

I always like to start with definitions when possible, and I think that since the term “population health” is so flexible, we need to be specific when applying it to various situations. Since we’ll be discussing rural America in this post, I think this definition by the CDC works well:

“CDC views population health as an interdisciplinary, customizable approach that allows health departments to connect practice to policy for change to happen locally. This approach utilizes non-traditional partnerships among different sectors of the community – public health, industry, academia, health care, local government entities, etc. – to achieve positive health outcomes. Population health ‘brings significant health concerns into focus and addresses ways that resources can be allocated to overcome the problems that drive poor health conditions in the population.’”

The emphasis here is mine. To me, the aspects highlighted in this definition contribute to effective population health management in rural settings: a focus on care change happening locally; healthcare entities actively partnering with community-based organizations, sometimes with the assistance of bridge organizations that navigate patients between clinical and behavioral health centers, the latter of which usually provide mental health and substance abuse disorder treatment services; and allocating scarce healthcare resources to those patient populations that will most benefit from them.

So why should we consider applying a population health approach in rural settings? On the face of it, there are a raft of challenges that might make such an enterprise appear daunting: for starters, rural hospitals are on average far smaller than their urban counterparts, and they also have much less money at their disposal. A report by the Center for Healthcare Quality and Payment Reform provides a few details that point in this direction:

  • Most urban hospitals have over 200 inpatient beds, whereas most rural hospitals have 25 or fewer beds.
  • One-half of urban hospitals have expenses of more than $250 million, whereas only 2% of rural hospitals are that large.
  • One-half of rural hospitals have total expenses of less than $35 million, compared to only 4% of urban hospitals.

In addition to these numbers, the American Hospital Association points out that “59% of the decline in the number of U.S. community hospitals between 2015 and 2019 were rural hospitals,” and an article out of the Leonard Davis Institute of Health Economics at Penn notes that “rural hospitals typically have less than half the median profit margins of urban hospitals.” As a consequence, the same Penn article highlights the fact that in excess of “130 facilities have closed since 2010” leaving “about 2,250 remaining rural hospitals out of about 5,000 facilities nationwide.”

All this leaves aside the stark reality of a physician shortage in the U.S. While this shortfall is hitting the nation as a whole, it is most pronounced in rural areas, a fact that makes coordination of care – a hallmark of population health management – much more challenging. Indeed, according to data provided by the National Rural Health Association, the patient-to-primary care physician ratio in rural areas falls far short of that in urban areas: 39.8 physicians versus 53.3 physicians per 100,000 people, respectively. Further, as an article by the Association of American Medical Colleges mentions, “while 20% of the U.S. population lives in rural communities, only 11% of physicians practice in such areas.” 

This being the case, I’ll ask again: why should we consider applying a population health approach in less densely inhabited settings? Answers vary, but many believe that, despite the drawbacks mentioned above, rural areas hold some relative advantages to their urban counterparts. In a report titled “Advancing Population Health in Rural Places: Key Lessons and Policy Opportunities” by the Rural Policy Research Institute (RUPRI), the authors highlight eight resources (framed as areas of “capital”) that make less populated areas a favorable training ground for PHM solutions.

While some of these “areas of capital” may strain credulity – pointing to rural areas as home to more walkable areas than urban areas, for instance, might be a bit far-fetched – by-and-large the authors have a point. Most importantly for our purposes, two themes run throughout many of these areas of emphasis that redound to population health’s advantage: 1) healthcare entities’ familiarity with community partners and 2) an emphasis on local solutions. If I were to boil these ideas down still further, the common denominator here seems to be a strong sense of trust.

Building Clinical-Social Bonds

This idea of relatively deeper bonds of trust existing between residents and institutions in rural settings is an interesting one, and one that’s borne out by the numbers. For instance, a 2018 Pew Research survey found that, while inhabitants of urban, suburban, and rural areas report a nearly equal familiarity with at least some of their neighbors (53% vs. 49% vs. 47%, respectively), and despite the fact that adults in all three geographic categories attest to similar levels of attachment to their local community, “about six-in-ten of those in the suburbs (62%) and in rural communities (61%) say they have a neighbor they would trust with a set of keys to their home, compared with about half (48%) in urban areas.”

