The Office
of Rural Health Policy Celebrates 20 Years:
A Look Back at the History of the Office and Its Continued Mission
to Improve Health Care in Rural America
The 1980s: Finding
Solutions for a Fractured Rural Health System
A former director once
likened the Office of Rural Health Policy to an “Office of
Unintended Consequences” and that may have been a more apt
moniker.
It was a confluence of
several factors that came together unexpectedly and illustrated
the need for a rural voice within the policymaking of the U.S. Department
of Health and Human Services (HHS). In the early 1980s, the economic
outlook for rural America was bleak. Around 650,000 American farms
were foreclosed and nearly 2,000 independent farmers quit farming
each week. For every seven farms that shut down, it is estimated
that one other rural business went under as a result. More than
500,000 low-wage manufacturing jobs were lost to foreign competition.
Rural health care providers
were not immune in this environment. Rural areas had long struggled
to attract health care providers, leading to the creation of programs
such as the Community and Migrant Health Centers, the National Health
Service Corps, and the Rural Health Clinic program. While these
programs helped, new challenges were emerging. Rural hospitals were
buffeted by an economic downturn in rural areas and declining populations.
At the same time, the health care system was changing, with rapid
growth in the cost of providing health care. Congress charged Medicare
with developing a new prospective payment system (PPS) for inpatient
services to better manage growing costs. This new administered pricing
system moved away from the customary and reasonable charge-based
system and set firm price prices for all services.
While this move helped
policymakers take an initial step toward containing costs, it also
created some stark winners and losers. The new PPS had a rural-urban
payment differential as policymakers believed it cost less to provide
care in rural areas, and rural hospitals saw a significant reduction
in their payments. In addition, the PPS put some rural hospitals
at risk financially because it paid based on a system of averages
and smaller facilities had fewer cases over which to spread those
costs. Between the inception of the new payment system in 1983 and
1987, nearly 400 rural hospitals closed and many others were at
risk of closing.
Policymakers
Pay Attention
This situation of unintended
consequences got the attention of lawmakers. In the Senate, rural
advocates led by a former North Dakota Senator formed the Senate
Rural Health Caucus, followed shortly by the creation of the House
Rural Health Care Coalition, led by the efforts of two Iowa Representatives.
These groups, made up of members who represented rural States and
districts, created a newfound voice for rural health interests within
the halls of Congress. Throughout 1986 and 1987, several Congressional
Committees held hearings on the viability of the rural health care
delivery system and in particular on the plight of small rural hospitals.
On June 4, 1987, the Select Committee on Aging and the Task Force
on the Rural Elderly held a joint hearing on “The American
Rural Health Care System: What Should It Be and How Do We Sustain
It?” This hearing brought a new level of attention to rural
health care issues and soon calls for a focus on rural health within
HHS began to emerge.
In March 1986, the Under
Secretary for HHS asked the Health Resources and Services Administration
(HRSA) to investigate the pressing health concerns of health in
rural America. HRSA convened a department-wide Work Group, whose
membership was also pulled from the Health Care Financing Administration
(HCFA, now known as the Centers for Medicare and Medicaid Services
or CMS), the Public Health Service (PHS), and the Office of the
Secretary. Outside interests’ input was also included through
the creation of an external Advisory Group. The resulting report,
“Rural Hospitals/ Health Services – Executive Summary”
pulled together all of the existing knowledge on the status of health
care services in rural America and made recommendations as to how
to strengthen and expand access to health care services for non-metro
areas. The Work Group chose not to focus solely on reimbursement
policies under Medicare PPS, but also other “unique environmental
and institutional circumstances” that contributed to the financial
instability of rural hospitals, including lack of available capital,
size, location, and lack of expertise.
After 12 months of investigation
and analysis, the Work Group issued its findings, calling on HHS
to establish a centralized Federal voice for rural health within
the U.S. Department of Health and Human Services. This “institutional
focal point” for rural issues would be charged with collecting
and analyzing information relevant to rural health concerns, working
with State and local partners to enhance the delivery of health
services at the local level and coordinate rural health issues department-wide.
