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Rural Hospitals Face Daunting Challenges

Centers take hit from Medicare/Medicaid reimbursement cuts

Rural hospitals across the country are facing tremendous challenges, according to an article posted on the Albuquerque Business First website.

“There have not been any closings in New Mexico that I’m aware of, but around 45 to 50 rural hospitals around the country — mostly in the Southeast — have had to close,” said Jerry Harrison, executive director of New Mexico Health Resources. “It’s a phenomenon that’s going on everywhere because of a variety of reasons — mostly financial.”

Harrison cited reduced Medicare and Medicaid reimbursements as two factors that hit rural hospitals hard during the past year. Like those in other states, rural hospitals in New Mexico are struggling to implement requirements of the Patient Protection and Affordable Care Act, to retain their workforces, and to stay afloat financially, he said.

While Medicaid expansion has benefited some hospitals with higher patient volumes, that’s not the case for rural facilities, according to Jeff Dye, president and CEO of the New Mexico Hospital Association.

“Certainly the Medicaid expansion has helped all hospitals in the state, but it’s helped rural hospitals less. There’s less of a proportion of volume in rural communities. They are more financially strapped than bigger hospitals, and their funding also goes into workforce,” he noted.

Tackling the issue, however, isn’t as simple as creative budgeting. Dye said that many rural hospitals are considering alternative financial and licensing models that diverge from the traditional fee-for-service model that’s currently in place.

“There are a lot of models out there in the country. It’ll take a lot of concerted efforts to change things, but we’ve framed the discussions around preserving rural access and determining what a hospital will look like down the road,” he said.

Short of shutting down, many rural hospitals have approached the issue through partnerships with bigger health care providers, accountable care organizations, and public funding initiatives.

Source: Albuquerque Business First; June 11, 2015.

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