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Despite annual state funding allocations spread over a decade, the total $50 billion for Rural Health Transformation Program funding may prove insufficient to meet its professed goals.
And future limitations on federal incentives should be expected, even as states and their rural health systems are to invest heavily in compliance, managing Medicaid work requirements and making necessary system upgrades, says Valerie Rogers, senior government relations director at HIMSS (parent company of Healthcare IT News).
"This scenario could exacerbate disparities among states, specifically rural hospitals, potentially forcing resource-limited areas to develop innovative solutions to overcome these financial challenges," she said.
Although the RHTP offers crucial but limited funding, states like Texas and Michigan are already undertaking complementary workforce and stabilization initiatives and looking to virtual care and artificial intelligence technologies to expand their rural healthcare system capacities.
Meanwhile, many states reportedly have been working on their applications despite limited access to agency expertise during the government shutdown that began on Oct. 1.
Sharing crucial resources
But reducing labor costs, increasing patient access and sustaining care in rural regions depend on aligning state strategies with the Centers for Medicare & Medicaid Services' program priorities – despite financial caps on tech expenditures, such as licensing and compliance costs for certified health IT systems, said Rogers.
"Alignment with [CMS] priorities is explicitly factored into scoring and influences workload funding," she said.
At the RHTP application prep summit offered by the Health Policy Futures Lab on Sept. 30, Cecile Erwin Young, the executive commissioner of the Texas Health and Human Services, said her agency addresses rural hospital stabilization in partnership with its Rural Hospital Finance division.
Together, the two offices have also been working on initiatives like the Pediatric Tele-Connectivity Resource Program for Rural Texas to support healthcare workforces and increase patient access.
According to the division's website, Texas earlier this year offered grant funding through the Rural Health Stabilization and Innovation Act to rural hospitals and health clinics located in a county that does not contain a general hospital or special hospital to connect with, or to obtain consultations from, pediatric specialists through telemedicine services.
Michigan has also invested in healthcare workforces over the last 15 years through student loan repayment programs and training opportunities, including in rural areas, according to Elizabeth Hertel, the director of the state's Department of Health and Human Services.
In a workforce panel session with Young and others, Hertel said tribal partners in Michigan's rural Upper Peninsula regions have healthcare infrastructure and offer potential partnership opportunities to work together to leverage resources for their state's RHTP application.
While territories are not eligible for the RHTP, CMS is promoting the sharing of resources across healthcare organizations.
Rogers said such holistic approaches are critical because states may need to fund capital costs for rural hospitals that are unable to finance required system upgrades independently.
"Cost-shifting may also occur due to limitations on CMS’ ability to incentivize initiatives that don't directly benefit Medicare and, to a lesser extent, Medicaid," she said. "This scenario could exacerbate disparities among states, specifically rural hospitals, potentially forcing resource-limited areas to develop innovative solutions to overcome these financial challenges."
In addition to reimbursement changes, technology fees are likely to increase.
"Hospitals will likely face increased fees from [electronic health record] vendors to implement necessary upgrades, and even hospitals with traditional access to bond financing may encounter higher interest rates due to increased competition for capital investments," said Rogers.
Still, she explained, "states participating in the [RHTP] can significantly enhance their initiatives and realize cost savings while improving value-based care by aligning tech innovation/digital health strategies across the state's health enterprise, including Medicaid and public health agencies."
Sustaining rural providers
In addition to the workforce, technology was the most popular topic at the Health Policy Futures Lab's summit on Sept. 30, said Krista Drobac, HPFL's cofounder.
At the prep summit, the lab also hosted roundtables following morning panel sessions and a keynote address by Abe Sutton, CMS deputy administrator and director.
"Two of the most visited tables were using pharmacists as workforce extenders in rural areas, and using EMS for more than just patient transport," Drobac said.
Participants discussed technology opportunities, such as how to use remote monitoring or remote primary care/specialty care and artificial intelligence to help expand rural healthcare capacity.
"Interconnectedness and interoperability were underlying issues discussed in relation to all of the topics," said Drobac.
Technological innovation is essential to address labor costs, according to Sutton.
"One of the reasons why healthcare has risen as a cost category compared to other things that crowd up in people's pocketbooks is that healthcare is a very labor-intensive field," he said. "If you have expensive people who take training, whether it's a nurse practitioner, a doctor, you open up transformative opportunities for patients to access services that otherwise they'd have to be on waitlists to get because suddenly there's more people who can give those services.
"If we ship more of healthcare to be delivered by things that could be capitalized, instead of the pure labor component, we will allow healthcare to fall as a percentage of spend in state budgets, in families' budgeting," Sutton added.
"Technology represents a different approach to this, and the capabilities that we see from tech today to be a point of access for patients are really promising."
But there are financial caps and limitations on "specific technology-related expenditures and overall funding distribution," as Rogers pointed out.
"I don't think the [RHTP] is the answer on its own to all problems," Sutton told the state healthcare leaders. "But I think it is the platform around which you can shape and select those answers."
This has been the second article in a two-part series on the Rural Health Transformation Program. The first installment explored how limited access to CMS expertise during the government shutdown that began on Oct. 1 may have affected applications and the timeline for initial funding decisions.
Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.
