A Background Paper Prepared
for the
Medicare Rural Hospital Flexibility Grant Program,
Federal Office of Rural Health Policy
by
Anthony Wellever
Delta Rural Health Consulting & Research
February 1999
Organizing for Achievement:
Three Rural Health Network Case Studies
A primary goal of the Medicare Rural Hospital
Flexibility (MRHF) Program is to encourage the development of rural
health networks. While neither the legislation nor the rules implementing
the program require a critical access hospital (CAH) to form or
join a network, the conference report that accompanied the 1999
appropriations bill funding the MRHF Grant Program left no doubt
of legislative intent: grant funds are to be used 1) to "improve
information systems, quality assurance programs, and other activities"
through networks, and 2) to "develop integrated networks of care."
As desirable as rural health networks are under
certain circumstances, they should not be considered ends in themselves.
The goal should not be simply to form networks, but to use networks
as tools for achieving defined objectives. Rural health networks
are commonly used to reduce fragmentation of health services in
a community, improve access to health services, eliminate unnecessary
services, and support clinical and administrative services.
The MRHF Program legislation defines networks
very narrowly as simple bilateral relationships between two hospitals
that focus only on referral relationships, communications, credentialing,
and quality assurance. Networking possibilities for CAHs and CAH-eligible
hospitals are actually much richer. Insights into these networking
possibilities come from the two limited-service rural hospital programs
that preceded the MRHF Program -- the Essential Access Community
Hospital/Rural Primary Care Hospital (EACH/RPCH) Program and the
Medical Assistance Facility (MAF) Demonstration Project. Three examples
from these programs follow. A diagram of the networks for each example
follows the narrative for each case study. Summary observations
about the networks follow the three case studies.
The networks presented here are examples only
and not as models to be replicated. The unique circumstance of each
community should determine the purpose, players, and scope of any
networking arrangement.
Webster County
Memorial Hospital
Webster Springs, West Virginia
Webster Springs sits beside the Elk River in the
hills of east central West Virginia just outside of the Monongahela
National Forest. Once tourists from Washington, D.C. and Pittsburgh
traveled by rail to Webster Springs to stay at the resort by the
springs. The resort economy was bolstered by steady employment in
the thriving coal and timber industries. To support the health needs
of its residents, Webster County (population 10,729) constructed
a 95-bed hospital in 1955. Both busy and profitable, the three-story
hospital on the hill prospered for a time.
The good fortune of Webster Springs however, did
not last. A series of assaults on the local economy conspired to
increase poverty and joblessness and drive down the population as
residents left Webster County in search of work: passenger rail
service to Webster Springs stopped; the resort burned to the ground;
the coal mines reduced production; and the timber harvest became
erratic. Due in part to the lack of efficient infrastructure --
the 600 square mile county is served by only two two-lane mountain
roads -- no new industries replaced those in decline and the unemployment
rate soared to approximately 20 percent.
The Hospital
The problems of the local economy were mirrored
in the hospital. By 1992, two of the three floors were closed, a
cost-cutting measure reflecting the decline in patient census. Staff
had been cut by 35 percent. Despite these efforts to reduce costs,
the hospital had lost money for eight years in row. Were Webster
County Memorial Hospital to close, the closest available hospitals
were Summerville Memorial 40, miles to the south in Summerville,
and St. Joseph's Hospital, 54 miles to the north in Buckhannon,
both accessible only by narrow, winding, mountain roads. Weighing
its options in 1993, the Webster County Memorial Hospital Board
of Directors decided to convert to a rural primary care hospital
(RPCH). Upon conversion, the hospital agreed to limit its inpatient
bed capacity to six acute care beds.
Webster County Memorial Hospital provides diagnostic
radiology (including ultrasound and mammography), clinical laboratory,
and 24-hour emergency room services. Although it does not have an
active obstetrics service, the hospital delivers two or three babies
per year in its emergency room. The medical staff of the hospital
also performs some "scope" procedures. No mobile technologies serve
the community.
The medical staff of Webster County Memorial prior
to conversion had consisted of two primary care physicians and one
surgeon, all in private practice. The hospital also contracted with
a regional service to provide emergency room coverage. Immediately
following conversion, the medical staff consisted of two private
primary care physicians and two physicians employed by the hospital.
Today the hospital employs four physicians (two medical doctors
and two doctors of osteopathy) and three physician assistants. There
are no physicians in private practice in the county. The hospital
also sponsors specialty clinics in gastroenterology (based in Clarksburg,
81 miles away), and orthopedics (based in Elkins, 62 miles away).
Webster County Memorial would like to add cardiology and pediatrics
to its medical specialty clinic complement.
Reversing years of financial setbacks, the hospital
has posted modest profits in each of the past three years. This
improved financial picture, however, may be in some jeopardy due
to differences between RPCHs and CAHs in the method of Medicare
outpatient payment for physician services. Webster County Memorial
Hospital is investigating its various payment options for physician
services.
The hospital offers no inpatient long-term care
services. Although conversion of unused space in the hospital to
skilled nursing may have made sense, West Virginia is operating
under a moratorium on the expansion of nursing home beds. Nevertheless,
the excess space in the hospital was put to good use as hospital
leaders sought to integrate all health services in the community
at the hospital, creating a source of "one-stop shopping for health
care" in Webster County.
The Vertical, Within-Community
Network
The West Virginia EACH/RPCH Program required all
RPCHs to conduct a study of the financial feasibility of conversion
and an assessment of the needs of the community. Financed by a federal
grant, Webster County Memorial Hospital employed a consultant to
help it create a strategic plan which incorporated both studies
required by the state. Using the plan as a blueprint, hospital leaders
embarked on a process of health service integration that continues
to this day.