In a similar vein, a 2021 report by the Survey Center of American Life found that “Americans in more densely inhabited places are…much less willing to leave their doors unlocked,” with just 35 percent of those residing in big cities being willing to leave the doors of their homes unlocked versus 69 percent in rural settings.

While these examples may seem superficial at first glance, I think they reinforce a larger point that once a personal bond is formed, this relationship often rests on a more solid foundation in rural areas than it does in others (at least insofar as people self-report their personal inclinations). To this point, the authors of a study called “Growing Up in Rural America,” which was produced by the Johns Hopkins University Project Muse program, noted that, when it comes to social bonds between rural residents, “the importance of local social relationships and working collectively on common issues and the limited number of neighbors makes developing these relationships easier.”

For instance, the authors point out that rural counties often boast infrastructure that facilitates greater communication between healthcare entities and community-based organizations, a key partnership when trying to open up care access to all segments of society. “For example,” the RUPRI report tells us, “a grocery store could collaborate with the hospital on promoting healthy diet changes. Similarly, a school could be a common point of contact for informing community residents about how the hospital and other community organizations can address needs such as hunger and housing.”

Building on this idea, the same report argues that deep reserves of political capital exist in many rural communities such that “the influence that individuals and organizations hold…can be used to achieve population health goals. Unlike in larger communities,” the report goes on to say, “rural leaders of population health activities are likely to be individuals that community members know personally. This familiarity can facilitate trust and community buy-in throughout the process.”

The bottom line is this: we can expect stronger social and institutional bonds to exist in less populated places, and these relationships can persuade folks otherwise disinclined to seeking medical or behavioral care to do so.

Who Pays for Population Health?

With all this talk of building reserves of trust and strategically realigning healthcare resources in rural settings, it’s important to identify how population health approaches are funded. I should start by saying that none of the research I’ve done suggests that implementing this type of care delivery model is easy or straightforward, no matter what environment you’re talking about. And arguably the biggest barrier a site or system will face is in regards to cost.

Plainly stated, it costs money to implement electronic health record platforms and closed-loop communications systems. It costs money to allocate staff time to working closely with community health partners. It costs money (not to mention time) to change workflows that more tightly coordinate care between providers.

To my mind, if we proceed with our eyes open to this reality, we’ll be better equipped to identify strategies that work in the real world. With this in mind, let’s focus on a few trends that have begun to emerge that allow population health management to flourish in rural communities where non-clinical social determinants of health (SDOH) play a substantial role in people’s health outcomes.

Private and Public Insurance

More and more these days, insurers are better able to reimburse healthcare providers for addressing SDOH. For example, in a report called “Advancing Population Health in Rural Places: Key Lessons and Policy Opportunities,” which was produced by RUPRI, the authors note the following:

“Medicare Advantage (MA) plans can now pay for services addressing some social determinants of health, such as transportation (including to grocery stores), meal kits, and telehealth; and Medicaid can use managed care organizations, State plan amendments, and waivers to do the same.”

While a range of insurers can support such an effort, rural settings often feature a unique payer mix that could present roadblocks for the faint of heart. In their 2019 Rural Report, the American Hospital Association noted that “Rural hospitals are more likely to serve a population that relies on Medicare and Medicaid. However, these programs reimburse less than the cost of providing care, making rural hospitals especially vulnerable to policy changes in payment of services.” 

The difference in reimbursement levels between public and private insurers is pretty staggering. In one Kaiser Family Foundation issue brief, the authors reviewed the findings of 19 studies that compared Medicare and private health insurance payment rates for both physician services and hospital care. I was bowled over by the results: “Private insurers,” note the authors, “paid nearly double Medicare rates for all hospital services (199% of Medicare rates, on average), ranging from 141% to 259% of Medicare rates across the reviewed studies.”