Creating the
Office of Rural Health Policy
It was one of those opportune
times when the Executive and the Legislative Branch came to a mutual
agreement independently. While members of Congress were introducing
bills calling for the creation of a rural health office, HHS, acting
on the findings of its rural work group, created the Office of Rural
Health Policy (ORHP) administratively July 24, 1987, followed by
the formal authorization of the Office by Congress in December 1987
under Section 711 of the Social Security Act. In its authorization,
Congress charged ORHP with informing and advising the U.S. Department
of Health and Human Services on matters affecting rural hospitals
and health care, coordinating activities within the department that
relate to rural health care, and maintaining a national information
clearinghouse.
One of the major concerns
for all involved in the very beginning was where to place ORHP.
Since one of the main precipitating factors of its creation came
from changes to the Medicare program, some believed that the office
should be in HCFA. However, many worried that placing this office
in HCFA would hamper its ability to be an independent voice. Others
pushed for ORHP to be located in the immediate Office of the Secretary
to give it a more visible position. The HRSA Administrator at the
time asked to house ORHP within HRSA, arguing that the Agency’s
focus on primary care and the underserved made it a logical fit.
From the very beginning, there was an understanding that ORHP would
have a Department-wide focus, even if it was physically located
within HRSA.
The legislative authority
for ORHP created a strong link to HCFA, charging it with advising
the Secretary on issues related to Medicare and Medicaid. The idea
was to ensure that future payment system regulations would take
rural concerns appropriately into context. At the time, another
change in the Social Security Act (Section 1102(b)) required HCFA
to issue rural health impact statements on regulations. That link
in the rulemaking process provided the basis for an ongoing working
relationship between ORHP and HCFA. This relationship continues
to allow ORHP to voice concerns over rural provisions of Medicare
payment systems.
Rural advocates were
pleased to see a voice for rural concerns created within HHS but
there were calls for an additional external voice. During the course
of the rural health hearings in 1987, some of the members of Congress
and the experts who they called to testify also urged for the creation
of an external group of advisors on rural health issues. Jeff Human,
who was appointed the first director of ORHP in 1987, acted upon
that advice quickly, establishing the National Advisory Committee
on Rural Health.
Advocates felt that there
was a need for an outside group of experts to also advise the policymaking
process and ensure that rural interests were addressed. That Committee,
under the initial leadership of four-term Iowa Governor Bob Ray
and subsequently by former U.S. Senator Nancy Kassebaum Baker and
currently by former South Carolina Governor David Beasley, has remained
a strong and independent rural voice. To date, the Committee has
made more than 300 recommendations, 35 of which eventually found
their way into law.
Establishing
the Office of Rural Health Policy: The Early Years
In some ways, establishing
and authorizing the Office of Rural Health Policy within the U.S.
Department of Health and Human Services was the easy part. After
the Office’s creation, the early years were spent determining
the core mission of ORHP and how best to tell the story of rural
health in America. The early leadership team, Jeff Human, Dr. Dena
Puskin, Jake Culp, Jerry Coopey, Arlene Granderson, and Cathy Wasem,
faced the task of creating from scratch an office designed to meet
significant and longstanding needs. The stakes were high –
rural health care was in crisis and the problems needed to be quantified,
publicized, and addressed with public policy solutions.
Congress provided some
key early help by creating a specific line item within the budget
to fund the Office. The staff quickly immersed itself into the policy
process, reviewing key Medicare and Medicaid regulations. In order
to inform that role and to build a scientific basis for sound rural
policymaking, ORHP also began funding rural health research. The
creation of the Rural Health Research Center program was essential
to establishing ORHP as the national voice for rural health. Beginning
with the premise that the research needed to be useful for the sake
of informing rural health policy, the research team at ORHP sought
to fund projects that would quantify how national health policies
affected rural areas in unique ways. They also brought together
rural health researchers, universities, foundations, and think tanks
to try to create a national rural research agenda that could be
coordinated with the research centers.
