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The Health 202: Congress is throwing a lifeline to struggling rural hospitals

The Washington Post logo The Washington Post 6/29/2021 Alexandra Ellerbeck

with Paige Winfield Cunningham

The slow-rolling funding crisis facing rural health care has unfolded over decades, leaving in its wake shuttered hospitals and communities without care.

But rural hospitals may soon be able to shed their expensive inpatient beds without losing hospital status, allowing them to cut costs by focusing only on emergency and outpatient care.

That’s under a measure Congress passed last year, which creates a new Medicare payment model for rural emergency hospitals. Lawmakers are urging the Biden administration to prioritize its implementation, while hospitals anxiously await new details to determine whether it will help their bottom lines.

The first round of Pfizer vaccines arrives at the MidMichigan Medical Center, the only hospital within a two-hour drive of Alpena, Mich., in Dec. 2020. (Elaine Cromie/For The Washington Post) © Elaine Cromie/For The Washington Post The first round of Pfizer vaccines arrives at the MidMichigan Medical Center, the only hospital within a two-hour drive of Alpena, Mich., in Dec. 2020. (Elaine Cromie/For The Washington Post)

The measure is aimed at keeping hospitals open.

More than 130 rural hospitals have closed in the U.S. since 2010. Those closures have devastated local communities, resulting in long drives for emergency care, worse health outcomes for residents and job losses for the surrounding area. An influx of federal aid to rural hospitals during the pandemic has not been enough to halt the trend. Last year was a record year for closures, even as rural communities relied on their hospitals more than ever for Covid-19 care and vaccination outreach.

Many of the remaining hospitals have seen their patient volumes plummet as rural towns dwindle, and some patients opt to go to bigger, more urban facilities for elective procedures like hip or knee replacements. But Medicare has traditionally required hospitals to maintain inpatient beds if they want to keep their hospital status — and the reimbursement that goes along with that.

Enter the rural emergency hospital: The new model, which will go into effect in 2023, is aimed at maintaining at least some access to care, especially in places where the local hospital might otherwise close. It will allow existing small rural hospitals and critical access hospitals to forgo inpatient care and convert into a new type of stand-alone emergency room and outpatient service center that can quickly transfer patients, if needed, to the closest trauma centers.

Sen. Charles E. Grassley (R-Iowa), who introduced the measure, said it will help hospitals in his home state “right-size” their operations.

“Health providers in rural America face unique challenges in delivering care to their patients, and requirements for hospital operations ought to reflect that. The new Rural Emergency Hospital designation empowers hospitals in rural communities to focus limited resources on critical services, such as emergency and outpatient care,” Grassley said. 

Grassley and Sen. Amy Klobuchar (D-Minn.) sent a letter to the Centers for Medicaid & Medicare Services earlier this month urging the agency to prioritize rulemaking around the new hospital type.

a sign on the side of a building: The hallway leading to the dormant surgery wing of the Fairfax Community Hospital in Fairfax, Oklahoma, April 2019. (Michael S. Williamson/The Washington Post) © Michael S. Williamson/Michael S. Williamson/The Washington Post The hallway leading to the dormant surgery wing of the Fairfax Community Hospital in Fairfax, Oklahoma, April 2019. (Michael S. Williamson/The Washington Post)

Supporters say the new model is more in line with the way rural hospitals operate.

The median rural hospital gets some 80 percent of its patient revenue from outpatient procedures. Procedures that once required staying overnight at the hospital can now be done as quick outpatient appointments. 

“If you think about something as simple as a cataract surgery, we used to have a surgery to replace a cataract lens that took a couple of hours and would oftentimes cause you to spend the night in the hospital for a couple of days. Today that’s a 10-minute outpatient procedure,” said Jennifer Findley, who leads education and special projects at the Kansas Hospitals Association. 

George Pink, an expert in rural health at the University of North Carolina at Chapel Hill, says the new model could help hospitals double-down on the most urgent needs of rural communities without having the additional expenses of maintaining rarely used hospital beds.

