Search

Since the inception of the Medicare Rural Hospital Flexibility Program in 1997, over 1,300 rural hospitals have converted to critical-access hospitals, which entitles them to Medicare cost-based reimbursement instead of reimbursement based on the hospital prospective payment system (PPS). Several changes to eligibility for critical-access status have recently been proposed. Most of the changes focus on mandating that hospitals be located a certain minimum distance from the nearest hospital. Our study found that critical-access hospitals located within fifteen miles of another hospital generally are larger, provide better quality, and are financially stronger compared to critical-access hospitals located farther from another hospital. Returning to the PPS would have considerable negative impacts on critical-access hospitals that are located near another hospital. We conclude that establishing a minimum-distance requirement would generate modest cost savings for Medicare but would likely be disruptive to the communities that depend on these hospitals for their health care., (Project HOPE—The People-to-People Health Foundation, Inc.)

Health information technology (IT), such as computerized physician order entry and electronic health records, has potential to improve the quality of health care. But the returns from widespread adoption of such technologies remain uncertain. We measured changes in the quality of care following adoption of electronic health records among a national sample of U.S. hospitals from 2004 to 2007. The use of computerized physician order entry and electronic health records resulted in significant improvements in two quality measures, with larger effects in academic than nonacademic hospitals. We conclude that achieving substantive benefits from national implementation of health IT may be a lengthy process. Policies to improve health IT's efficacy in nonacademic hospitals might be more beneficial than adoption subsidies.

A disproportionate share of the Medicare beneficiaries who lost coverage as a result of recent health maintenance organization (HMO) withdrawals have been from rural areas. Rural beneficiaries are less likely than urban beneficiaries are to have another Medicare+Choice (M+C) option. We surveyed a nationwide random sample of 1,093 rural beneficiaries to assess the impact of HMO withdrawals. A high proportion of beneficiaries ended up without any coverage beyond traditional Medicare; on average, beneficiaries experienced significant increases in premiums; and the proportion of beneficiaries with prescription drug coverage decreased significantly. These results raise questions about whether the federal government should encourage plans to enter rural markets where they will be the only M+C plan and where their withdrawal could have negative consequences for enrollees who lose coverage.

This paper synthesizes national data on rural HMO enrollment in commercial plans, Medicaid HMOs and prepaid plans, and Medicare risk-based plans. Although most rural counties now are included in the service area of at least one commercial HMO, rural HMO enrollment rates are still very low. The expansion of HMO capacity to serve rural enrollees, the continued implementation of Medicaid waivers, and the recent passage of the Balanced Budget Act of 1997 with substantial Medicare program revisions suggest increased rural managed care enrollment in the future.

Health care reform is likely to raise unique issues for rural communities and providers. This paper identifies and discusses several of these issues, with a particular focus on the potential relationship between health care reform and rural health networks. Topics addressed include the likely impact of health reform on the organization and development of rural health networks, the reimbursement of rural providers, rural medical practice, and state roles in the organization, delivery, and oversight of rural health care.

Rural hospitals continue to face the threat of closure. Congress passed legislation in 1989 and 1990 to offer an alternative for small rural hospitals; the legislation encourages hospitals to form networks comprising an essential access community hospital (EACH) and one or more rural primary care hospitals. This legislation is a tightly focused program that will affect no more than an estimated 150 hospitals in seven states; implementation of the program has been controversial, as this DataWatch demonstrates. The authors describe the profile of rural hospitals that are likely to apply to participate in the program, based on distances between hospitals and number of beds.