Of the eight studies considered in the issue brief that compared private insurance to Medicare payment rates for inpatient hospital services, “Private insurance payment rates for inpatient hospital services averaged 189% of Medicare rates across studies.” This gulf in reimbursement levels helps illustrate the challenges facing CMS when it tries to entice rural healthcare practitioners into entering risk-based contracts, some of which are built around population health management: in an environment where healthcare providers are getting lower payments for their services, it’s not immediately clear why most would want to risk being further penalized for not meeting quality benchmarks. 

Left out of this discussion so far have been private health insurance companies. While accounting for relatively fewer beneficiaries in rural America, it’s noteworthy that these companies often take their cues from CMS. This is no more true than when it comes to employing risk-based models that foreground accountable care. Leaving aside the fact that some private insurers collaborate with CMS to administer Medicare, i.e. through Medicare Advantage plans, private insurers have followed CMS’ lead in structuring value-based reimbursement models.

Of note, in 2021 the Health Care Payment Learning & Action Network (LAN) reported that “Private payers covered 62 percent of the lives represented in the LAN’s data…Additionally, more payments made to providers by private payers (11.1 percent) were tied to two-sided risk models in 2019. The report shows that 53.5 percent of payments were from fee-for-service, too.”    

In addition to the preponderance of government-funded healthcare in rural counties, the composition of patient populations in such places also presents challenges. This patient mix often involves older, less affluent, and sicker patients than other settings. Added to this is the fact that there are simply fewer patients to pay for services, which makes providing quality care, and ensuring access to that care equally across demographic segments, not as straightforward as in other, more well-funded settings.

Indeed, in a document titled “Report of the Council on Medical Service: Addressing Payment and Delivery in Rural Hospitals,” the American Medical Association notes the following:

“Low patient volume represents a persistent challenge to the financial viability of rural hospitals. There is a minimum level of cost needed to maintain the staff and equipment required to provide a particular type of service, whether it be an ED, a laboratory, or a primary care clinic. As a result, the average cost per service will be higher at a hospital that has fewer patients.”

Bridge Organizations

On the topic of insurer-funded population health, in recent years a consensus has been forming around the idea that gaps exist between clinical care and community services, the latter of which is commonly classified as a mix of mental health and substance abuse disorder treatment, otherwise known as behavioral health.

In response to this, CMS has begun making a significant push to facilitate connections between clinical and community-based health organizations. Funding so-called “bridge organizations” to connect these two entities, CMS is signaling its willingness to support this type of care coordination both financially and logistically.

One high-profile example of this effort is a care delivery model called the Accountable Health Communities Model (AHCM). Initiated by CMS in 2017, the AHCM tests “whether systematically identifying and addressing the health-related social needs of Medicare and Medicaid beneficiaries’ (sic) through screening, referral, and community navigation services will impact health care costs and reduce health care utilization.” In other words, by addressing non-clinical SDOH, this CMS Innovation Model seeks to lower overall costs and improve health outcomes for Medicare and Medicaid populations served by participating organizations. 

Of the thirty-two original participants in the program, twenty-eight organizations remained as of 2021. Throughout its existence, the model has sought to address non-clinical, health-related social needs such as “housing instability, food insecurity, utility needs, interpersonal violence, and transportation needs” along two different tracks:

Assistance Track – Provide community service navigation services to assist high-risk beneficiaries with accessing services to address health-related social needs

Alignment Track – Encourage partner alignment to ensure that community services are available and responsive to the needs of the beneficiaries

The results of the program have been mixed, but offer some cause for optimism. A 2020 report noted that most data collected on program participants up to that point had been for Medicare fee-for-service beneficiaries, whereas the authors speculated that the program would yield the biggest value to Medicaid patients. Since not much data was available on Medicaid patients at the time of the report, however, evaluation of the program’s true reach remains elusive:

“The early impact analysis, which focused on Medicare FFS beneficiaries in the Assistance Track, shows reductions in the number of ED visits, although impacts on other outcomes were not statistically significant. The lack of statistical significance is attributable partially to the relatively few Medicare beneficiaries exposed to the Assistance Track intervention in the first year…Future analyses will incorporate data for Medicaid beneficiaries, who comprise more than 70% of the navigation-eligible sample.”