“When I travel around the country, one of the most common complaints is the lack of an alternative to an inpatient facility. There are clinics and Federally Qualified Health Centers that provide primary care only, and then there are hospitals with inpatient beds and emergency departments — there’s nothing in between,” Pink said. 

Chuck Grassley wearing a suit and tie: Sen. Charles Grassley (R-Iowa) sponsored the measure to create a new category of rural hospital. (Susan Walsh/AP) © Susan Walsh/AP Sen. Charles Grassley (R-Iowa) sponsored the measure to create a new category of rural hospital. (Susan Walsh/AP)

Still, it’s unlikely to be a sea change, at least right away.

Pink and other researchers at UNC have been working on a research project to determine how many hospitals might convert to the new model. Their finding: about 68.

The results, which will be released in an upcoming research paper, are based on the assumption that the most likely candidates for conversion will be small, financially distressed hospitals with an average inpatient daily census of less than three patients a day. Pink stresses that this assumption could change.

Some hospitals are wary.

Some hospitals have doubts about whether the Medicare reimbursement formula outlined for the new hospital type will be generous enough to make it worth giving up inpatient care. And while inpatient care can be costly, so is the capital investment needed to convert to a stand-alone emergency room. 

Kristopher Mathews, the chief operating officer of Decatur Health, a small hospital in Oberlin, Kan., near the Kansas-Nebraska border, said that his hospital is open to change. Hospital leaders even participated in an event last year to discuss potential new hospital models with community members.

But he is doubtful the new rural emergency hospital category will work for Decatur Health. He doesn’t think they’d save that much by getting rid of inpatient care, and he doesn’t think the reimbursement would be enough to make the change worthwhile.

“Our nursing staff would still need the skill set to take care of those patients. We’d still need medical staff, registration staff, billing staff to maintain ER outpatient,” he said. 

Some supporters of the new measure say it's not surprising initial uptake may be slow.

Brock Slabach, of the National Rural Health Association, said that rural emergency hospitals may come to play a bigger role over the long-term. The last time Congress created a new category for rural health care, with critical access hospitals in 1997, few hospitals adopted the new designation right off the bat. Now, there are 1,300.

“Keep in mind this is going into the future,” Slabach said. 

Ahh, oof and ouch

AHH: Mixing and matching vaccine doses could provide effective protection against the coronavirus.

Volunteers in a clinical trial who received a dose of the AstraZeneca vaccine followed by a dose of Pfizer-BioNTech reached antibody levels at about the level of people who received two doses of the Pfizer vaccine. And mixing vaccines produced higher levels of immune cells primed to attack the virus, the New York Times’s Apoorva Mandavilli, Carl Zimmer and Rebecca Robbins report.

It wasn’t the only good news to come out of scientific studies released on Monday. Another study found that mRNA vaccines from Pfizer and Moderna set off immune reactions that could protect people against the coronavirus for years.


And while the immunocompromised and elderly may still need vaccine booster shots, a third study found that a booster dose of AstraZeneca generated a strong immune response.

“Scientists had worried that the immunity conferred by vaccines might quickly wane or that they might somehow be outrun by a rapidly evolving virus," Apoorva, Carl and Rebecca write. "Together, the findings renew optimism that the tools needed to end the pandemic are already at hand, despite the rise of contagious new variants now setting off surges around the globe.”

OOF: North Carolina has become the first state to settle with e-cigarette maker Juul.

The company has agreed to pay the state $40 million to settle allegations that the company aggressively marketed its products to young people, leading to addiction to its high-nicotine vapes, The Washington Post’s Laurie McGinley reports.

The settlement is over allegations that Juul aggressively targeted youth through social media advertisements and other outlets. Another 13 states and Washington, D.C., also have sued the e-cigarette company.

