The non-profit organization Michigan Rural Healthcare Preservation, was formed in 2009 to address the critical stresses facing America's rural healthcare providers.
Small rural hospitals typically have a poor payer mix, predominantly Medicaid and Medicare, accumulating bad debt, and over reliance on primary care and emergency services. "We came to realize that the small rural hospital in towns across the country are under tremendous stressors to survive and the general precursor to that stress is the hospital's reliance on primary care and emergency care for the bulk of their revenue," says Ethan Lipkind, JD, CEO of the Michigan Rural Healthcare Preservation Holding Co. Mr. Lipkind is a healthcare regulatory compliance attorney and the CEO of Michigan Clinic, a healthcare provider holding company. "Paradoxically, ER and Primary Care are services most essential to maintain locally, but also most difficult to generate revenues for local providers."
The goal was to help these facilities avoid filing for bankruptcy and certain closure so that they could continue providing critical services to their communities. MRHP had a three-fold equation:
1. Fostering and building relationships with elite specialists in various fields to develop surgical service lines at remote facilities. "We hoped this would allow patients in rural communities to receive stellar specialty care close to home while simultaneously generating needed revenue streams for these providers," says Mr. Lipkind.
2. Bringing superior operational efficiencies and management to these facilities. "We have found a tremendous amount of slack when it comes to rural hospital administration where the mentality is too often that we do things one way because they've always been done that way," says Mr. Lipkind. "Such a mentality may have worked previously, but given the way our healthcare system operates today, and the myriad challenges facing rural hospitals, such attitudes are simply inappropriate and lead to tragic outcomes with little hope of long-term sustainability for these providers of care."
3. Unify hospitals that are part of the MRHP program — and those that aren't — to work jointly and share resources and services that will ultimately reduce operational costs.
"These hospitals are economic engines of their communities," says Mr. Lipkind. "They are often the largest employers in town and they produce a sizable trickle down effect where other local businesses depend on the hospital thriving in order to generate business for themselves. Small businesses are grateful for robust patient flow and activity at the hospital since that results in desperately needed additional business for local restaurants, gas stations and B&Bs."
For these rural providers, another possible alternative to closure or MRHP is being acquired by a large healthcare system. "A large provider that runs a tertiary care center in the closest big city has no interest in maintaining an abundance of services in the rural hospital locally, but is all too happy to acquire the rural hospital cheaply and then convert it into a patient referral center for the centralized city hospital," says Mr. Lipkind. "In essence, this option entails converting what was once a rural hospital into a glorified clinic sending patients out of the community."
MRHP aims to reverse that patient flow; the specialists from larger hospitals go out to the rural hospitals to perform surgeries or cases a few days per week. Equally importantly, they are able to provide the same quality of care at the rural hospital, or perhaps even better care
"We found the quality of care of patients is actually better at the rural hospital relative to the larger healthcare system, which, I realize, may be counterintuitive," says Mr. Lipkind. "With the advancement of medical science and medical engineering, we are able to safely perform a tremendous variety of procedures that may have been unthinkable for a smaller facility just a few decades ago."
Minimally invasive techniques are available for many procedures, and medical technologies like surgical tools and implants are advanced and exceptionally mobile so that a small hospital OR can be essentially identical to that of its much larger peers. Moreover, in the smaller hospital environment, nurses and staff are able to cater to the specialists better than at the big hospitals and create a more intimate patient experience.
"For example, on the neurosurgery day at the rural hospital, the entire hospital converts into a neuroscience institute of excellence for that day," says Mr. Lipkind. "Patients receive a lot of personal attention from everyone. You won't find that at larger institutions where surgeons are fighting over OR time and trying to get their patient to the head of the line for an MRI or CT scan."
After partnering with MRHP, many facilities have experienced tremendous growth and significant incremental financial improvement. But that doesn't mean the hospitals are safe forever. The healthcare environment is constantly changing and could present new challenges in the future.
"There is a lot of work to be done in the industry and we have to be careful not to generate a sense of arrogance or worse, complacency, for our success; instead we need to focus on what we can still do better," says Mr. Lipkind.
"Our country's healthcare system is moving away from acute care treatment to chronic care management and fee-for-service is quickly diminishing," adds Mr. Lipkind. "This transformation leads patients away from large hospitals and other expensive points of care into more cost-effective settings like ASCs and other outpatient environments."
"I think hospitals in general are a dying business and I think that long term we are going to see certain academic medical centers where the most complex diagnoses are treated, but the vast majority of hospitals will need to adapt and transition into providers of urgent and emergency care coupled with trauma centers," says Mr. Lipkind. "The bulk of the rest of patient treatment will take place in ASCs or other outpatient settings, perhaps even in the patient's home."