Keeping rural hospitals in the game [PODCAST]

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“Without a strong rural health care system, our nation’s ability to expand and contract with surges in demand will become very limited. When hospitals work together, they can better ensure that no community is left without a rural hospital for urgent care.”

Richard Watson is an emergency medicine physician.

He shares his story and discusses his KevinMD article, “Improving access to care in rural America: Keeping rural hospitals in the game.”

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Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Rate and review the show at KevinMD.com/rate. Subscribe at KevinMD.com/podcast. Today on the show, we have Richard Watson. He’s an emergency physician. His KevinMD article is titled “Improving access to care in rural America: Keeping rural hospitals in the game.” Richard, welcome to the show.

Richard Watson: Thanks for having me, Kevin. Really appreciate it.

Kevin Pho: So we’re going to do the article in a little bit. First off, briefly share your story and journey to where you are today.

Richard Watson: Yeah. I trained as a family physician and practiced a full complement of family medicine, C-sections, that whole gamut of taking care of people in a small rural town, but quickly transferred to emergency medicine and began working and staffing emergency rooms. I also founded an air medical transport company with an old med school mate of mine, and we moved that into six states, a fairly large operation.

In that process, we found a lot of dysfunction in the transport process: how the mode of transport was chosen, how destinations were chosen, and just the rodeo that became the medical transport industry. Out of that, we formed a company that gives technology tools to small hospitals to help make smart decisions around moving patients from one place to another.

Kevin Pho: So you’re family medicine-trained, now doing emergency medicine. Tell me a little bit about your practice.

Richard Watson: Mostly, I’ve transitioned away from pure clinical work at this time. The software company has really gone nationwide, and we’re working a lot with rural hospitals to help understand the dynamics and what that can mean to the financial stability of their institutions when they move patients back and forth. So a lot of it has to do with consulting with states, consulting with hospital associations, and with individual facilities about the appropriate use of medical transport to help patients receive the best outcome, as well as make the whole system more financially stable.

Kevin Pho: I talk to a lot of physicians who are interested in doing something similar to what you’re doing outside of clinical medicine. It could be something entrepreneurial; it could be a startup, running their own company. So when you made that transition from clinical medicine to what you’re doing now, tell me a little bit about that journey.

Richard Watson: Yeah. There’s this moment where you have a good idea and you see a hole that needs to be filled. I really believe that we got into the practice of medicine to help people. I really think that has been the mindset for almost everybody I’ve ever met in medicine. And I think out of that come some ways where we look at our lives and we say, “How do we improve what we do for the people we take care of?” So that was a decision early on, to say, “Let’s really go after that. If we think there’s a real thing here, let’s make it happen.”

And then there’s a moment in time, which can last days, weeks, months, or years, where you’re just working very hard on both fronts. You’re working hard to take care of patients, and you’re also working hard to foster and evolve the idea. At some point you realize, “My value to the system is greater than what I’m providing on my practice side,” and you begin to move away.

I mean, mine was the slow transition of moving from a very intense emergency room schedule to a half-and-half moment, and then finally realizing, “OK, it’s time to move along to the next chapter.” I think my motto right now is that it’s better to exit the stage on your own terms rather than have someone escort you from it. I think that was the key: just knowing when was a good time to say the next chapter begins.

Kevin Pho: All right, let’s talk about your KevinMD article. It’s titled “Improving access to care in rural America: Keeping rural hospitals in the game.” Now, for those who get a chance to read your article, just walk my audience through it. Share the story of why you decided to write it.

Richard Watson: I think that there were a lot of problems before COVID related to financing health care in the rural areas, and I think COVID dollars propped up a lot of those inequities that were there. Once the props were pulled out post-COVID, not only do we have those same financial issues on a rural platform as we did before, but now we’ve added increasing inflation in the medical realm, and then also the cost of personnel, just paying nurses, whether it’s agency nursing or other staff. We’re just realizing that what was a severe financial condition before is now untenable. We had so many hospitals that were in the red before COVID, and now you add these added pressures onto it, and you realize that the rural hospitals were behind the curve.

