Rural Hospitals Struggle Amid Budgetary Constraints, Reporting Requirements
EXECUTIVE SUMMARY
The COVID-19 pandemic response has pushed many rural hospitals to the brink, placing added strains on skeletal workforces that have long struggled to meet the healthcare needs of their communities. While some smaller facilities are pitching in to help larger, urban centers manage capacity, others have seen their patient volumes dwindle as fear keeps patients from accessing needed care. Most conclude the pandemic is highlighting the need for change in the way healthcare is delivered to rural communities.
- In Texas, the traditional transfer pattern has flipped: Many rural hospitals are accepting patients from large, urban facilities that are overrun with COVID-19 patients.
- Rural hospitals in Pennsylvania have faced hurdles trying to keep up with ever-changing policies and an avalanche of reporting requirements from state and federal agencies.
- Patient volume is way down in hospitals throughout rural Colorado, even as they strive to be ready for any potential spikes in COVID-19.
- A bright spot for many rural hospitals is the advancement of telemedicine. However, broadband limitations continue to hinder expansion in some areas.
Hospitals across the United States have their hands full dealing with COVID-19 pandemic-related obstacles that are straining resources and increasing the stress levels of frontline providers. Meanwhile, hospitals in many rural communities are facing added concerns.
Many have seen their already precarious financial health pushed almost to the breaking point while staff struggle to keep up with ever-changing medical advisories and reporting requirements. All this on top of meeting the care needs of their communities in an environment where many patients fear accessing care.
The pandemic is shining a harsh spotlight on America’s rural healthcare infrastructure, making it difficult for policymakers to look away from structural and access-to-care problems that have long plagued America’s sparsely populated communities.
The rural hospitals of hard-hit Texas are facing unprecedented challenges with the COVID-19 pandemic, but they also are rising to challenges in ways they never have before, explains John Henderson, MBA, president and CEO of the Texas Organization of Rural and Community Hospitals.
“Historically, rural hospitals with patients that exceed their capacity refer and transfer patients to the larger urban hospitals,” Henderson explains. “That transfer pattern has actually flipped, where rural hospitals are accepting transfer from the urban centers of both COVID and non-COVID patients to help manage bed capacity issues.”
These new responsibilities have forced frontline and inpatient providers who work in rural facilities to stretch, Henderson observes. “But most are willing and wanting to be part of the solution, and rural Texas hospitals generally have bed capacity,” he shares. “The stressful part is trying to staff [this surge].”
For instance, Henderson notes the CEO of one rural hospital indicated in late July he usually staffs for a med-surge inpatient census of five patients with no ICU beds. However, in that moment, the CEO had to handle 14 COVID-19 patients. “That is at the limits of what that small hospital can do,” Henderson reports. “[The rural hospitals] are happy to do it, and I think they are meeting the need and will continue to do that, but fatigue is a factor.”
Another limiting factor is the reality that many rural hospitals have no ICU capacity, which means they cannot support patients requiring ventilators. “That is not realistic for most of the rural hospitals in Texas,” Henderson says. “Some have ICUs, and some have patients with ventilators, but that is probably the minority of rural hospitals in Texas.”
Certainly, EDs are feeling the pressure, and clinician recruitment has been an issue for rural hospitals in the state since long before the pandemic, Henderson notes. “The hospital in Anahuac, TX [near the Gulf of Mexico] called me, and they generally have a very low-volume ED that they cover pretty easily with a single physician,” he observes. “They’ve gone to two physicians 24/7 in their ED to handle the surge in patients.”
One facility that has weathered more challenges than most is the hospital in Rio Grande City. In late July, providers in that border town experienced a “worst-case scenario.” Not only was the facility filled to capacity with COVID-19 patients, staff were caring for victims of a tropical storm that recently swept through the area. “It was like a double-whammy,” Henderson says. “They haven’t buckled yet, but they are struggling.”
The state has responded to the workforce shortages, sending thousands of nurses to the Rio Grande Valley. “That was certainly helpful. The reaction, though, has been staffing requests from all over Texas that the state is struggling to respond to,” Henderson shares.
A silver lining of the pandemic response in Texas has been the progress on telemedicine. “Most rural Texas hospitals have embraced telemedicine; if not before the crisis, they have now accelerated their deployment and implementation [of telemedicine],” Henderson says.
