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Statewide hospital meeting unveils IHA Rural Reform proposal

The Iowa Hospital Association announced a proposal for the reform of rural health care at its Statewide District Meeting Sept. 17. The meeting was attended by more than 100 hospital leaders at the IHA Conference Center in Des Moines.

The IHA Rural Reform Proposal was developed by IHA and member hospitals and health systems to ensure the continued viability of rural hospitals in Iowa. Marty Guthmiller, CEO of Orange City Area Health System and IHA Board Chair, explained the proposal to meeting attendees.

“Rural health care in our nation is in peril, and the situation is getting worse,” Guthmiller said. “In 2004, there were 43 hospitals in Iowa with negative margins. In 2018, that number had grown to 60 — slightly more than half of all Iowa hospitals. During that same time, 26 Iowa hospitals stopped delivering babies — a 42 percent decline. The stories are similar in many states.”

Guthmiller said that, at the direction of the IHA board of trustees last December, the Rural Health Care Innovation Task Force and Iowa’s health systems began developing a unified proposal. Supported by Sen. Chuck Grassley and Iowa’s congressional delegation, the three-pronged approach proposes:

• Creating the Rural Emergency Hospital (REH) designation to allow hospitals to preserve access to essential services while no longer providing inpatient care.
• Modifying the Critical Access Hospital (CAH) program to provide a window for hospitals to apply for CAH status and offer increased reimbursement for home health care and emergency medical services. The CAH program was established in 1997 to preserve small hospital services to rural residents who would otherwise be a long distance from emergency care.

• Providing infrastructure funding to allow rural hospitals to right-size to smaller or more efficient facilities.

“This rural reform proposal would particularly benefit MercyOne Newton Medical Center by allowing us the ability to apply for CAH status,” said Chad Kelley, Ancillary Services Director at MercyOne Newton. “This reform would have a significant positive impact on our operating margin by improving our inpatient reimbursement and allowing access to programs such as the 340B Drug Discount Program. Ultimately, it helps improve the viability of our hospital in our rural community during this time of ever-evolving health care models and changing reimbursement models.”

Like other states, Iowa hospitals provide far-reaching community and economic impact. Last year, Iowa hospitals employed more than 70,000 people and created nearly $8 billion in economic impact. Yet, several rural communities have critically low supplies of providers, particularly in specialties like psychiatry and obstetrics and gynecology.

“Rural hospitals face low patient volumes, treat an older patient population and have a payer mix that tips more heavily toward Medicare and Medicaid,” said Kirk Norris, IHA president and CEO. “Cutbacks to the Affordable Care Act and changes to state Medicaid programs have only exacerbated their financial situations.”

Earlier this month, representatives from IHA traveled to Washington, D.C., and discussed the Rural Reform Proposal with the Senate Finance Committee and Iowa’s congressional delegation. IHA’s leadership and advocacy team will continue to work with committee and delegation staff with the objective of having the proposal enacted as Federal law by the end of the year.

“The goal of this proposal is to save access to essential services,” Guthmiller added. “The definition of ‘essential’ needs to be at the community level, and there’s opportunity in this proposal to do that.”

The Iowa Hospital Association is a voluntary membership organization representing hospital and health system interests to business, government and consumer audiences. All of Iowa’s 118 community hospitals are IHA members.

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