So what changes that picture in the near term? Because it is a critical thing, where a lot of these hospitals are going to make some pretty severe decisions in the next couple years, and discussing how there is the ability to recognize this sort of untapped area of improving patient care at the emergency room level, at the sending facility level. Each day, each week, each month, hospitals send patients to other facilities. Is there a percentage of those where the revenue could be recaptured, keeping the patient closer to home, helping them take care of patients locally, which is by far better quality for the patient overall? And how does that affect the system, both quality-wise and in financial sustainability? So that’s the article in a nutshell, looking at both of those sides of the equation.

Kevin Pho: So let’s go into a little more detail. You mentioned some of the financial travails of rural hospitals, so articulate some of those. What are some of the obstacles that rural hospitals face specifically?

Richard Watson: I mean, I think overall, the system was designed for an urban setting, where you’ve got a demographic of Medicare versus private insurers, and that payer base really determines your viability. When you move to the rural area, you flip those ratios. So you have a high percentage of Medicare and Medicaid, and the numbers just don’t work. And then you build in a set of quality metrics that really don’t fit the rural environment. In a larger hospital, you have whole committees, bodies of people, to deal with this. In a rural hospital, you may have one person doing six different jobs to be able to take care of that.

So the manpower issues, the patient volume issues, and the demographics of payer issues all are stacked against the rural environment and are discounted, I think, at a CMS level. They’ve tried to prop it up with geographic offsets and changing some of the reimbursement and making some allowances, but it’s really not been a real strategy for how we provide reimbursement at a rural level. It just doesn’t work.

Kevin Pho: So give us a sense of the severity. How dire is the situation when it comes to rural areas? Whenever I hear about hospitals losing money in newspapers, honestly, there’s not a lot of sympathy I read from people. There’s an impression that a lot of hospitals are flush with cash, making a lot of money from procedures, paying executives and physicians exorbitant salaries. But give us a sense of how dire the situation is in a rural setting.

Richard Watson: Yeah. In the lowest-tier hospitals, close to 40 to 50 percent of the hospitals are actually in the red in the rural area. It’s so common to have less than 20 days of cash on hand. If you had 10 days of cash on hand, that might be a great month for you. So the reality is how close these hospitals are to the edge at all times. I think the latest information was 20 of the rural hospitals are probably financially upside down, and these are communities that are critical to the health care of a large geography of the U.S.

They actually wrote a piece that was entitled “Does rural America really matter?” With health care being the heart of that: Do we really feel like health care in rural America has a purpose?

Kevin Pho: Now, do you get a sense that the payers are recognizing a problem? Do you get a sense that the payers and the government are appreciating the plight of these rural hospitals?

Richard Watson: I don’t think so. I think we’re still in the phase of putting Band-Aids on. There are two ways to look at it. If you look at the census data and you see the exodus of young people from rural America, and, they’d say, the graying of rural America, then there is a view that would say, “I don’t think rural America really makes that much of a difference for the fabric of the U.S. If people really want care, they should move closer to urban settings.” And honestly, that’s what I think, in a large respect, people are choosing.

But if we look at what the real problems with the pandemic were, and look just very superficially at the supply chain issues, you realize that the sole-source supply chain idea really caused a lot of problems. So now there’s this idea of strategically placing ventilators and PPE and all these things in reserve for that day when we really need them, and that’s important. How do we do that with people? Because when it really comes down to it, we’re human beings taking care of human beings, and we have to have a plan for creating margin in the system with respect to the workforce, and part of that is the rural environment.

If I’m in an urban environment and my census is 97, I have very little ability to absorb capacity. But if I’m in a rural environment and I’m at 45 percent, people would say, and be critical of that, that you’re not utilizing your system appropriately. But in reality, that’s our buffer for care. When we were in the critical phases of the pandemic and we needed beds, the ability to move someone back down the chain, from a high-acuity tertiary setting to a lower-acuity recovery setting, was also critical. And to be able to access that, not only logistically, from having ambulances and networks to be able to do that, but also from a reimbursement side, where people get paid to move them down the chain, not being afraid we won’t get reimbursement or we’ll lose reimbursement, that’s where we need real effort here.

Kevin Pho: What’s an example or a story where a rural hospital has actually shut down because of bankruptcy and whatnot? Can you illustrate and paint us a picture of the impact of that closure on its community?