The first step in the process was to stabilize
the medical staff. Following the financial incentives of the EACH
program which allowed for cost-based payment for the professional
as well as the technical component of outpatient services, the hospital
hired two physicians to provide ambulatory care services using clinic
space remodeled for them in the hospital. Webster County Memorial
also successfully acquired the practices of the two private practice
physicians in the community and hired three full-time equivalent
physician assistants. The entire medical staff now provides services
from the hospital-based clinic. Clinic services are available Monday
through Friday until 9 p.m., and the medical staff rotates call
in the emergency room, eliminating the need for the contract service.
Prior to 1996, ambulance service in the county
was provided by a private, for-profit firm. In that year, Webster
County purchased the ambulance service and turned over the governance
and operation of the service to the hospital. The county continues
to provide the ambulance service with an annual subsidy of $65,000.
The hospital maintains two full-time crews to staff its two ambulance
substations. One ambulance is located in Webster Springs and the
other is in a substation in Diana, a community nine miles to the
north. Both ambulances are dispatched centrally.
Noting that no home health provider existed in
the county, the community needs assessment identified a need for
home health services. Following the plan, Webster County Memorial
Hospital obtained a Certificate of Need to operate a home health
agency housed in the hospital.
The hospital also became the "landlord" for other
health services in the community. Recognizing that proximity is
an important step in fostering greater levels of collaboration and
as a means of promoting its concept of "one-stop shopping," the
hospital, in 1993, offered the Webster County Health Department
rent-free space in the hospital. The health department is governed
by its own board and maintains a range of direct medical services
including adult and child health services, immunizations, and health
screenings. After it moved into the hospital, the health department
and the hospital began to collaborate on some activities (such as
the mobile van described below) and are alert for future collaborative
opportunities. A willingness to collaborate notwithstanding, several
barriers stand in the way of greater collaboration. The hospital
would like to subsume many of the direct care services of the health
department as a means of both reducing duplication of services within
the community and positioning the hospital for managed care (i.e.,
controlling health promotion and disease prevention programs in
the county). Unfortunately, in a time of diminishing funds, the
health department views its direct care services as a means of subsidizing
its core public health functions and, understandably, is reluctant
to give them up.
Approached in 1997 by a pharmacist to rent space
within the hospital, the hospital also became landlord to a retail
pharmacy. Operating under the name Highland Pharmacy, the pharmacy
fills prescriptions and offers a variety of over-the-counter drugs
and health care supplies as well as offering a small selection of
sundries. The pharmacy is open evening hours. Highland Pharmacy
is not the only retail pharmacy in Webster Springs. A pharmacy chain
also operates a store in the community. The administrator of the
hospital observed that prices at the chain pharmacy have dropped
since the competing pharmacy was opened in the hospital.
Two community social service agencies also make
their home in the hospital, the Family Resource Network (FRN) and
Women's Aid in Crisis. The Webster County Family Resource Network
is a loose-knit confederation of social service agencies, health
care providers, and the faith community funded by the West Virginia
Families First Project (under an agreement with the Governor's Cabinet
on Children and Families and the West Virginia Department of Health
and Human Resources). Its purpose is to serve as a clearinghouse
for families in need of services and as a catalyst for the production
of new services to the community. The administrator of Webster County
Memorial sits on the board of directors of FRN and credits FRN with
reducing duplication of services and improving communication among
health and social service providers in the county. One FRN project
was the creation of a food bank. The food bank was initially located
in and managed by the hospital. The success of the food bank necessitated
its moving out of the hospital to larger quarters.
The proximity of health care providers and social
services agencies like the health department and FRN have provided
opportunities for collaboration. Using money from a Small Cities
Block Grant, the hospital, the health department, the Senior Citizens'
Center, and Richwood Area Community Hospital (a small hospital in
the adjacent county) collaborated on the establishment of a mobile
clinic to serve isolated portions of Webster County. The mobile
clinic is staffed by a physician assistant or nurse practitioner,
a health department nurse, a social worker, and a senior citizen
liaison. The enterprise is operated by an interagency management
team. The partners have established a common clinic chart that is
used by both the mobile van and the hospital. The mobile clinic
is governed by many of the same quality assurance and operating
policies and procedures used by the hospital-based clinic.
The hospital also collaborated with the FRN and
the school district in a joint venture to create a wellness center.
Based on a desire for a "health club" identified in the community
needs assessment, the hospital began to plan for a wellness center.
The FRN and the school district were induced to participate in the
venture, in part because the wellness center could be viewed as
a place of family recreation in a community with few recreational
outlets. In addition to exercise equipment and classes, the wellness
center also provides training in CPR, nutrition, weight loss, smoking
cessation, and other health-related topics. The wellness center
is not located in the hospital.
The Horizontal, Cross-Community
Network
As an RPCH, Webster County Memorial was required
under the terms of the West Virginia EACH Program to designate an
EACH, a full-service hospital that contracts with an RPCH for patient
referral and transfer, to develop and use communication systems,
and to provide emergency and non-emergency transportation. Webster
County Memorial selected United Hospital Center in Clarksburg, West
Virginia, to be its EACH. The relationship between the hospitals
was formalized in two documents, a network affiliation agreement
and a patient transfer agreement. These agreements only hint at
the richness of the connection between the two hospitals. According
to the Webster County Memorial administrator, the EACH relationship
with United Hospital Center was "more valuable [to Webster County
Memorial] than [the enhanced] reimbursement." In the first two years
following conversion to RPCH status, Webster County Memorial had
a management contract with United. In addition to placing a qualified
administrator in Webster County Memorial, United helped recruit
new physicians for the hospital-based clinics. United provided a
variety of technical services to Webster County Memorial at no charge.
