Sometimes you must think and act differently in order to change.
Rural Hospitals – besieged by direct and indirect federal funding cuts – are struggling to survive. Some will shut their doors. An outcry of protest has been sounded. But words alone won’t create change. Nor will pointing partisan fingers. Or stall tactics that pin hopes on the next election cycle. None can restore the Trump Administration funding cuts, and the recently announced discretionary fund are but a Band-Aid on a gaping wound. But a new way of thinking –and local action — might transform our hospitals into powerful pillars of prosperity. It’s time to unlock the economic and educational infrastructure that is dormant within our rural hospitals.
A key part of this reimagining should focus on changing certain federal and state definitions, because those definitions and its accompanying rules and regulations, determine what hospitals can and cannot do to receive federal funding. Internal Revenue Services guidelines require nonprofit hospitals to meet ‘community benefit standards’ that are too narrow, and limit revenue from ‘nonexempt’ purposes which are too wide.
Minnesota has an exhaustive list of square footage requirements for hospital rooms of all types, even down to laundry chutes. It was mostly last updated 25 years ago.
If we redefine outdated rules and then begin to implement tactics that expand the scope, we can make our hospitals even more essential and improve their economic viability so they can prosper even in times of reduced funding. Economic development funds might become available from state and local governments. But if not, local entrepreneurs will step in, because the business model can yield an enviable return on investment, and support a way of life cherished by many.
Here are a few ways a rural hospital could grow its revenue:
Fitness and Health Clubs. In many areas a hospital would not be competing against its community. Certified hospital fitness gurus could improve our physical fitness and perhaps offer lower costs for those who regularly engage in wellness activities.
Child Care Centers. There is an acute shortage of rural day care – both for infants and toddlers – and a growing need for after-school care and recreation.
Hospital Banks & Credit Unions. There are several healthcare credit unions, but why not unleash the full banking potential of a hospital, complete with requirements that they offer low interest loans for medical debt repayment plans.
Nutrition and food stores are a natural, where residents can buy locally harvested vegetables, produce and dairy products. With shelves for nutrition supplements, and space for blood pressure and heart monitoring tests. The adjacent pharmacy could provide discounts as ‘loss leaders’ to encourage citizens to visit the nutrition hub.
Community Recreation Centers. Cafeterias could be converted to local food halls. And while we are doing this, add a few bowling lanes, or ping pong tables and pickleball courts. Organized physical activity can generate revenue and improve long-term health. Healthcare trivia quizzes and events would be fun competitions, and evidence shows that improved education about health, leads to less expensive interventions.
Parking Lots. All that access to asphalt could be re-purposed as charging stations for electric vehicles, powered by the solar panels newly installed on rooftops. And maybe a car wash with detailing by local youth.
While we are at it, let’s also take steps to improve our rural transportation system. Yes, bike paths that accommodate e-bikes is an emerging way to replace short-distance commutes. But why not add a transit lane for buses-only on key roads to be used to transport patients more effectively? And, instead of having each local hospital compete against each other, let’s provide incentives to bring the specialist to the people, and not the other way around.
States could be a pioneer for speedy, people-moving drones for improved rural healthcare. Crazy? Well, they are experimenting in China with two-passenger air medical transports that currently have a maximum speed of 81 mph and a range of 35 miles. Add a fleet of driverless buses to pick up passengers and deliver them back home for routine services. Could insuretech startups create safer, more efficient drones or medical transports? I wouldn’t bet against them.
I grew up near Fergus Falls, Minn. As a kid, I helped my immigrant grandparents who were janitors at the hospital. My mother was given exceptional care there for decades … right until the end. Later, I was on the board of directors of the hospital system at Lake Region Healthcare, which has been a beacon of innovation. It is not the quality of care, or the leadership that is the problem. It’s the regulatory constraints that no longer fit the present moment.
New thinking should also shape public policy. For example, we fund fire departments not by charging the people who had the misfortune of having lightning strike their homes. We fund fire stations for being in place to help prevent and contain fires. And yet we fund hospitals – fueled by our third-party insurance reimbursement system – only when they are used. Hospital emergency rooms have a fixed cost by being staffed and equipped, but are paid by insurance companies, or companies that self-fund health care costs, only per incident.
Instead of being narrowly defined as “the ER + inpatient beds,” rural hospitals can transform into multi-utility health and community hubs—an economic anchor, with a mix of urgent care, prevention, social services, telehealth, marketplace and technology gateways.
Far-fetched? Maybe. Far reaching? Possibly. A Minnesota native once said it best, ‘… those not busy being born are busy dying… for the times they are a changing.’
Editor’s note: Jeff Smedsrud is a healthcare reform activist and CEO of Communicating for America; a Fergus Falls, Minnesota-based national advocacy and healthcare think tank group.
P.S. On September 15, the Trump Administration announced rules for its $50B discretionary rural health fund. The catch 22 for rural hospitals is this: They are restricted by existing rules that limit what they can do to re-invent themselves as health and wellness centers in their communities. A hospital can’t be a Bank. There are limits on what it can do to finance medical debt, and tax implications. If a hospital earns too much revenue as a community child care resource, or organic food hub, or other community-first initiatives, it likely loses its non profit status.
These old definitions and barriers stymie new thinking. And then along comes massive amounts of discretionary dollars, but those requirements are largely at the whims of CMS, which can use ‘any factors that (it) determines appropriate’. And CMS is not required to post information about where the money went.
Half the funds go to states, and CMS selects at its discretion which states get the money. The other half is totally at the discretion of Dr. Oz. The funds are not limited to rural hospitals — suburban, urban, regional chains — all are eligible.