Richard Watson: Yeah. In my home state, Kansas, we have several areas where either the hospital was run by a health care chain, or they had an independent community hospital, where they just started to see that the cost of care was continuing to rise, the number of individuals in the community was decreasing, and their patient base was going other places. And so you had this kind of moment where the community has to make a very hard decision about how they’re going to take care of their friends and neighbors: “Do we become the standalone emergency room, where everybody gets triaged and transferred, or do we try to hold on, knowing that we’re going to have to inject tax dollars in there?”

For the communities that have moved away from a facility themselves, it really cripples the community. Now, if I’m a young person trying to make a decision about “Do I want to go back and stay in my hometown, or do I want to move for quality-of-life issues?” you instantly reject that community, because you’re just realizing, “I have young kids. I have to be near somewhere that has a hospital.” So I can think of three immediate examples of hospitals that have gone that direction, and it’s a tough situation for the community after that. Health care becomes the number one employer. Health care is the reason a lot of people make fundamental decisions about a community. Take that away, and you’re really charting a course and a trajectory that really is on the decline.

Kevin Pho: So talk about some of the solutions. What ideas do you have?

Richard Watson: I think this idea of stepping up to the federal government and asking for changes in the conversion factor and sequestration alterations and all of that, those are things that have to be dealt with, don’t get me wrong, and they do have the money. I think we need to think about rural health care as more of a strategic infrastructure that has to be supported at a basic level, as critical infrastructure and critical to the security of our nation. I just think we can’t go back to where we were. So that’s one level, and we’ve had discussions with hospital associations and with state officials just about how that could work and what’s important there.

I think the day-to-day solution, and the near-term one, is that we have to bring health care back local. I think this is an idea of: Are we as physicians, are we as clinicians, providing the best-value decisions for our patient population? Not just pulling the eject button and sending them to every specialist, not just carting them to the largest facility, but can I be a good steward of the system from my local hometown hospital? I would encourage everyone to be actively involved with your local health care system, to be able to understand the dynamics of how we move patients in and out of that system.

If we can do more to support the local story, and that means case management, that means being able to monitor in real time what happens in the emergency room, then we keep the dollars local, we keep the patients local, we have a happier populace, and we actually have a more engaged community about how we take care of health care locally. And it does change the dynamic immediately. It’s not something you have to wait for an election cycle or something else to really make a difference.

Kevin Pho: So is the onus on that individual physician? Is it just that individual physician thinking twice about sending a patient to a tertiary center in a major city and trying to keep these patients local as best they can?

Richard Watson: I think that’s a great place to start. I think a lot of times, being in the emergency room, being in private practice, you felt like there was so much that was out of your control that you just felt like, “I can’t do anything about CMS. I really can’t do anything about some of these big issues,” when in reality, every day I’m making decisions that affect the patients around me and the way that the dollars work.

I think of one example where a hospital in western Kansas, when they had a stroke patient come in, would push the eject button, and they would instantly send them to Denver. The patient would go there for evaluation by a neurologist and an MRI, and that would take 24-48 hours, but then they would go into rehab care that would last 30 days in Denver, where their family had to commute 200-300 miles to be able to see them for 30 days and try to figure that out, with 80 percent of those dollars leaving the state. Whereas if they would have sent that same low-acuity stroke patient to a regional stroke center 50 miles from their home base, and then returned them to their home base for their rehab, the cost of care is cut by 70 percent, and the patient satisfaction and family satisfaction go off the chart. These are the things that truly change the nut in this whole deal. It just changes the dynamic substantially.

Kevin Pho: We’re talking to Richard Watson. He’s an emergency physician. His KevinMD article is titled “Improving access to care in rural America: Keeping rural hospitals in the game.” Richard, what are some of your take-home messages that you want to leave with the KevinMD audience?

Richard Watson: I just want to say to clinicians: You have a voice, and you have a perspective that most people would not understand, and you need to be willing to share it. At the end of the day, it’s human beings taking care of human beings. Regardless of how we want to apply technology, regardless of the demands of legislation or anything else, at the end of the day, it’s one human being caring about another human being, and that’s always going to be the case.

Kevin Pho: Richard, thank you so much for sharing your time and insight, and thanks again for being on the show.

Richard Watson: Thanks so much, Kevin.

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