'We're in a different era': Dr. Richard Watson weighs in on rural emergency hospital rule

Rural hospitals are the backbone of their small towns, Richard Watson, MD, said.

"If you lose your healthcare, you really do lose the town in a lot of ways," Dr. Watson told Becker's. 

Dr. Watson grew up in Kansas and has rural emergency medicine experience in his home state and in Alaska. He has served as an American Medical Association delegate, founded a physician-owned air medical transport company in the Midwest called LifeSave, and founded the healthcare IT company Motient. 

To help address the challenges rural hospitals are facing, CMS unveiled its proposed rural emergency hospital program in June and is expected to issue the final rule this fall. The program, set to begin in January, aims to curb rural hospital closures by offering them a chance to close infrequently used inpatient beds and focus on providing outpatient hospital and emergency department services. 

Dr. Watson applauded CMS for the way the agency approached the proposal. He said he's talked with state hospital associations and providers across the U.S. who said CMS did listen to their input.  

"I think it was well thought out, but we're in a new era right now," Dr. Watson said. "We came through COVID. This legislation hit the deck in 2020 as far as definitions, but we've seen things in the last two years that we really need to rethink how we approach the value of the rural health system." 

Dr. Watson said that at a time when there are struggles with inpatient capacity, "here we are talking about eliminating inpatient capacity."

"I know right now they're selling it as being a small number of hospitals that are either going to go under or accept the new designation, but I think honestly we've got to think about how margin affects healthcare," he said. "I think this idea of what is margin in healthcare is super important. We have stockpiles of medication, we have stockpiles of ventilators, and yet do we incentivize hospital healthcare workers in margining in that area as well? I know there's a real need to rethink how we look at the rural system and the reimbursement around that, and I think there's some really healthy ways, but I think we need to think about margin and how we invest in critical healthcare infrastructure that is resilient against the surges we just went through."

Dr. Watson said he'd like to see a novel type of reimbursement for rural hospitals. There's currently a lot of focus on value-based care, which he said he champions.

"I think there's so much power in allowing the people who are making the healthcare decisions to have the power to spend the dollars," he said. "I just think that's what we've got to get to in some way, shape or form. So in this rural emergency hospital designation, is there a way that, No. 1, the beds can be flexible? I know they're saying no acute inpatient beds, but could there be language that allows in times of emergency declaration for them to easily be converted to inpatient hospital beds and at least have this idea that there's a real easy method to move between skilled nursing, acute care and emergency beds?"

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