The relationships established
between the rural health research centers and ORHP continue to impact
the status of health care in rural America. From the very beginning,
those involved with rural health research were charged with discovering
ways to use their research as practical assistance to the aims of
ORHP as well as national and State policymakers. ORHP provided the
initial support to work with others within the research community
to create the Journal of Rural Health as a place where the work
of rural health services researchers could be published in a peer-review
journal.
During its early years,
ORHP also responded to another of its legislative charges, that
of creating a national clearinghouse to establish the Rural Information
Center for Health Services (RICHS). This service, operated in conjunction
with the U.S. Department of Agriculture, became an important national
resource. Staffed by reference librarians, RICHS allowed rural residents
to call toll-free to get information about rural health issues and
funding opportunities. With the emergence of the World Wide Web
in the late 1990s, ORHP expanded this function and replaced RICHS
with the Rural Assistance Center (RAC), housed at the University
of North Dakota. RAC is one-stop information portal on a wide variety
of rural health and human service issues.
Grants and Grantmaking
As ORHP became established,
Congress began adding grant programs to the porfolio. As noted,
the first grant program supported the rural health research centers.
The State Office of Rural Health program was created in 1991, which
provided funds matched on a 3:1 basis by the States to create individual
State Offices of Rural Health (SORHs). By 1994, there were State
Offices in each of the 50 States. ORHP also began a small demonstration
program in 1991 that eventually became the Rural Health Care Outreach
grants. These grants provided funding to improve program delivery
and increase access to care in rural communities. Rural Network
Development grants came online in 1996, which provided support for
rural health care providers to join together to build better systems
of care.
In 1997, Congress created
the Rural Hospital Flexibility Grant program to support grants to
States to work with small rural hospitals to see if they would benefit
from conversion to Critical Access Hospital (CAHs) status and funding
for this program finally emerged in 1999. The following year, Congress
added the Rural Access to Emergency Devices (RAED) program, which
provided grants to communities to support the purchase of automatic
external defibrillators and training in the use of these devices
by first responders. The Delta Network Development grant program,
serving the eight-State Delta region from Mississippi to Illinois,
was created in 2001. Network Planning Grants came along in 2002.
Congress also added funding for the Denali Commission to support
primary care construction in Alaska, which began in 1999. In a similar
vein, Congress created the Delta Health Initiative in 2006 to support
primary care delivery in Mississippi.
Just as important as
the grant programs were some special initiatives created during
the early years of ORHP. To help address the shortage of health
care providers in rural America, ORHP worked with the States to
start the National Rural Recruitment and Retention Network (3RNet)
in 1995. This not-for-profit organization functions as a Web-based
clearinghouse that health professionals use to identify places that
need them and States use to help recruit those providers into rural
and underserved communities. Membership in 3RNet now includes 46
States.
During 1994, as SORHs
began to mature, some of them started to help States develop State
Rural Health Associations (SRHAs). These organizations, whose membership
includes providers, consumers, and organizations, provided SORHs
with input directly from the “grass roots,” and an opportunity
to keep local communities informed. ORHP recognized the value of
these Associations and encouraged their development in all the States.
Today, there are 36 SRHAs.
Early on, those involved
with the creation of ORHP recognized the need to develop practical
tools that rural communities could use to improve their local health
care system. In 1998, ORHP began investing in a project that became
the “National Center for Rural Health Works.” The Center
develops tools, trains State teams and provides ongoing technical
assistance so they can help communities conduct a strategic planning
and engagement process, measure the impact of health care on their
local economy, and identify new services that could be supported
locally.
ORHP also became heavily
involved in telehealth issues under the leadership of Dr. Puskin,
who served as both deputy director and acting director during her
tenure. ORHP administered the Telemedicine Network grants through
the mid to late 1990s and also served as a repository of national
expertise on telehealth issues during this time. In fact, the success
of the telehealth work led to the creation of the Office for the
Advancement of Telehealth (OAT) within HRSA in 1998. OAT is now
housed within the HRSA, Office of Health Information Technology.
