CEO Report – Importance of Rural Health

MHA Rounds Report - Brian Peters, MHA CEO

“A farmer has to be an optimist, or he wouldn’t still be a farmer.” – Will Rogers

MHA CEO Brian Peters

At a time when political uncertainty at both the state and federal levels is the order of the day, I am absolutely delighted that Gov. Gretchen Whitmer and the Legislature were able to complete a state budget supplemental agreement prior to their holiday recess that directly addressed several MHA Board-identified rural health advocacy priorities. In that supplemental budget, funding was restored for the Rural Access Pool, the Obstetrical Stabilization Fund and a significant Medicaid outpatient rate increase for critical access hospitals (CAHs). These vital funding sources help to ensure the mission of our small and rural hospitals across Michigan as they provide quality care for mothers, infants and families.

Rural hospitals are an integral part of the local fabric of their communities, treating the ill and improving the health and well-being of their residents. They work extremely hard to make sure that they’re able to provide the best quality of care, while operating on a budget with slim to nonexistent margins. In a small town, there is nowhere to hide when the hospital is experiencing challenges of any kind. This is especially true when the hospital is the largest employer in the community and a vital economic engine, which is very often the case in rural Michigan.

According to the latest U.S. census, rural Americans are notably older and sicker than their urban and suburban counterparts. While rural areas currently cover 97% of the nation’s land, they are home to only 19.3% of the total population. Demographers believe that we are moving toward a future state in which an even higher concentration of the population will be located in nonrural settings – and that in the next five years, more than 40% of Michigan counties will have more than a quarter of their population older than 65, with nearly all of those counties being rural. As we have learned, traditional volume-based healthcare funding methods do not adequately address the fixed costs inherent in healthcare delivery; hence, the need for special funding pools and the evolution of new business models such as rural ACOs (accountable care organizations).

Although Medicaid expansion improved the viability of rural hospitals (a fact that is borne out when benchmarking Michigan to nonexpansion states), a new change that will be felt by many of our rural communities is the Jan. 1, 2020, implementation of Medicaid work requirements for Healthy Michigan Plan beneficiaries. Approximately 300,000 Michiganders will now be responsible for reporting 80 hours each month of work or work-related activities, such as a job search. Those who fail to report will be deemed out of compliance and will risk losing their benefits. The relative lack of job opportunities – and adequate transportation options – creates the potential for rural communities to be more adversely impacted. As a reminder, the MHA has worked effectively to greatly improve the work requirement law compared to proposals that had been adopted in other states and were gaining momentum here in Michigan. Now we encourage all our member hospitals to work closely with the MHA and other key stakeholders, such as the Michigan Department of Health and Human Services, to ensure maximum compliance.

Personally, I’m proud to collaborate and advocate with our many rural hospitals and health systems in Michigan. I witnessed how rural hospitals provide some of the highest quality care to communities across the state when I staffed the MHA Council on Small or Rural Hospitals (now staffed by Bill Jackson and chaired by Jean Anthony, CEO of Hills & Dales General Hospital) and worked directly on the development and implementation of Michigan’s CAH program. In addition, I had the privilege of serving on the board of trustees at Charlevoix Area Hospital, where I felt the symbiotic relationship between a hospital and the public. I see continued recognition and support for rural providers within our elected bodies at the state and federal levels. Finally, I also believe that our rural members have a great opportunity to be on the leading edge of healthcare delivery and financing reform that will improve care for patients and communities. In other words, there remains great cause for optimism.

On that note, at the end of next month the MHA will host our annual Breakthrough conference in Traverse City. A key focus of the conference is rural healthcare, and we will have the pleasure to hear from members of a Tennessee coalition who were charged with creating transformation plans to support rural hospitals. These speakers will share ways they are aligning resources and developing holistic solutions to rural healthcare. I hope I will see many of you there as we collaborate to provide compassionate, quality healthcare to our communities.   

As always, I welcome your thoughts.