It provided advice and training in quality assurance and peer review,
patient billing, policy and procedure development, and biomedical
engineering. It made available its legal staff to help review contract
and structure issues related to the conversion. To help in the remodeling
of the facility, United taught Webster County Memorial staff how
to obtain and evaluate bids from contractors. United also made recycled
equipment available to Webster County Memorial. United is also the
retrieval site of Webster County Memorial's teleradiology service.
As important as the relationship between Webster
County Memorial and United is, it is not an exclusive relationship.
Webster County Memorial also has referral relationships with other
West Virginia hospitals. Which hospital a patient is referred to
depends on the condition of the patient and, increasingly, the dictates
of the patient's health care plan.
Other Networks
United and West Virginia University Hospitals
have recently joined to form Health Partners, Inc., a managed care
and direct care contracting entity composed of hospitals and their
medical staffs. Through its link to United, Webster County Memorial
and its employed physicians and mid-level practitioners are members
of Health Partners, Inc. Health Partners, Inc., is in the process
of developing a credentialing program to be used by all participating
medical providers. Linking itself to a major player in the West
Virginia provider market is strategically advantageous for Webster
County Memorial. Health Partners, Inc., has not only the expertise
to negotiate acceptable managed care contracts for its members,
it has the clout to bring managed care companies to the table. Webster
County Memorial's participation in Health Partners, Inc., is not
purely an academic positioning exercise, because West Virginia is
moving quickly into managed care. For example, the Public Employees
Insurance Association (PEIA) in West Virginia provides health insurance
coverage to all state employees, county employees, and school district
employees. These three public entities are major sources of
employment in rural areas, especially in areas
where unemployment is high. PEIA is attempting to move to managed
care throughout the state in the near future. Webster County Memorial
will be able to contract with PEIA on the same basis as its much
larger partners in Health Partners, Inc.
Conclusion
Webster County Memorial Hospital has, over the
past five years, made steady progress toward its goal of creating
"one-stop shopping" for medical services in Webster Springs. Many
of the steps in achieving the goal were outlined in the strategic
plan (community needs assessment) conducted prior to conversion
to RPCH status. Despite the importance of this blueprint, the needs
assessment merely provided hospital leaders with a detailed vision
of what an integrated health system in Webster County could be.
It was the job of hospital leaders to make the vision a reality.
In the process of making the vision real, hospital
leaders understood that it was not necessary to do everything at
once nor was it necessary for the hospital to own all services.
They added services and providers to the orbit of the hospital incrementally.
In some cases, services were added following lengthy planning; in
other cases, opportunities presented themselves to the hospital
upon which leaders quickly capitalized. Some of the services the
hospital owns and operates; some services are tied to the hospital
through contracts; and other services are merely housed in the hospital.
In every case, however, Webster County Memorial made incremental
progress toward its goal of creating an integrated delivery system.
Although community leadership is perhaps the key
determinant in the success of Webster County Memorial's networking
activities, the hospital's administrator also credits the roles
played by grants, consultants, and the state Office of Rural Health
Policy. At critical points in the development of the network, Webster
County Memorial relied on grants. It used EACH program grants to
begin the process and Small Cities Grants to purchase the mobile
clinic and install T-1 lines for telemedicine linkages with United
Hospital Center. Consultants were instrumental in the early portion
of network development. The hospital would not have sought RPCH
status if the financial feasibility study conducted by consultants
had not shown that the hospital's financial status would improve
by conversion. Through the needs assessment, the consultants provided
hospital leaders with a glimpse of their possible future. And finally,
the West Virginia Office of Rural Health Policy provided technical
assistance and support to Webster County Memorial at every stage
of development.
The Networks of Webster County Memorial
Hospital
[D]
Roosevelt Memorial Medical Center and
Nursing Home
Culbertson, Montana
Located in Culbertson, Montana, Roosevelt Memorial
Medical Center serves the approximately 1,500 residents of a 500
square mile area of northeast Montana. Twenty-three miles from the
North Dakota border, where the Yellowstone River meets the Wide
Missouri, Culbertson is 37 miles from Sidney, Montana (population
5,217), 43 miles from Williston, North Dakota (population 13,131),
and 300 miles from Billings, Montana (population 81,151), its tertiary
referral center. The closest community to Culbertson with more than
20,000 residents is Regina, Saskatchewan, 164 miles to the north.
A town of 900 residents, Culbertson is surrounded
by farms and ranches that specialize in growing wheat and sugar
beets and in raising cattle and sheep. The town is located in the
eastern portion of Roosevelt County, approximately five miles from
Big Muddy River, the eastern border of the Fort Peck Indian Reservation.
The Missouri River forms the southern border of Roosevelt County.
The county is almost 90 miles wide and the river is spanned by only
three bridges. Not only is Culbertson physically isolated, but its
isolation is exacerbated by weather. The winters in this part of
the country are long and harsh, often making travel over secondary
roads extremely hazardous.
The Hospital
Some form of institutional health care has been
provided in Culbertson since the turn of the century. In 1954, the
residents established Roosevelt Memorial Hospital. In 1977, they
built a new, combined facility which offered 14 acute care beds
and 40 long-term care beds. The hospital currently operates as Roosevelt
Memorial Medical Center (RMMC), one of three hospitals in Roosevelt
County. RMMC serves primarily the residents of a hospital district
composed of three contiguous school districts.
RMMC is a not-for-profit community hospital which
receives the proceeds of a mil levy from the district. The amount
of the mil levy is determined annually; it typically ranges between
three and six mils (at three mils, the annual proceeds would equal
approximately $70,000 in today's dollars). In 1992, following several
years of poor financial performance and difficulty recruiting and
retaining physicians, RMMC was licensed as a Medical Assistance
Facility (MAF), a form of limited-service hospital operating in
Montana as a demonstration project funded by the Health Care Financing
Administration (HCFA). Licensed as an MAF, the hospital receives
cost reimbursement for Medicare and Medicaid patients and can provide
services to inpatients and emergency room patients with mid-level
providers when physicians are not available. At the time of the
conversion, the facility altered its bed capacity slightly to its
current complement of 10 acute care beds, 6 swing beds, and 44 long-term
care beds.