Growth and Sustainability:
New Leadership and a Revitalized Policy Role
Through the development
and expansion of these programs ORHP began to grow and the grants
became an area of greater focus and became important resources for
rural communities. Still, many challenges remained. The financial
status of rural hospitals had stabilized somewhat by the late 1990s,
but many were still operating with double-digit negative operating
margins and political pressure was growing to address the issue.
ORHP was also going through some leadership changes at this time
as Jeff Human retired and Dr. Puskin, the acting director, had left
to become the director of OAT. After a nationwide search in 1998,
HRSA welcomed a new ORHP director, Dr. Wayne Myers, whose express
charge was to revitalize the policy activities of ORHP.
The timing was opportune.
Congress passed the most sweeping changes to the Medicare program
since its inception with the Balanced Budget Act of 1997 (BBA),
which included dramatic changes to rural hospital reimbursement
as well as significant changes in other areas of care. The BBA and
two subsequent pieces of legislation (the Balanced Budget Refinement
Act of 1999 and the Beneficiary Improvement and Protections Act
of 2000) were implemented during Dr. Myers’ tenure, all of
which provided ORHP with an opportunity to take part in the rulemaking
process and live up to its original charge of ensuring a rural voice
in implementing policy. As Director, Dr. Myers worked to strengthen
the Office’s role in policymaking, relying on the experience
of his deputy director, Jake Culp, who had worked for years at HCFA
and whose connections with staff in the Medicare program were essential.
Dr. Myers also created a new position at the Office by naming a
policy coordinator, whose sole role was to focus on the rural implications
of the many regulations that are issued by the Department each year
on Medicare, Medicaid, and other key issues. That role was initially
filled by Tom Morris, who was succeeded by Emily Cook, and now Carrie
Cochran leads in that position. Each of the three individuals has
ensured that the rural voice is taken into account in the policymaking
process at HHS.
The BBA legislation also
included another key provision, the State Children’s Health
Insurance Program (SCHIP) that affected rural communities. HRSA
played a key role in helping administer this program along with
HCFA. Dr. Marcia Brand, who at that time was coordinating HRSA’s
SCHIP activities, worked extensively with ORHP staff to push for
innovative enrollment strategies in rural areas, which had higher
rates of uninsured children. This close association led to Dr. Brand
joining ORHP as Deputy Director in 2000 and succeeding Dr. Myers
as director in 2001.
During the tenures of
Dr. Myers and Dr. Brand, rural hospital margins began to improve
thanks to payment changes made by the Congress between 1997 and
2003. More importantly, ORHP was able to take an active part in
the rulemaking process for the implementation of the BBA, Balanced
Budget Refinement Act, Benefits Improvement and Protection Act,
and Medicare Modernization Act provisions and was able to make sure
rural concerns were taken into account as these bills became law.
In addition, the launching of the Flex grant program, ORHP worked
hand-in-hand with the States to identify small rural hospitals that
would benefit from conversion to CAH status. The numbers of CAHs
grew quickly, and by 2007, there were more than 1,286 CAHs as these
small rural hospitals found that the CAH designation provided needed
financial stability.
Rural Issues
Across HHS
Rural health issues drew
the attention of a new Secretary in 2002 when Tommy Thompson, a
former Wisconsin Governor, took over HHS and created a rural task
force to find out how the Department served rural communities. It
resulted in a year-long effort, co-chaired by HRSA Administrator
Dr. Elizabeth Duke, that brought together all of the key HHS agencies
and operating divisions to quantify how they served rural areas
and identify new strategies for improving that service delivery.
The Task Force’s 2003 Report, “One Department Serving
Rural America,” was a comprehensive rural assessment for HHS.
It led to spin-off rural initiatives in CMS, the Substance Abuse
and Mental Health Services Administration, and the Administration
on Aging. The initiative also resulted in the expansion of the National
Advisory Committee on Rural Health to add human service delivery
in rural communities to its focus areas. The Task Force also pushed
for the expansion of ORHP’s clearinghouse activity into a
broader focus on all of HHS programs which led to the creation of
RAC.
