MHA CEO Report — The Challenges for Rural Hospitals

MHA Rounds Report - Brian Peters, MHA CEO

“The country is lyric, the town dramatic. When mingled, they make the perfect musical drama” Henry Wadsworth Longfellow

MHA Rounds Report - Brian Peters, MHA CEOHaving just returned from the annual American Hospital Association (AHA) Rural Health Care Leadership Conference, where I was joined by a strong contingent of MHA members and staff, the future of our rural hospitals has been top of mind.

When I was in graduate school at the University of Michigan many years ago, I recall clearly our discussions related to rural health. In short, we were taught that rural America was statistically older, poorer and sicker than the rest of the country – and this demographic and socioeconomic reality led to all kinds of challenges for those responsible for the health of rural populations and the viability of rural hospitals.

Fast forward to the most recent (2020) census and this dynamic remains true. In addition, we discovered that between 2010 and 2020, rural America actually lost population for the first time in history. Here in Michigan, the latest projections indicate that while the total state population will grow moderately over the next 20 years, the population in rural Michigan will remain flat or even decrease.

The operating environment has never been more difficult for healthcare organizations, for reasons we have documented at length in prior CEO Reports. This statement is particularly true for rural hospitals – 100 of which from across the country have actually closed since 2005. Many more have had to make the difficult decision to terminate service lines or otherwise scale back their operations to keep their doors open. What is driving these challenges?  A few items come immediately to mind:

  • An older and poorer population translates into a higher percentage of government payors (Medicare and Medicaid), which traditionally do not fully cover the true cost of care.
  • The traditional volume-based reimbursement model that has been one of the cornerstones of American healthcare does not serve rural providers – which often lack sufficient volume – particularly well. The pitfalls of the volume-based model were on full display during the worst days of the COVID-19 pandemic, particularly when non-emergent procedures were suspended.
  • Recruiting physicians today most often involves recruiting a spouse as well; in other words, there must be a good job match for both parties to spur a relocation. Physician recruitment is more difficult in rural communities for the simple fact that there are fewer potential jobs for that spouse. In addition, the on-call coverage demands can be particularly significant in rural areas, because the number of available rotating on-call clinicians is simply fewer. I would be remiss if I didn’t mention the Merritt Hawkins firm, which is one of our original MHA Service Corporation Endorsed Business Partners, and is dedicated to working with our members to create solutions to some of the most vexing challenges of the day.
  • Lastly, it is no secret the country is in the middle of a behavioral health crisis, with a lack of available placements leading to behavioral health patients boarding in emergency departments throughout the state, awaiting placement in a more appropriate setting. Hospitals are experiencing higher costs caring for these patients, increasing security to protect other patients and staff, while receiving little to no reimbursement since these patients have yet to be admitted to an inpatient psychiatric unit. This lack of access is even worse in rural areas. For example, the Upper Peninsula only has one licensed child psychiatrist for the entire region.

The reality is that when we think about rural Michigan and the more densely populated areas of the state, we are all inextricably linked. There is no “us and them.” People from the big city travel every day to rural communities for conferences and events, meetings, sales calls, deliveries, vacations and visits with friends and family (and people from rural communities come to the big city for the same reasons). While we want to ensure the vibrancy of a hospital in a rural community so that the residents have access to quality healthcare, we should all want the same thing, because we never know when we might be on one of those sales calls or vacations and need that same access. This is not just theoretical, as I have countless stories about this phenomenon playing out in real life, and I suspect you do as well.

Moreover, hospitals are one of the largest – if not the largest – employers in many rural Michigan communities, playing a crucial role in the economic vibrancy of the state. Healthcare careers provide stable, good paying jobs and positively impact lives every day. Not only are hospitals important for access to care, but also as economic drivers. 121,000 total workers are associated with the healthcare sector in rural Michigan, including 81,000 direct jobs. These direct healthcare workers received $7.6 billion in total wages, salaries and benefits and contributed $1.4 billion in local, state and federal taxes. In addition, the existence of a hospital nearby is one very important item for businesses of all kinds when considering investment in a new factory, office or headquarters.

So, the vibrancy of our rural hospitals should be a priority. What is the MHA doing about it? As it turns out, we have done a lot. Beyond our advocacy on the traditional Medicaid and Medicare budgets, certificate of need, medical liability, workforce funding and many, many other public policy issues that affect all our members, here are just a few of our rural advocacy highlights:

  • We fought hard to secure passage of the Healthy Michigan Plan (our Medicaid expansion program) and have advocated for full funding in every budget cycle since. For the reasons cited above, this is particularly impactful for our rural hospitals.
  • We worked to pass, implement and protect the Critical Access Hospital program, which has created an important lifeline for 37 Michigan hospitals. And the MHA was successful in changing existing statue at the end of 2022 to make adoption of the new Rural Emergency Hospital designation possible for our members.
  • We have worked very hard to protect the 340B drug pricing program, which is vital to many rural hospitals and their ability to provide access to care to all in their communities. Our work includes advocacy with both the state legislature and Congress, and even in the federal courts, where the MHA has filed amicus curiae briefs related to recent 340B cases.
  • The MHA successfully advocated for two new supplemental Medicaid payment pools that specifically benefit our rural members with implementation of the rural access pool in fiscal year (FY) 2012 and the obstetrical stabilization fund in FY 2015. Our advocacy efforts were also successful in securing Medicaid outpatient rate increases in FY 2020, the first increase in two decades, followed by an additional increase in FY 2021. These increases resulted in a 63% increase for critical access hospitals and a 21% increase for all other hospitals compared to Jan. 1, 2020, rates.
  • We successfully advocated for an extension of both the Medicare-dependent Hospital and Low-volume Adjustment programs during the 2022 Congressional lame-duck session, which provide critical support to many rural hospitals.
  • Finally, we have successfully advocated for passage and implementation of state legislation that modernizes the scope of practice for certified registered nurse anesthetists and allows flexibility for each hospital to choose the anesthesia care model that best fits its location, staffing and resources to offer safe and effective patient care.

Our advocacy is also focused on ensuring our members can tell their story and connect with lawmakers, both at the state and federal levels. The MHA hosted its first ever Rural Advocacy Day last September in Lansing to facilitate conversation between rural hospital leaders and members of the Michigan Legislature. The MHA also accompanied members in February for the National Rural Health Association’s Rural Health Policy Institute event. MHA members met with Michigan’s congressional delegation and staff during the trip to discuss rural health issues facing Michigan hospitals. And if you haven’t yet had the opportunity to listen to the Rural Health Rising podcasts, I encourage you to tune in to our friend JJ Hodshire, the CEO of Hillsdale Hospital and an MHA Board member, as he does a fantastic job shining a light on a wide range of rural health issues – with an impressive set of special guests – in real time.

Successful advocacy and storytelling require teamwork. As mentioned above, for years we have partnered closely with the AHA and the National Rural Health Association. We have also enjoyed a close partnership with the Michigan Center for Rural Health (MCRH), and I am pleased to share Hunter Nostrant, CEO of Helen Newberry Joy Hospital, is a member of both the MHA Board of Trustees as well as the MCRH Board.

The mission of the MHA is to advance the health of individuals and communities, and in that context, we have always strived to represent all our members and communities. Each hospital is vital to the health of our great state. While the path forward may be difficult, I’m encouraged by the many rural hospital leaders – some of the nicest, and most talented people that I have met – that have developed innovative and strategic ways to address these challenges and position themselves to be able to care for their communities for years to come.

As always, I welcome your thoughts.

Innovative Solutions Explored by MHA Service Corporation Board

The MHA Service Corporation (MHASC) board began its Feb. 8 meeting addressing current strategic priorities including exploring innovative solutions to support hospital financial viability, workforce restoration and wellbeing, behavioral health improvements, health equity and more. The board considered strategies to continue to diversify and increase opportunities to support members through potential products, business opportunities and Endorsed Business Partner (EBP) expertise. The board also recognized the MHA Unemployment Compensation Program for expanding its consultative approach to managing unemployment claims in Ohio, Idaho, New Mexico and more. The MHASC and MHA leadership teams will continue to evaluate the performance and availability of existing and potential endorsed services to ensure they align with the MHA strategic action plan.

MHA EBP Demand Workforce/Qodex presented to the board, outlining an innovative, on-demand mobile app that is transforming healthcare staffing by providing a simple, user-friendly platform that enables hospitals to fill open shifts quickly and efficiently. Members are invited to register for free webinars from 12 to 12:30 EST Feb. 22 and March 8 to learn more information.

In addition, the MHASC Board passed a resolution in honor of the upcoming retirement of longtime MHA Chief Operating Officer Peter Schonfeld and celebrated recent organizational changes to integrate business development and marketing support for both the MHA and MHASC, including the promotion of Ruthanne Sudderth to senior vice president and chief strategy officer. A lunch with the MHA and MHASC Board was jointly sponsored by partners from Merritt Hawkins, AMN Leadership Solutions and Demand Workforce/Qodex.

The MHASC provides critical support to the MHA and MHA members through its Data Services products, Unemployment Compensation Program and Endorsed Business Partner program to address workforce, financial and other operational needs.

Questions regarding the MHASC board should be directed to Ruthanne Sudderth at the MHA.

MHA Board of Trustees Reviews State and Federal Advocacy Options to Further Strategic Priorities

The MHA Board of Trustees began its Feb. 8 meeting with a federal advocacy briefing from federal lobbyist Carlos Jackson with Cornerstone Government Affairs. Jackson highlighted the policy and funding threats and opportunities healthcare providers face under the new divided Congress and Biden administration, including possible provider cuts to address deficit reduction, programs affected by the expiration of the federal public health emergency declaration and ongoing pharmaceutical industry challenges to 340B drug pricing policies.

The board also examined several state advocacy initiatives to further the board’s strategic priorities focusing on financial viability, workforce wellbeing and restoration and the furtherance of efforts aimed at improving health equity and behavioral healthcare. The board supported pursing additional state funding for workforce security and pediatric psychiatric care, as well as an effort to maximize federal Medicaid matching funds. The board also directed the MHA to work with the MHA Health Equity Taskforce and the MHA Safety and Quality Committee to address health disparities through the development of tools for the transparent reporting of health equity performance measures.