“For years, JUUL targeted young people, including teens, with its highly addictive e-cigarette,” North Carolina Attorney General Josh Stein (D) said in a statement. “It lit the spark and fanned the flames of a vaping epidemic among our children — one that you can see in any high school in North Carolina.”

calendar: Juul brand vape cartridges at a shop in Atlanta. (Elijah Nouvelage/Reuters) © Elijah Nouvelage/Reuters Juul brand vape cartridges at a shop in Atlanta. (Elijah Nouvelage/Reuters)

The consent order also imposes several marketing restrictions, including barring the company from engaging in most social media advertising, having outdoor advertising near schools, and sponsoring sporting events and concerts,” Laurie writes. “Juul has been voluntarily adhering to many of those restrictions, but the consent order gives them the force of law in North Carolina.”

OUCH: A doctor’s lobby in California is beating back efforts to reform the state’s medical board.

The California Medical Association is fighting a bill that would give more power and money to the medical board charged with licensing and disciplining doctors, Samantha Young reports for Kaiser Health News.

Advocates for the bill say that reform is needed for the board to remain solvent and follow through with its responsibility of investigating complaints of fraud, gross negligence and sexual misconduct. Some accuse the board of allowing doctors to keep their licenses despite serious cases of wrongdoing.

But the doctor’s lobby has already slashed a proposed increase in licensing fees and pushed back against proposals to add non-physician members to the board.

In the courts

The Supreme Court declined to hear a legal battle over the rights of transgender students.

The move hands a victory to transgender student Gavin Grimm, who identifies as male, over the Virginia school board that didn't permit him to use the boys’ restroom, The Post’s Robert Barnes and Hannah Natanson report.

“As is its custom, the court did not say why it was rejecting the appeal of the Gloucester County school district,” Robert and Hannah write. “Justices Clarence Thomas and Samuel A. Alito Jr. said they would have accepted the case. … The court’s decision not to take up the case does not establish a national precedent, nor does it necessarily signal agreement with the lower court that sided with Grimm.”

a man wearing a suit and tie: Activist Gavin Grimm arrives for the Time 100 Gala in Manhattan in 2017. (Carlo Allegri/Reuters) © Carlo Allegri/Reuters Activist Gavin Grimm arrives for the Time 100 Gala in Manhattan in 2017. (Carlo Allegri/Reuters)

“In a 2-to-1 decision last August, a panel of the appeals court said the school board had discriminated on the basis of sex and violated the 14th Amendment by prohibiting Grimm from using the bathroom that aligned with his gender identity,” Robert and Hannah continue. “His high school offered a single-stall restroom as an alternative.”

Elsewhere in health care

Daniel Tsai will become the next Medicaid chief.

Beginning July 6, Tsai will serve as deputy administrator of the Center for Medicaid and CHIP Services, the Centers for Medicare and Medicaid Services announced. Tsai previously led Massachusetts’ Medicaid program, where he helped to restructure it to address social determinants of health and value-based care.

Four biotech companies are forming a coalition to advocate for manufacturing pharmaceutical products within the United States.

The Securing America’s Medicines and Supply coalition (SAMS) is composed of Coherus BioSciences, Teva Pharmaceutical Industries, Zymergen and iRemedy Healthcare Companies. The group aims to boost the U.S. supply chain while also fostering cooperation with U.S. allies to “near shore” pharmaceuticals and medical supplies.

“Together, we can help Congress and the Administration do the hard work to cure and secure our medical supply chain through a coordinated approach that boosts American and ally production — and rewards quality and innovation,” SAMS Executive Director David Sanders said in a statement. “A diversified and dependable supply chain needs to be expanded and right-sized for U.S. patients.”

The Bipartisan Policy Center is recommending a new, federal board on pandemic preparedness.

Today the group will release a report on how to improve federal leadership during future pandemics. The recommendations include creating a new National Board on Pandemic Preparedness to provide oversight, developing a 21st-century, interoperable public health data and technology infrastructure that includes supporting a vaccine credential system and ensuring the United States invests more and consistent public health funding of at least $7.6 billion annually at the federal, state, and local level.

Sugar rush


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