Recent Changes
and Activities
In 2003, ORHP also saw
another dramatic change to Medicare reimbursement and the creation
of a Medicare drug benefit with the passage of the Medicare Modernization
Act of 2003. Again, the passage of this landmark legislation made
even more significant changes to Medicare than the BBA and included
$25 billion in reimbursement changes for rural health care providers.
ORHP staff worked directly with CMS to help implement these provisions,
which helped eliminate, at least temporarily, many of the major
payment discrepancies between rural and urban providers.
With each year, new challenges
emerge. In 2003, Dr. Duke asked ORHP to assume responsibility for
managing the Agency’s Border Health activities, recognizing
that much of the U.S.-Mexico border was made up of rural communities.
It also made sense given the ORHP’s tradition of working across
Agency and Departmental programs. In 2006, Dr. Duke also asked ORHP
to take on another cross-cutting function by creating a focal point
for HRSA’s Intergovernmental Affairs activities.
The Office of
Rural Health Policy Commemorates 20 Years
Staff at ORHP have come
and gone and new functions have been added. At its core, however,
ORHP’s original charge to be a focal point for rural health
within the Department remains the same. To understand the impact
ORHP has had, one needs to look back at the state of rural health
prior to 1987.
“There was little
to no understanding of how private markets and government policy
hurt or failed to help rural health care and rural communities,”
said Tim Size, a longtime rural health leader and executive director
of a rural hospital cooperative in Wisconsin. “It was policy
development by feeling around in the dark. Without ORHP, we would
not have the policy development and communication platform within
the Federal Government, nor the means of financing rural-relevant
health policy research outside of the government. Those of us in
the field would continue to develop and advocate rural health policy,
but with significantly less efficiency and efficacy.”
The Office of Rural Health
Policy continues to build on its successes from the past 20 years
and learn from its challenges. With a staff committed to ensuring
that the rural voice is heard in Federal health care policy, ORHP
and its many allies around the Nation provide an active platform
for rural health concerns in the Federal landscape. Those involved
with ORHP in the past 20 years have witnessed how well-implemented,
rural-focused programs and resources can make a lasting difference
in the lives of those living in rural areas. Rural America matters,
and thanks to the Office of Rural Health Policy, the special health
and human service needs of rural Americans will continue to be addressed.
- 1980s: Ten percent
of all rural hospitals closed.
- 1985: Medicare moves
from a cost-based reimbursement
to Prospective Payment System (PPS)
- 1986-1987: National
concern about the hospital closures taking place in rural communities
grows.
- March 1987: HHS Work
Group issues report calling for
creation of Department focal point for rural health issues.
- July 1987: HHS creates
ORHP, names Jeffrey Human as its first director.
- Fall 1987: National
Advisory Committee for Rural Health
Established. (Adds Human Services charge in 2002.)
- 1990: Research grant
program is created. ORHP begins to fund Rural Health Research
Centers.
- 1990: Journal of Rural
Health is launched.
- 1990: Rural Information
Clearinghouse initiated.
- 1991: State Offices
of Rural Health Grant Program created.
- 1991: Rural
Health Care Outreach Grants -1996: Rural Health Care Network Grants
- 1997: FLEX Grants -2002: Network Planning Grants - 2006: Delta
Health Initiative
- 1994: All 50 States
have SORHs.
- 1995: 3RNET, the National
Rural Recruitment and
Retention Network, established.
- 1998: Dr. Wayne Meyers
named director of ORHP.
- 2001: Dr. Marcia Brand
named Director of ORHP.
- 2002: HHS Rural Task
Force Created.
- 2002: An updated version
of the Rural Information
Clearinghouse, the Rural Assistance
Center, is launched.
- 2003: “One
Department Serving Rural America” published by HHS Rural
Task Force.
- 1997 - 2003:
Rural hospital margins begin to improve.
- 2007: 1,286 Critical
Access Hospitals in the United States.
- 2003: ORHP assumes
responsibilities for U.S.-Mexico Border Health activities.
- 2007: ORHP commemorates
20 year anniversary.
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