Most recently, 23 critical access hospitals in North Dakota created a clinically integrated network which intends to enhance primary care, referrals and chronic care management by participating in the Medicare Shared Savings Program. The network plans to invest in telehealth, quality improvement and IT infrastructure to address health disparities in their communities. These types of investments are expensive and would be unaffordable for each provider. As a group, however, these organizations can share the cost, justify the cost and look to improve health outcomes and access to care in their rural areas.
In addition, the newly formed clinically integrated network will receive funding from North Dakota for moving toward a value-based care model, which is less expensive than financing through a bond issuance with high interest rates, or many other sources of capital.
According to The Commonwealth Fund, other examples of rural health care partnerships like this have included in 2013 nine hospitals in Northeastern Minnesota and Northwestern Wisconsin, in 2015 10 hospitals in Eastern Colorado, and in 2020 26 hospitals in Louisiana.
We expect more partnerships to form as headwinds like higher interest rates remain and health care organizations confront these challenges.
Partnerships may help address disparities in access to primary care
According to Main Street Health, 18% of residents in rural communities are 65 and older, compared to 16% and 14% for suburban and urban communities, respectively. Rural communities have 75 hospitalizations per 100,000 residents, and suburban and urban have 68 and 71 per 1,000 residents, respectively. Yet there are only 75 primary care physicians per 100,000 residents in rural communities compared with 94 and 118 per 100,000 residents in suburban and urban communities.
The result is that residents in rural areas need more medical care and have fewer primary care physicians and specialists to meet their needs. Partnerships can address this disparity, expand offerings of care for the older rural population in need of services like urgent care or other modalities, and perhaps improve the quality of lives of all rural residents.
The takeaway
While partnerships like the one recently announced in North Dakota are not new, we expect providers will explore them with renewed vigor. Affiliations and partnerships focusing on supply chain management, technology adoptions and shared staffing models could become the standard for many rural health care organizations to bring value to the communities they serve.
For more health care industry insights, check out RSM’s outlook.
