Key Issues For The Future

Key Issues for the Future

The U.S. health care system is the most expensive in the world, and our costs are projected to continue to grow in the coming years. Yet, our health outcomes are worse than many other nations. Ineffective care puts our population through unnecessary treatments, leaves us in poorer health, and shortens our life expectancy. The high cost of healthcare makes everything in our economy more expensive, and reduces the resources that individual families and the nation have to invest in our collective future. The current health care system is not sustainable unless we find ways to lower the cost. Overall changes in the health care system will have a big impact on rural health.

Rural health care has changed considerably in recent decades. Most notably, many rural hospitals have decreased their inpatient beds, often in response to declining need, and expanded an array of other services such as offering “swing beds” (used for either acute or skilled nursing patients), outpatient primary care, and telehealth services. Through the Affordable Care Act, many rural communities have benefited from massive expansion of community health centers and the National Health Service Corps, which together have increased the number of rural primary care and behavioral health providers. Yet need still outstrips supply.

Telehealth applications that link patients and rural clinicians with expert advice or services not available locally have helped maintain access to care. In addition, nurse practitioners and physician assistant have helped ensure access to needed care. New provider mixes and care delivery models can be found across the rural landscape. This adoption of such innovative approaches often occurs by necessity, given more limited resources in rural areas.

But in spite of these innovations, many rural health care providers and communities are struggling. Sustaining and developing new access points for prioritized population health and health care services should be a top priority, given the high levels of need in rural communities. Compared with other regions, rural communities have higher proportions of elderly residents, higher rates of uninsured residents, greater burden of chronic diseases, and higher rates of poverty.

Rural America also needs next-generation care models that incorporate disease prevention and chronic disease management and attend to the social determinants of health, particularly food insecurity and transportation challenges, which are common in rural areas. As these efforts proceed, health care providers, payers, and policymakers and community leaders should consider the following key issues:

The fee-for-service payment model provides little incentive for improving quality and lowering costs. In fact, providers are often penalized for increased efficiency as it can often result in reduced volume and revenue. While the need for value-based reimbursement models is well established, the transition to innovative approaches (such as bundled payments and capitation) has been slow to develop.

It is important to test new payment approaches tailored to rural circumstances, such as the Pennsylvania Rural Health Model, which uses an all-payer global budget. More broadly, we need to ensure that proposed changes in payment policies are explicitly assessed for their potential impact on rural providers. For example, alternative payment models advanced by the Centers for Medicare and Medicaid Services, such as downside-risk models (in which providers refund payers if health care costs exceed a benchmark), can be particularly threatening to rural providers operating with very thin margins.

Greater support of health professions programs that field large numbers of graduates to rural areas is needed, along with support for pilots of new recruitment and retention strategies that build on what’s worked, such as tailored rural curricula and recruitment of students from rural areas. Reimbursement flexibility is likewise needed for staffing models that incorporate team members such as community health workers.

There has been continued attention to increasing the value of health care through arrangements in which health care providers and payers work together through sharing financial risk to better align incentives to provide quality care at more affordable prices. However, for providers take on risk for their patients and/or individuals they must have a sufficient number of individual to spread that risk across. This will require providers coming together in geographic areas to be better equipped to handle that risk.

In most industries, technology innovations drive greater efficiency and performance. In healthcare, however, price insensitivity drives research and investment toward costly technologies with high revenue opportunity, even if the health benefit is only marginal. We develop initiatives to drive innovation toward high value solutions, so that technology can help improve quality and lower cost.

Informed and engaged consumers make better decisions about their healthcare. In addition, health insurance plans that encourage consumers to find and select the highest value alternative will spur greater improvement among providers. Employers, state Medicaid programs and health plans are increasingly using tiered networks, high-deductible plans, and “reference pricing” as effective value-based methods. We work with key stakeholders to support these innovations and facilitate greater consumer engagement, in order to incent appropriate use of services and to avoid potentially dangerous over- and under-utilization of healthcare.

With the growing separation of outpatient services from hospitals, many businesses are aggressively expanding into traditional healthcare offerings. Giants like CVS, Walgreens, and Amazon are opening in-store clinics and forming alliances to create more convenience for their loyal customers. Their experience-centered, consistently branded, accessible approach is a serious threat to any healthcare system that keeps doing business as usual. To maintain better health, people want easy access to basic healthcare services, but increasingly they also want to maintain their health while they are still well, not only when responding to a health emergency. To incorporate wellness into their daily lives, consumers need access to on-demand information, extended hours, convenient locations, walk-in appointments, affordable services, and, more than ever, transparent pricing.