At the time of conversion, RMMC decided to stop
its inpatient surgery services. The hospital had halted its obstetric
service several years earlier. In its current configuration, RMMC
provides radiology, laboratory, physical therapy, and 24-hour emergency
room service. The radiology department is linked to a hospital-based
radiology group in Glasgow, Montana, by a teleradiology system.
Radiologists from the group visit RMMC two times per week to conduct
radiological procedures and to over-read films. Mobile ultrasound
and mammography are available to RMMC on demand from the same radiology
group. A pathologist from Williston, North Dakota, provides supervision,
training, and services to the hospital and is present in Culbertson
at least one day per month. Pharmacy services are provided by a
consulting pharmacist who owns a retail pharmacy in town.
The Vertical, Within-Community Network
Vertical integration of health services in Culbertson
began before conversion to MAF status and has continued since conversion.
In 1989, Roosevelt County, which had been the only ambulance provider
in the county, decided to divest itself of its ambulance services,
and gave each of the three hospitals within its borders one of its
ambulances. Capitalizing on this opportunity to operate its own
emergency medical service, RMMC leased two additional ambulances
from the Fort Peck Tribal Health Service. Relying in part on a Rural
Health Transition Grant, RMMC built an ambulance shed in Culbertson
to house two ambulances and located the third ambulance in Froid,
Montana, 13 miles to the north, in a shed donated by the town. These
funds were also used to purchase defibrillators and improve training
for local EMS staff. A defibrillator was placed in each of the three
ambulances and two additional defibrillators were placed in decentralized
locations within the service area.
Because of its remote location, RMMC relies heavily
on air ambulance service to move critical patients to Billings.
A city-owned airport is located approximately 100 feet from the
end of hospital property. Fixed-wing air ambulances from either
Glasgow or Billings evacuate patients from Culbertson to one of
two referral hospitals in Billings, a trip of approximately one
hour duration. In comparison, ground travel to Billings from Culbertson,
in good weather, would take approximately four-and-one-half hours,
Montana's liberal speed limit notwithstanding.
With an 80/20 grant from the Department of Transportation,
RMMC purchased a 14-passenger van to provide non-emergency transportation
within the service area. The van is used to transport area residents
to doctors' appointments in Culbertson and is also used to transport
area residents the 43 miles to Williston or the 37 miles to Sidney
to see specialists.
Prior to 1990, Culbertson and the surrounding
area had obtained home health services under a unique arrangement
from a provider in Poplar, Montana, 33 miles west of Culbertson.
The Poplar provider had obtained a Certificate of Need that allowed
it to provide home health services from two locations, one in Poplar
and one in Culbertson. RMMC administered the Culbertson branch of
the service. Following several years of logistic and administrative
problems providing home health services under this arrangement,
RMMC applied for a Certificate of Need to operate its own home health
agency. The RMMC home health agency has operated successfully for
eight years, but this year it is beginning to feel the stress of
changes in Medicare payment policy.
When the hospital converted to MAF status, its
only physician was in the process of moving from the community.
(The decision to leave Culbertson was unrelated to the hospital's
decision to convert to MAF status.) RMMC purchased the practice
of the physician (accounts receivable, patient records, and office
fixtures) and formed a Medicare-certified provider-based rural health
clinic (RHC). During the six months it took to recruit another physician,
the RHC was staffed by locum tenens physicians and a single
physician assistant (PA) supported by physicians in Williston and
Sidney. Today RMMC employs one full-time, board-certified general
internist, one full-time PA, and one part-time PA. RHC services
are provided in the MAF in seven nicely appointed treatment rooms.
No other physicians or mid-level practitioners provide services
within the primary service area.
Due to the size of the county and the difficulty
of providing public health services from a single location, RMMC
contracts directly with the Montana Department of Public Health
and Human Services to provide some public health services to the
eastern part of the county. RMMC provides WIC and immunization services,
and it has a contract with the county to provide Meals-on-Wheels
to Culbertson residents.
No medical specialty clinics are offered in Culbertson.
Some satellite specialty clinics from Billings and Glasgow, Montana,
are offered in Sidney and some medical specialists practice in Williston.
Visits to specialty clinics in Sidney and Williston are arranged
for patients by the staff of the RHC. Through an arrangement with
Mercy Medical Center in Williston, RMMC is in the process of establishing
an on-site ophthalmology clinic. Rural Health Transition Grants
helped fund the planning for the ophthalmology clinic and the purchase
of equipment for the service.
The Horizontal, Cross-Community Network
Montana's administrative rules governing MAFs
require that they have transfer agreements with full-service hospitals
and that they assure that patients needing levels of service other
than those provided by the MAF (skilled nursing and home health
are cited as examples) will be appropriately referred. Services
required of MAFs but not provided by them on-site (e.g., registered
dietician services) must, by agreement, be provided by consultants
either on-site or at other locations. These written agreements,
in many cases, merely document long-standing informal cross-community
relationships that have existed for many years. By one count, RMMC
has 18 provider agreements that formally document its cross-community
structure.
Arguably the most important of these network relationships
are the ones with referral hospitals. Unlike the EACH/RPCH program
which attempted to focus referral of RPCH patients on a single larger
hospital (the EACH), the MAF demonstration project encouraged patient
transfer relationships that were more organic in nature. The referral
hospital to which an RMMC patient ultimately is transferred depends
on the diagnosis and preferences of the patient. RMMC has transfer
agreements with local full-service hospitals in Williston and Sidney,
as well as both hospitals in Billings. Mercy Medical Center in Williston
provides RMMC with certain clinical services, such as clinical dietary
consultation and biomedical engineering.