State-Level Patient Navigation

Although not affiliated with the AHCM, a state-level initiative in the AHCM mold that’s yielding encouraging results is Colorado’s Regional Accountable Entities (RAE) program. Designed to provide bridging services between clinical and community-based health organizations to keep patients out of the hospital system, the RAE program is an outgrowth of a reform effort within the state’s Medicaid program, which is called Health First Colorado.

From its inception in 2018, this restructuring effort promised to have a significant impact on Colorado residents living in rural areas, since three quarters of a million people reside in rural-designated areas of the state. About 300,000 of these Coloradans are enrolled in Medicare, Medicaid, or both. Indeed, states an article on the Colorado Health Institute’s website, “Rural Colorado counties have higher rates of public insurance enrollment than their urban counterparts (38.7 percent compared to 33.5 percent).”

Like the AHCM, the RAE program – which includes seven distinct entities and is part of a larger, two-part restructuring of Colorado’s Medicaid program called the “Accountable Care Collaborative” – is turbocharging integration of primary care and behavioral health services on behalf of its Medicaid population. The program’s core goals align with two major aims of population health management:

“The RAEs’ responsibilities include ensuring Health First Colorado members have access to primary care and behavioral health services, coordinating members’ care and monitoring data to ensure members are receiving quality care.”

The emphasis here is mine. In addition to prioritizing access to care and data monitoring, bonus payments are used to incentivize primary care doctors affiliated with the RAEs to improve the care they provide. This risk-sharing aspect works to hold the private organizations that coordinate the efforts of the state’s RAEs (and administer Medicaid services) accountable for providing quality care. Accountable care is another hallmark of value-based payment models, which in turn are closely associated with population health management.     

Nonprofit Hospitals

Besides payers, tax-exempt hospitals can also be drivers of population health adoption. In order to keep their tax-exempt status under Section 501(c)(3) and Revenue Ruling 69-545PDF, hospital organizations are required to meet certain requirements that address the health needs of the communities in which they operate.

Among other requirements, the IRS mandates that every three years these tax-exempt organizations conduct a Community Health Needs Assessments, or CHNAs. Further, after completing a CHNA, these organizations must develop a plan to remediate identified problems.

I wrote about CHNAs in a prior post so I won’t go into much depth here, but suffice it to say that CHNAs “Take into account input from persons who represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health.” In addition to the views of public health authorities, insights from representatives of “medically underserved, low-income, and minority populations” are also taken into account. 

Although CHNAs – along with an associated community benefit mechanism called Community Health Implementation Plans (CHIP) – should be essential tools in any nonprofit hospital’s PHM arsenal, some feel they’re not living up to the hype. As the authors of a 2020 scoping study pointed out, while CHNAs and CHIP hold great promise for incentivizing population health adoption, some articles “continue to suggest that non-profit hospitals should take a larger role in population health improvement and to use community benefit as cornerstone of such work.”

In 2021, of the 85% of American hospitals designated as “community hospitals” (defined as “All nonfederal, short-term general, and specialty hospitals whose facilities and services are available to the public”), there were 2,978 nonprofit hospitals in the U.S., as compared to 1,235 for-profit hospitals and 944 in the “state/local government hospital” category. With the majority of hospitals having to fulfill a mandate to segment out and prioritize care delivery to the distinct patient populations they serve, nonprofit hospitals should act as an incubator for effective population health management.

There is much more ground to cover when it comes to PHM in rural America, and it’s a subject to which I’ll likely return in the future. I’ll leave it there for now, but will continue to learn all I can about this fascinating topic.

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