One good example of how telemedicine has facilitated effective care involves a hospital in Dumas, TX, located in Moore County in the Panhandle where a COVID-19 outbreak at a meatpacking plant occurred. “They were able to lean on intensivists and hospitalist-type physicians who were not on site to manage these complicated, respiratory patients and keep them in house,” Henderson explains.
Perhaps the biggest challenges facing rural hospitals in their efforts to battle the pandemic are their enduring budgetary concerns. “Before the pandemic, 44% of rural Texas hospitals had negative operating margins, making them very vulnerable,” Henderson relates. “In April, I was getting calls daily from those that were truly on the ropes and couldn’t make it through another payroll cycle.”
Many of these facilities had maxed out their credit and were in real trouble. There were three hospitals in bankruptcy when the pandemic began. “I was worried we were going have another round of closures,” Henderson says.
However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which became law in March, funneled $10 billion specifically to rural hospitals and clinics, helping these entities avoid dire financial consequences, at least for now. Henderson says by early May, Texas facilities began enjoying the benefits of the CARES Act.
What should hospital administrators and policymakers learn from the pandemic experience? “One [thing] is the importance of access to care and hospital capacity. Some of the rural Texas hospitals that closed [prior to the pandemic] — I know we wish we had that capacity today,” Henderson explains. “The healthcare system ... probably hasn’t performed as well as we would like in a country that spends $4 trillion a year on healthcare. I think it is fair to expect a better result than we have seen.”
Lisa Davis, MHA, director of the Pennsylvania Office of Rural Health, notes rural hospitals in her state did not struggle to activate their emergency plans, ramp up, or make any changes they needed to make in their facilities. However, she notes the administrative burden has been crushing. “All the activity within the federal agencies ... as well as our Pennsylvania emergency medical agencies — suddenly, everyone is on high alert. All of the agencies are reviewing all of their policies, procedures, and regulations and trying to get them aligned to address a pandemic,” Davis explains. “All of those pieces are interrelated. One of the big issues that we saw with policy and regulation was just an enormous amount of communication coming out.”
Particularly in the early days of the pandemic, a lot of the information would change from day to day, making it difficult for small, rural hospitals to keep up. “The reporting that needed to go to the federal government was really on the demand side: how many beds you are using, how many respirators are you are using, how much PPE you are using, and so on. Those reports needed to be submitted by 5 p.m. every day,” Davis notes. “On the state side, they were really looking at the supply component: how much PPE do you have available, how many respirators do you have available, and how many beds do you have, what kind of staff do you have ... and those reports needed to submitted three times a day.”
Unlike many rural hospitals in Texas that saw volume spikes, most rural facilities in Pennsylvania have experienced significant volume declines, particularly in the early weeks of the pandemic. “Emergency departments were essentially empty. People were not coming to the ED, even when they should have, whether or not [the issue] was COVID-related,” Davis says. “Rural hospitals were not seeing a large number of COVID patients in general ... for those patients they were seeing, only a small percentage needed to be hospitalized. The rest were sent home to self-quarantine and recover there.”
By mid-summer, elective surgeries resumed, but volume in the EDs of rural hospitals remained well below normal levels. As with the Texas hospitals, CARES Act funding helped tremendously in helping offset lost revenue. Still, rural hospitals struggled with properly accounting for all the funds. “The chief financial officer of one of our critical access hospitals said he was petrified to spend any of this money because he only has two people in the hospital’s accounting office, and they have never had to deal with something like this,” Davis relates. “The concern was being able to bring the funds in, spend them appropriately, and assure that the funds were not duplicating other pandemic funding or being used to support non-eligible types of services or expenses [for which] the hospital would then later be penalized.”
Another problem is that some CARES Act funding was earmarked specifically for fee-for-service or traditional Medicare patients. “We have some hospitals that have no traditional Medicare [patients], just Medicare Advantage,” explains Davis, noting Pennsylvania has one of the highest penetrations in the country of Medicare Advantage plan coverage. “They were seeing enormous deficits coming to them because what they estimated would be their funding from [the CARES Act] did not materialize.”
Some rural hospitals in the state have faced shortages of testing supplies and PPE. “One hospital administrator whose hospital is very close to the New York state border ... went up to Binghamton, NY, knocked on doors, and got PPE up there because he wasn’t able to get it in [Pennsylvania],” Davis recalls.