Other Networks
RMMC participates in three other networks that
are of growing importance to eastern Montana hospitals. The first
is the Montana Health Network, a horizontal network of some 20 hospitals
formed in 1987. With the exception of Deaconess Billings Clinic
(an integrated delivery system formed by the merger of Billings
Deaconess Hospital and the Billings Clinic), all of the hospitals
in the network are located in rural areas. The stated goals of the
network are 1) to improve the quality of rural health care, and
2) to improve access so that area residents do not have to travel
so far to receive needed care. The Montana Health Network offers
a variety of services and products to its members. Among the services
are employee benefits purchasing, marketing research, legal services,
repair services, and health care personnel recruiting. Member hospitals
have shared the costs of speakers and consultants and have exchanged
staff to increase knowledge and expand training opportunities. RMMC
participates in a self-insured health insurance program for employee
benefits (six participating facilities) and a joint workers' compensation
program through the network. RMMC will also purchase directors'
and officers' insurance through the network when the product, currently
in design, is made available. The administrator of RMMC serves on
the Board of Directors and the Executive Committee of the Montana
Health Network.
The second network in which RMMC participates
is the Eastern Montana Telemedicine Network. Established in 1994
with the assistance of grant funding, this network connects all
eight members in a video network. Deaconess Billings Clinic is the
hub of this system. Used primarily for educational purposes, it
is also used for consultations with specialists in Billings to confirm
diagnoses and the appropriateness of admissions to RMMC. The only
telemedicine provider in the county, RMMC has made its facilities
available to county-based mental health providers and Fort Peck
Tribal Health Service providers. The telemedicine services have
also been made available to community groups as well, such as the
school district, National Guard, local banks, and the Girl Scouts.
The third network, the Linked Provider Network,
is a managed care and direct care contracting entity composed of
hospitals and their medical staffs organized by Deaconess Billings
Clinic. The Linked Provider Network contracts with managed care
organizations on behalf of its members. Both RMMC and its employed
providers participate in the network. The network is developing
a common protocol for credentialing medical providers throughout
the network. Although managed care patients currently are not a
large segment of RMMC's patient base, participation in the Linked
Provider Network positions the hospital and its medical staff to
benefit in the future from the terms of managed care contracts negotiated
on their behalf by a powerful partner.
Conclusion
The web of formal relationships that constitute
RMMC's networks has evolved over a ten-year period. Conversion to
MAF status was not the catalyst that drove RMMC to network, but
it provided the hospital with financial stability and regulatory
flexibility which allowed the hospital to continue to develop its
integrative efforts within the community and to reach out beyond
the community.
The primary costs of network development to RMMC
have been the time it has taken to create the arrangements. Grant
funding from various sources has helped to defray the cost of some
program development. The hospital has benefitted from Rural Health
Transition Grants, Telemedicine Grants, and Department of Transportation
Grants. RMMC has made sparing use of consultants: a financial feasibility
study was conducted prior to MAF conversion; assistance was provided
in planning for and establishing the rural health clinic; and legal
assistance to create or review agreements was obtained.
Support of the Board of Directors has been key
to the development of RMMC's network development. Board members
have consistently pursued their primary goal: to keep health services
in the community. Stating their understanding that the hospital
is too small to survive as a stand-alone facility, the Board has
approved all steps necessary to assure survival. Deaconess Billings
Clinic, the major player in four of RMMC's networks, is viewed favorably
by the board members. Deaconess has been supportive and has never
attempted to take control. Based upon favorable experiences to date,
the board feels that networking is not a threat, [but] a life saver
[for the institution].
The Networks of Roosevelt Memorial
Medical Center
[D]
Kearny County Hospital
Lakin, Kansas
A community of approximately 2,300 residents on
the high plains of southwestern Kansas, Lakin is the county seat
of Kearny County and lies just north of the Arkansas River. Historically,
the economy of Kearny County was dominated by wheat and small grain
farming, but today the economy has become increasingly diverse.
In addition to crop production, the county relies on natural gas,
feed lots, packing plants, and manufacturing. The place of business
of some of these industries is Garden City (population 24,097),
located in neighboring Finney County. The proximity of Garden City
to Lakin (23 miles) assures that some residents of Lakin and greater
Kearny County seek employment in Garden City.
One hundred and fifty years ago, the Santa Fe
Trail, a commercial route linking merchants of the burgeoning United
States with newly independent Mexico, traversed Kearny County. Still
a cultural crossroads, numerous residents of Kearny County today
speak Spanish or German as their first language. Always the home
of immigrants from Mexico, Kearny County recently has experienced
an increase in immigration from Latin America, and nearby Garden
City has experienced an influx of residents from Southeast Asia
(Vietnam, Laos, and Cambodia). This recent tide of immigration has
caused health care and social service providers of the area to develop
new programs to meet the needs of culturally diverse residents of
southwestern Kansas.
The Hospital
As the name suggests, Kearny County Hospital is
owned by the county. Built in the early 1950s, the old hospital
buildings were replaced in 1978 by a new hospital built on the edge
of town. With its 26 licensed acute care beds, the hospital shared
a campus with a 40-bed county-owned nursing home, High Plains Retirement
Village. Although these two facilities remain physically separate
and maintain separate boards of directors, they currently share
administrative staff and some clinical staff.