In addition to advocacy efforts aimed at state and federal policymakers, the board continued to support the association’s ongoing partnerships with hospitals throughout the state to “tell our story” publicly about the challenges and opportunities healthcare organizations face and how hospitals can work together to advance the health of individuals and communities.

The board also received a report from the MHA Service Corporation, which included a spotlight of Endorsed Business Partner Merritt Hawkins, as well as a discussion of staff succession in light of the upcoming retirement of longtime Chief Operating Officer Peter Schonfeld at the MHA.

The board concluded with regional hospital council reports and an update from MHA CEO Brian Peters.

For more information about actions of the MHA Board of Trustees, contact Amy Barkholz at the MHA.

MHA Workforce Webinar to Discuss Diverse Workforce Solutions

Understanding the workforce’s values, preferences, triggers and character traits is essential to developing relationships that create a healthy organization. This may sound basic, but many organizations continue to miss the mark. In a 2022 study conducted by the MHA and Escalent, the feeling of not having a voice and lack of communication by leadership is a main reason workers left healthcare. Understanding fundamental needs and creating policies that meet these needs is critical to the chaotic climate that exists now.

Human resource professionals are encouraged to join the All Too Human: Thoughts on Workforce webinar from 8:30 to 9:30 a.m. Jan. 26, 2023 for the opportunity to share ways to meet the needs of a diverse workforce. Conversations will be led by Patrick Irwin, Henry Ford Health, Marla Stuck, Oaklawn Hospital, and Deloris Hunt, Michigan Medicine.

The webinar is free of charges thanks to sponsors Merritt Hawkins and B.E. Smith. Members are asked to register by Jan. 24

Members with questions should contact Erica Leyko  at the MHA.

MHA Monday Report July 18, 2022

MHA Monday Report

Combating the Novel Coronavirus (COVID-19): Week of July 11MHA Covid-19 update


Member Feedback Requested on Rural Emergency Hospital Proposed Rule


CMS Proposes Rate Cuts in 2023 Medicare Physician Fee Schedule


Medicaid Will Allow Authorization of Return Transfers for NICU Patients


MHA Service Corporation Board Celebrates Partnerships and Successes


C.S. Mott Children’s Hospital Nurse Receives Q2 MHA Keystone Center Speak-up! Award

 


New Physician Recruiting Data and Insights Provided by Merritt Hawkins


Paul KeckleyThe Keckley Report

It’s Time for Hospitals to Implement Plan B

“This weekend, hospital leaders will gather in San Diego for the American Hospital Association’s Annual Leadership Summit. … ‘Transformation’ will be a frequent theme: most hospitals recognize their future is not a repeat of their past. … But Plan A is a short-term solution; Plan B is a decidedly different future state for hospitals.  Some will successfully pursue it; others will elect to watch and wait.”

Paul Keckley, July 11, 2022


News to Know

  • Registration will open Sept. 6 for Michigan’s 2022 Fall Immunization Conferences, which will be held on eight separate dates throughout the state between Oct. 4 and Nov. 2.
  • For the remainder of the summer, the Monday Report will be published every other week. The next editions will arrive in inboxes Aug. 1, Aug. 15 and Aug. 29.

New Physician Recruiting Data and Insights Provided by Merritt Hawkins

Merritt Hawkins

By Kurt Mosley, vice president of strategic alliances at Merritt Hawkins, an MHA Endorsed Business Partner

For the last 29 years, Merritt Hawkins, a division of AMN Healthcare, has released its annual Review of Physician and Advanced Practice Practitioner (AP) Recruiting Incentives.Merritt Hawkins

The recently released 2022 Review is based on a representative sample of over 2,600 recruiting engagements and, like previous reviews, tracks physician and AP starting salaries, signing bonuses, relocation allowances and related incentives. Over the years, the Review has provided benchmark data that many hospitals, medical groups and others use to determine if their recruiting packages offer customary and competitive incentives.

The new Review indicates that demand for physicians, and the salaries they are offered, has rebounded dramatically from COVID-19. Patient backlogs, an aging population and widespread chronic medical conditions have caused a strong surge in physician demand.

Increased from last year, the average starting salaries for orthopedic surgeons and most other specialties are shown on a downloadable infographic. The 2022 Review also shows that demand for medical specialists is rising, while demand for primary care physicians has declined. Most of Merritt Hawkins’ search engagements (64%) over the prior 12 months were for medical specialists, while only 17% were for primary care physicians. The remaining 19% were for advanced practice professionals such as nurse practitioners (NPs), physician assistants (PAs), and certified registered nurse anesthetists.

Two factors account for this shift. One is an aging population that needs more specialists to care for ailing internal organs, musculoskeletal conditions and neurological problems. The other is the growing use of NPs and PAs to provide primary care, often in “convenient care” settings such as urgent care centers, retail clinics and through telemedicine.

The Review includes a wide range of additional data and analysis. MHA members can obtain a copy of the review by contacting Merritt Hawkins Regional Vice President Ben Jones.