As with Texas, the relaxing of regulations regarding telehealth has been hugely beneficial in expanding access to care to residents in rural parts of Pennsylvania during the pandemic. Of particular importance to the state is the expanding definition of telehealth to include phone encounters. “We are one of the states that is having real problems with access to broadband and internet across the state, especially in rural communities, so that has helped tremendously,” Davis explains. “Also, commercial payers have stepped up to cover more telehealth services. That has been really helpful.” Davis cautions that telehealth cannot deliver all the forms of care people require. “It is not a panacea ... but it sure does help,” she says.
Currently, while Pennsylvania is experiencing a bit of a breather from spikes in COVID-19 patients, the state is working with rural hospitals to help them assess what worked well from their emergency plans and what did not. That way, any adjustments can be made before potential surges occur.
Unlike in Texas, rural hospitals in Pennsylvania have not been called on to help manage capacity overflows from urban facilities. However, there is growing concern about potential COVID-19 outbreaks as many urban dwellers flee to the country to escape the virus and students return to campuses. “My office is at Pennsylvania State University. We have 23 campuses, many of which are in rural communities. We also have a state system of higher education that has 14 universities, all of which are in rural communities,” Davis explains. “There is only a guess as to what this is going to mean for transmission of COVID-19 ... and the expectation is that this is not going to be good.”
Rural hospitals in Colorado are struggling to combat public fear about accessing care. “We have definitely struggled with getting patients back in. Volumes in the ED continue to fluctuate in most of our [facilities],” observes Michelle Mills, CEO of the Colorado Rural Health Center in the State Office of Rural Health. “Some days, [volume] is close to what pre-COVID experiences were; on other days, it is way, way down.”
Consequently, hospitals have been working with the communities they serve to help people understand that it is safe to come back and what procedures have been put in place to protect patients. The biggest concern is someone who is experiencing an emergency may not come in because he or she is afraid, Mills says.
It is true many rural hospitals in Colorado lack ICU capacity, but Gov. Jared Polis moved quickly and proactively to address the issue. “The state set up three separate locations to be able to help with overflow should additional ICU beds be needed,” Mills says. “One [ICU overflow site] is in metropolitan Denver. There is one in the north part of our state and another site that is over on the Western Slope.”
While many EDs in rural hospitals have used telehealth for stroke patients for a long time, other parts of the health system, such as rural health clinics, have faced challenges in “standing up” telehealth capabilities. For instance, there have been many questions about how to bill for telehealth visits and how to spread the word out about telehealth. “Those things are continuing to be worked on right now. I think there are still some barriers in terms of acceptance by the community of that type of care,” Mills says. “Of course, we continue to have some broadband issues as well that have made telehealth a little bit harder.”
Rural hospitals in Colorado currently have sufficient supplies of PPE, but potential shortages of important supplies remain a concern. “Our state numbers [of COVID-19 cases] are starting to tick up again. There is some concern about whether there are going to be shortages again,” Mills says. “There definitely was a difficult time at the start [of the pandemic] in getting PPE, but our state has been great about setting up a way for people to be able to work together to obtain [needed supplies] from each other.”
Mills says the pandemic continues to highlight the vulnerability of rural hospitals. “We have been very fortunate in Colorado that we haven’t had any rural hospitals close, but I think this pandemic has really heightened [that concern],” she says.
To shore up support, Mills wants to see passage of the “Save Rural Hospitals Act,” a bill that, among other things, would facilitate funding for rural hospitals and enable critical access hospitals to transition to a new type of delivery model in communities that cannot support a hospital. “It would essentially look like a 24/7 ED with a clinic attached to it so that [the community] would still have primary care and emergency care,” she explains. “Hopefully, Congress will work to make sure that [people] continue to have access to care in our rural communities.”
The COVID-19 pandemic response has pushed many rural hospitals to the brink, placing added strains on skeletal workforces that have long struggled to meet the healthcare needs of their communities. While some smaller facilities are pitching in to help larger, urban centers manage capacity, others have seen their patient volumes dwindle as fear keeps patients from accessing needed care. Most conclude the pandemic is highlighting the need for change in the way healthcare is delivered to rural communities.
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