Kearny County Hospital is a critical access hospital,
which previously had been licensed as a rural primary care hospital
(RPCH) under the Kansas Essential Access Community Hospital (EACH)
Program. It currently operates 15 acute care beds and is licensed
to operate 25 swing beds. The decision to convert from "full-service-hospital"
status to RPCH status was not made lightly. Hospital leaders harbored
considerable anxiety about participating in an evolving federal
program. In the second wave of hospitals in Kansas to convert to
RPCH status (conversion occurred in late 1996), Kearny County Hospital
became a RPCH only after evaluating the performance of other Kansas
RPCHs and undergoing a financial feasibility study, which the administrator
of the facility judges as being "critical" to the decision to convert.
Today the hospital offers radiology, laboratory,
physical therapy, and 24-hour emergency room services, in addition
to acute care and long-term care in swing-beds. The hospital is
also served by mobile technologies (ultrasound, mammography, osteoporosis
screening, and CT) from either Garden City, Wichita, or Topeka.
Dialysis services are also provided in the hospital by a service
based in Wichita.
The hospital recently reintroduced obstetrics
and limited inpatient surgery services to the hospital. An obstetrician-gynecologist
resides in Kearny County and practices part-time under an agreement
with the hospital in a clinic owned by the hospital. Gynecological
procedures (e.g., tubal ligations), minor orthopedic procedures
(performed by an orthopedic surgeon from Garden City), and "scope"
procedures are performed according to an established schedule. The
services of a certified registered nurse anesthetist who resides
in Lamar, Colorado (90 miles west), are provided under contract.
In addition to the obstetrician-gynecologist,
the active medical staff of the hospital is composed of one family
practice physician and two nurse practitioners, all of whom are
employees of the hospital and practice in the Family Health Center,
a medical clinic connected to and owned by the hospital. One additional
family practice physician is scheduled to join the medical staff
in late summer 1999: however, the clinic will lose one nurse practitioner
in March 1999. Due to its proximity to Garden City, there are few
specialty clinics offered in Lakin. A satellite orthopedics clinic
is held in Lakin, perhaps reflecting the level of competition among
orthopedists in Garden City. A podiatry clinic is also offered.
The Vertical, Within-Community Network
The adjacency of Kearny County Hospital and High
Plains Retirement Village and their common ownership by the county
made vertical integration of the two facilities highly desirable,
if not inevitable. Administration of the facilities was combined
in 1987, which reduced costs and increased coordination between
them. The nursing home has diversified its services, designating
ten units as an assisted living center. The hospital and the nursing
home have engaged an architect to design site and facility plans
to expand and link the two facilities. Linkage of the two facilities
will improve economies of operation (e.g., a single kitchen and
dining service to serve both facilities) and allow for the creation
of new or expanded services (e.g., enlarged special care services
for nursing home residents with dementia and expanded assisted living
units, including units designed for residents with dementia). The
facilities are also evaluating the merger of their governing boards.
In 1990, six years before converting to RPCH status,
Kearny County Hospital constructed the Family Health Center, a nine-treatment-room
clinic attached to the hospital. The Family Health Center was created
by the community to help improve retention of physicians, and to
reduce unnecessary duplication of laboratory and radiology services
in the community. The entire staff of the Family Health Center is
employed by the hospital. The Family Health Center provides services
Monday through Friday and is open on Saturday mornings for walk-in
patients. Two dentists (the only ones in the community) rent office
space in the Family Health Center.
Kearny County owns the ambulance service and the
county commissioners provide its governance. At the time the hospital
converted to RPCH status, county leaders evaluated the potential
benefits of merging the county EMS service with the hospital. Sensitive
to the expanded liability the hospital might face under the EACH
Program (especially in circumstance when an ambulance attendant
would chose to bypass the RPCH to take a patient directly to the
emergency room of St. Catherine Hospital in Garden City), the hospital
and the ambulance service decided to remain separate entities. This
decision, however, did not mean that the two providers could not
cooperate. Indeed the ambulance service and its four full-time employees
are housed in the hospital. The fleet of four ambulances is decentralized
with three of them located at the hospital for emergency dispatch
and patient transfers and one located in Deerfield, a small community
nine miles to the east of Lakin.
Home health services are provided to the residents
of Kearny County by a home health provider based in Garden City.
To serve patients in Kearny County, the home health provider contracts
with Kearny County Hospital for nursing staff, and the hospital
provides the home health agency with an office and storage facilities
in the hospital.
In May 1996 the only retail pharmacy in Lakin
closed its doors, and in June 1997 the long-time manager of the
hospital pharmacy retired. The hospital successfully recruited a
consulting pharmacist to provide pharmacy services to the hospital
and in late 1998 induced him and his partner to open a retail pharmacy
in the hospital. Located just inside the main entrance of the hospital,
the retail pharmacy fills prescriptions and offers a variety of
over-the-counter medicines and health products to the people of
the county. In addition to providing a service to the community
at large, the location of the pharmacy in the hospital expands the
availability of in-house pharmacy services for patients of the hospital.
The Horizontal, Cross-Community Network
As an RPCH, Kearny County Hospital was required
by the Kansas EACH Program to select an EACH. Kearny County Hospital
selected St. Catherine Hospital in Garden City. The two hospitals
formed the Southwest Kansas Rural Health Network and formalized
their relationship in a series of written agreements They negotiated
a network agreement, medical staff and communication protocols,
a memorandum of understanding concerning medical staff credentialing,
and referral and transfer protocols (which include provisions for
problem resolution and quality assurance) among others.
The administrator of the Kearny County Hospital
views telemedicine as the heart of its extra-local networks. One
of its primary telemedicine linkages is with St. Catherine Hospital
in Garden City. The emergency rooms of the two facilities are linked
by interactive video. Established in early 1997, the goal of the
Joint Telemedicine Program was to "enhance non-emergency [emergency
room] coverage for Kearny County Hospital using St. Catherine Hospital
support services." The telemedicine system employs two video cameras,
one wide-angle camera at the end of an emergency room and one track-mounted,
high-resolution camera capable of moving up and down the length
of an emergency room cart. The video equipment also connects to
otoscopes and stethoscopes for aid in long-distance diagnosis.
