At rural health conference, trepidation about healthcare reform

DULUTH, Minn. -- “Stuff is going on right now and it’s getting really aggressive.” That was the message this morning to several hundred Minnesota health-care providers, hospital administrators and medical students from Eric Shell of the consulting firm Stroudwater Associates.

Shell, whose firm is based in Maine, was  the opening speaker at a two-day Minnesota Rural Health Conference here, focused on healthcare reform and access to medical services in rural areas.

Shell painted an urgent portrait of the shifting healthcare landscape, some of the changes stemming from federal healthcare reform and emerging new quality measurement and reimbursement models. The shift is away from fee for services and toward providers working together and being paid based on results.

Minnesota may be better positioned than most states when it comes to dealing with what’s coming because the state has been experimenting with collaborative care for years. Earlier this year, the state received a $45 million federal grant to fund a State Health Care Innovation Plan, which will push forward efforts related to collaboration, lowering costs and improving health outcomes.

But Shell said there are factors that will affect the sustainability of rural hospitals and clinics that have nothing to do with reform, such as more people having high deductible insurance policies. These policies make people reluctant to seek treatment for minor and even major ailments. He cited a recent study that found while 17 percent of employers nationwide offer only high deductible policies today, the projection for 2014 is 44 percent. “That is frightening,” he said, adding that hospitals and clinics will have to fight harder to win patients, who have become “consumers.”

He also suggested that larger health providers, including urban hospitals, will be looking to expand their patient bases and that could mean reaching into rural markets. “They will have to jack up volume,” he said. “They have already been beating themselves to death in the cities.” He said the fact that health care reform will lead to more insured people across the board will make rural areas more attractive. “If I’m a hospital, I’m coming to rural in a big way.”

While that could be good for rural patients, it means some providers need to step up their games to stay competitive. In rural areas, given sparse populations and a lack of doctors and nurses, providers are used to collaborating. That’s a good thing, he said. “You may have to consider a regional alignment… to survive the shaky bridge.” Shell suggested forging strong relationships with providers and patients alike. “We really should understand what’s going on in the market around us.”

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