The prevailing debate over HR-1’s Rural Health Transformation Program has centered on what the program won’t deliver. Some rural leaders have raised questions about whether the $50 billion initiative will reach the providers it was designed to support; separate concerns that states may redirect funds before they reach hospitals have compounded the uncertainty.
Even so, a number of rural hospital CEOs have begun planning around the program, mapping out what the funds could enable even as the policy questions remain open. Day Kimball Health’s CEO is among the more optimistic voices in that conversation.
Kyle Kramer, CEO of Day Kimball Health in Putnam, Conn., isn’t dismissing the headwinds. Medicaid is where he starts — and where most rural hospital planning conversations begin right now.
“Everybody across the country, regardless of whether you are a large urban academic center or a small rural critical access hospital, we’re all concerned about the changes that are in play with Medicaid reimbursement,” he said in an interview with the “Becker’s Healthcare Podcast.” “Given in rural geographies there is even a more profound tendency for patients to be on Medicaid, it’s certainly a head scratcher. We are very in touch with and attuned to the whole concept of value-based care and creating a value-based enterprise as we move forward because we know that while what we do is important, the value we create and outcomes we produce are becoming even more important.”
The Rural Health Transformation Program funds won’t protect against financial challenges related to Medicaid cuts. But if used strategically, they can help rural hospitals become more sustainable in the future. Day Kimball, a formally designated rural hospital serving approximately 125,000 residents across Northeast Connecticut, Southern Massachusetts and Western Rhode Island, is actively planning around the federal policy changes.
“Rural health care transformation has been a significant discussion point over the last year or so based upon some of the tenets of HR-1,” he said. “We’re very engaged with that and are very excited about the opportunities that we have going forward.”
That optimism is grounded in a specific reading of what rural innovation requires — not just operating stability, but capital for building the clinical infrastructure that thin-margin rural hospitals have historically been unable to fund.
“The feds have given us the opportunity to create a focus on innovation and advancement, hopefully to elevate healthcare status and overall outcomes for populations in rural areas,” he said. “We’re embracing that challenge and look forward to leveraging opportunities to make a real difference for the population we serve by capitalizing upon funding opportunities, especially for rural hospitals which are not necessarily as readily available.”
Day Kimball’s focus on building toward value-based care infrastructure is leading to investment in data systems, performance measurement tools and care process redesigns that can demonstrate outcomes and position the organization to compete on value. Regardless of the funding, Mr. Kramer believes moving in this direction will give rural hospitals the best chance to succeed. And he’s not alone.
Steven Blair, MD, president and CEO of Sutter North Medical Group in Yuba City, Calif., which serves rural and high-Medicaid populations, said the future depends on growing it’s value-based care network.
“It’s really nice to be able to, even in the rural population, participate in value-based care. I think that really is the future for us,” said Dr. Blair. “There’s been some changes at the federal level with regards to Medicaid as well as Medicare funding. With those changes, the only way that we can continue to grow and deliver what we want to deliver to the patients is through value-based care approaches.”
For rural hospital leaders still weighing how to engage with the program, Mr. Kramer urges them treat the transformation funds not as a bridge covering operating losses, but as capital for building a clinical enterprise that can perform at a higher level on the other side of the cuts.
“We’re embracing that challenge and look forward to leveraging opportunities to make a real difference for the population we serve,” he said.
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