The system is used for non-emergency patients
who present to the emergency room between 10 p.m. and 6 a.m. when
Kearny County Hospital medical providers are on call. Protocols
for the use of the system have been agreed to by both hospitals.
Following an assessment of the patient, nursing personnel at Kearny
County Hospital contact emergency room personnel at St. Catherine
Hospital's emergency room and a telecommunications linkage is established.
The emergency room physician at St. Catherine Hospital examines
the patient via the video connection, confers with the Kearny County
Hospital nurse, diagnoses the patient, and orders a course of treatment.
All of the emergency room physicians of St. Catherine Hospital have
medical staff privileges at Kearny County Hospital.
Both hospitals contributed to the capital costs
of the system (approximately $115,000); St. Catherine Hospital contributed
approximately 70 percent of the total capital cost and Kearny County
Hospital approximately 30 percent. A portion of the funds were made
available through EACH Program grants. The annual operating costs
(approximately $20,000) of the system are shared equally. St. Catherine
Hospital also receives the teleradiology images sent by Kearny County
Hospital.
The hospital maintains a second telemedicine linkage.
This one was established in 1992, using a Rural Health Transition
Grant. Located in a non-clinical area of the hospital, it is used
primarily for nursing and medical continuing education. The system
links Lakin with University of Kansas Medical Centers in Wichita
and Kansas City, Kansas (although the system also allows any two
participants in the state-wide system to connect to each other).
Through the use of this telemedicine connection, Kearny County Hospital
and its physicians have been able to offer specialty clinics and
obtain consultation in a number of services previously unavailable
locally, including dermatology, neurology, rheumatology, child psychology,
and pediatric cardiology.
To the extent possible, Kearny County Hospital
and St. Catherine Hospital have attempted to share supervisory and
consulting positions. When supervisory positions at Kearny County
Hospital become available, the hospitals evaluate whether the vacancy
can be filled by expanding the job responsibilities of the person
in the parallel position at St. Catherine Hospital. While it has
not always been possible to share staff in this way, there have
been some successes, most notably in the dietary department.
Quality assurance representatives from the two
facilities monitor transfer-related aspects of care and meet quarterly
to review monitoring reports and recommend corrective action. The
representatives discuss ongoing quality issues related to the transfer
of patients between the facilities and share ideas and support the
overall quality assurance activities of both facilities. Recommendations
from this team of representatives are channeled through the quality
assurance systems of each facility.
Other Networks
Kearny County Hospital is a member of the Pioneer
Health Network (PHN), a horizontal network formed in 1990 of 17
hospitals that serve the approximately 150,000 residents of western
Kansas. Kearny County Hospital joined PHN in 1995. PHN members engage
in shared education projects, group purchasing (e.g., oxygen, biomedical
engineering services), joint physician recruitment, and shared strategic
planning. The network is also viewed as a forum for discussing emerging
trends and "brainstorming" about health care delivery and financing
issues. The network is exploring the possibility of offering itself
as a middle-tier contracting entity interposed between managed care
companies and member hospitals and their medical staffs. Because
a sizeable number of Kearny County residents are employed by firms
that purchase health care benefits from managed care organizations
(e.g., the natural gas producer and a regional meat packing firm),
Kearny County Hospital and the Family Health Center treat a growing
number of patients who are enrolled in PPOs and HMOs.
In April 1998, PHN obtained a one-year grant from
the Kansas Health Foundation to conduct a cultural diversity project.
Collaborating with the United Methodist American Ministries (MAM)
and Garden City Community College (GCCC), PHN agreed to "identify
barriers [to children's health care] and to act on solutions to
remove barriers to health care services." MAM, in conjunction with
the Department of Anthropology at the University of Kansas, was
charged with identifying cultural barriers to children's health
in southwest Kansas; PHN is responsible for developing action plans
for overcoming the barriers identified by MAM; and GCCC was charged
with developing cultural-sensitivity training programs for the hospital
and medical staffs of PHN-member institutions.
Kearny County Hospital also participates with
a subset of three other PHN members in a horizontal network known
as the Medical Executive Staff Committee. The member hospitals of
the committee are Kearny County Hospital, Hamilton County Hospital
(Syracuse, Kansas), Greeley County Hospital (Tribune, Kansas), and
Wichita County Hospital (Leoti, Kansas). Meeting every other month,
the medical staffs of these four hospitals engage in joint peer
review activities. (Kansas law requires hospitals with small medical
staffs to cooperate in peer review.) The stated purpose of the committee
is to comply "with risk management statutes and to evaluate and
improve the quality of health care services provided within its
member hospitals." The committee also engages in joint recruitment
efforts. The combined active medical staffs of the four member hospitals
total seven physicians and five mid-level practitioners.
Finally, Kearny County Hospital has integrated
the information technology of the hospital, the clinic, and the
nursing home using software and support services provided by Stormont-Vail
Regional Medical Center in Topeka under contract. Kearny County
Hospital would prefer to participate in a regional information network
with St. Catherine Hospital, but its relationship with Stormont-Vail
predates St. Catherine Hospital's ability to support Kearny Hospital
with information technology services. Recognizing the importance
of management information for planning, marketing, and quality management,
Kearny County Hospital (as a member of Pioneer Health Network) participates
in the Garden City Information Technology Cooperative, an organization
whose members include Garden City school districts, Garden City
Community College, Finney County government, and St. Catherine Hospital.
Members of the cooperative share a cadre of hardware and software
technicians to support information system development.
