Rural Americans pay more for Rural Health Care because of the CMS policy of paying so-called “critical path” hospitals far more than independent physicians for the same services. And paradoxically, this policy decreases access to care for these Americans. The IGO has found out just how much this policy costs. (see Office of Inspector General Report) .
Here’s how it happens. Doctors go to small towns (less than 2500 population), or return to them, usually because they like the small town life, or they were raised there. People are different in these towns. I’ve lived in small towns and big cities, and seen patients in outreach clinics in rural Missouri and Kansas, and you have to believe me–people in these small towns are different from those who live in Urban Centers–like Los Angeles, or even the Kansas City suburbs. The rewards of living in small town America many times outweigh those in large centers.
Nevertheless, people in these small towns deserve a choice in health care, and access to the best health care they can get. Well- meaning politicians in rural states (like Kansas, Iowa, Nebraska, Oklahoma) pressure state medical schools to churn out more medical students in hopes of keeping those newly minted doctors in the state. (The woeful lack of post-graduate training slots for these young doctors will be the subject of another article.)
At the same time, those politicians support CMS policy to over-reward hospitals for the care they deliver under the mantle of “critical path” hospitals. Rarely can these hospitals serve as anything but a way station for trauma or for a serious illness that really requires hospitalization. These hospitals portray themselves as job providers for the community, though as has been shown, many times they take away jobs from the community .
If a doctor works in a small town, a hospital chain may propose to that doctor that he or she become a hospital employee, in an attempt to guarantee “feeder” status for that doctors practice. The hospital, after all, under current policy, is paid two or three times what an independent doctor is paid for the same outpatient service. If the independent doctor doesn’t “play ball,” the hospital may bring in a young employed doctor on salary to compete with that established rural doctor, thus guaranteeing that hospital chain the “downstream profits” from testing and surgery at the hospital or its hub.
The employment of a doctor by a hospital chain immediately restricts the choices that doctor can make for the good of patients, and drives up the cost of medical care. Couple that with hospital chain ownership of small hospitals by business interests like hedge funds that have nothing to do with patient welfare, and you have a situation which compromises the care of rural patients, decreases the incentive for independent doctors to go to or return to a rural environment, and drives up the cost of healthcare for rural patients, and makes them pay more for the care they get.
So current CMS policy decreases choice and increases cost of healthcare for rural Americans. And anything that increases the incentive for independent doctors to go to and remain in rural communities would be good for patients and good for healthcare costs. Pretty simple. So why doesn’t it happen? One reason may be the reason why hedge funds purchase hospital chains. Because of the vast amounts of money to be made in the ownership of hospital chains caused by the CMS policy of over-rewarding hospitals for outpatient care at the expense of independent physicians–and patients.