Conclusion
Kearny County Hospital itself is not greatly diversified
and yet it has become the lynchpin for a system of integrated health
services delivery in Lakin. Primary care services were integrated
with the hospital when the Family Health Center was built and the
hospital employed the medical staff. The county-owned nursing home
and ambulance service maintain separate governance structures, yet
operationally, they have been integrated into the hospital. By providing
space and staff, the hospital influences the delivery of home health
services in the county without owning them. By providing space to
the retail pharmacy in the hospital, Kearny County Hospital assures
the availability of pharmacy services not only to itself, but to
the nursing home, the primary care practice, and the entire community.
The success of Kearny County Hospital at integrating these elements
of care illustrates that it is not necessary to own all of the elements
of an integrated delivery system to offer the residents of a service
area a seamless continuum of services.
The administrator of Kearny County Hospital greatly
values the linkage with providers outside of the community made
possible by telemedicine. He believes that telemedicine can help
overcome the isolation felt by many rural physicians and nurses.
Various staff members of the hospital can site specific examples
of when telemedicine was used to make or conform a diagnosis.
Like many rural hospitals, the environment of
Kearny County Hospital is changing. Two of the major changes are
the expansion of industrial workers covered by managed care agreements
and the increased cultural diversity of the population. Unwilling
to be simply a witness to these changes, Kearny County Hospital,
through the Pioneer Health Network, is beginning to confront these
forces by the creation of a managed care contracting entity and
by programs that sharpen its understanding of the meaning and consequences
of cultural diversity and the impact of cultural diversity on health
services delivery.
The Networks of Kearny County Hospital
[D]
Observations from the Case Studies
The three cases presented here show the variety
of rural health networking possibilities. The networking activities
these three hospitals engage in run the gamut from local integration
of health services, to telemedicine, to managed care contracting,
to group purchasing. Arguably the smallest and most frail of rural
hospitals -- the very hospitals the Medicare Rural Hospital Flexibility
Program was designed to help -- they successfully use networks to
help them manage their environments.
Despite dissimilarities among the hospitals and
the communities they serve, there are many similarities in their
networking behavior. All three hospitals have greatly integrated
services within their communities, creating "one-stop shopping"
for medical services within the communities. All three employ their
medical staffs, a step the administrators view as important to future
integration activities. All three hospitals also participate in
telemedicine networks, with two of them being linked to academic
health centers. Two of the three are members of a super-PHO that
contracts on their behalf with managed care organizations, and the
third hospital participates in a network that is attempting to establish
joint managed care contracting capability. And two of the three
are linked to other small rural hospitals in a horizontal network
that predates their conversion to limited-service rural hospital
status.
Several other observations about the networking
behavior of these hospitals may be drawn:
- Networking is incremental; it proceeds
one step at a time. These hospitals built their networks over
a number of years and the networks they created still may be viewed
as works-in-progress.
- Rural health networking is opportunistic;
networks take advantage of evolving circumstances. Although planning
can play an important role in network development, it is not possible
to foresee all events. Hospital leaders who have a good sense
of the vision and mission of the hospital are able to capitalize
on events, even if it means straying somewhat from an established
plan.
- Conversion to limited-service rural hospital
status can serve as a catalyst for rethinking the mission of the
hospital and its place in the community. Each of these hospitals
expanded their networking activities during and after conversion.
- Although common ownership of services
is one method for integrating health services in a community,
it is not the only way. Hospitals may integrate health services
through a variety of mechanisms including interlocking governance,
shared administration, shared staffing, contractual relationships,
and sheer proximity.
- Leadership is important. None of the
achievements of these hospitals would have been possible without
leaders who understand the potential of networking and the goals
of the hospitals. But as critical as the quality of leadership
is, it may be less important than the stability of management
over time. The chief executive officers who lead these three hospitals
have held these positions, on average, for a decade. Through their
long tenure, they provide continuity of executive vision.
- Grant money can act as a stimulus to
networking. All of the networks used grants to finance development
activities. Some of the grants were large and some were quite
small. They came from many different sources: the EACH Program,
the Rural Health Transition Program, telemedicine grants, Department
of Transportation grants, Small Cities Block Grants, service club
grants. While the money is important to finance some activities,
the grant program itself provided an opportunity for the hospitals
to think strategically about health services in their communities
and the best way to provide them.
- Positioning for managed care is of growing
importance to rural providers. These three hospitals -- again,
the smallest and most frail of rural hospitals -- feel the emerging
presence of managed care in their market areas and have taken
steps to cope with it. They have joined with other providers to
improve their bargaining position with managed care organizations.
Resources
Case study contacts:
Steve Gavalchik, CEO
County Memorial Hospital
324 Miller Mountain Drive
Springs, WV 26288
304/847-5682
304/847-7660 (fax)
Walter Busch, Administrator
Roosevelt Memorial Medical Center
P.O. Box 419
Culbertson, MT 59218
406/787-6281
406/787-6670 (fax)
Steve Reiner, Administrator
Kearny County Hospital
P.O. Box 744
Lakin, KS 67860
316/355-7111
316/355-7141 (fax)
Other Rural Health Network Resources:
American Hospital Association, Critical Access
Hospitals, Chicago: American Hospital Association, April 1998.
(Includes five case studies from the EACH and MAF Programs.)
Bogue, R. and C. Hall (eds.), Health Network
Innovations: How 20 Communities are Improving Their Systems Through
Collaboration, Chicago: American Hospital Publishing, Inc.,
1997. (Includes nine examples of rural health networks.)
Moscovice, I., A. Wellever, J. Christianson, M.
Casey, B. Yawn, and D. Hartley, Rural Health Networks: Concepts,
Cases, and Public Policy, Minneapolis: University of Minnesota
Rural Health Research Center, April 1996. (Includes six rural health
network cases studies.)
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