Rural Relevance in Oklahoma
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1 Rural Relevance in Oklahoma OHA Annual Conference 2017 November 1, 2017
2 Agenda Introductions The Rural Relevance Study Impact of Current and Proposed Health Policies on Rural Providers Oklahoma Rural Hospitals: INDEX Update CAH vs. Rural PPS INDEX Performance Page 2
3 Rural Health Research: The Rural Relevance Study Page 3
4 Rural Relevance in the News Page 4
5 Rural Populations Suffer many Health Disparities Rural hospitals care for older, poorer, and sicker populations than non-rural providers: These rural populations also have less access to primary, dental, and mental healthcare: Page 5
6 Rural Health Disparities Vary by State Rural communities in the South are faced with the highest rates of premature death and diabetes in the nation. LEGEND Population Health Status %ile 60-80%ile 40-60%ile 20-40%ile 0-20%ile Opioid abuse is most prevalent across the Mid-Atlantic and West, while rural populations in the Northeast see the highest suicide rates. Page 6
7 Rural Health Disparities Vary within Oklahoma Opioid and other Drug Overdose Population over 65 LEGEND Population Health Status %ile 60-80%ile 40-60%ile 20-40%ile 0-20%ile Opioid abuse is most prevalent across the Western half of the state, while rural populations in the Northeast see some of the lowest overdose rates in the nation. Rural communities in the central area of the state have lower density of people over 65 than the rest of the state Page 7
8 Serving the Underserved: Rural Provider Status The Rural Health Safety Net is Under Pressure Rural Patient Mix 1 : Non-Rural Patient Mix 1 : 41% of rural hospitals have a negative operating margin. 1 The average rural hospital payor mix is 55% governmental rural hospitals have closed since CMS Healthcare Cost Report Information System, Univ. North Carolina Sheps Center, October 2017 Page 8
9 Impact of Health Policies on Rural Communities Sequestration 2% Revenue Cut Bad Debt 35% Revenue Cut Proposed Graham-Cassidy $1T Medicaid Cut $2.2B loss in rural hospital revenue () 59,000 jobs lost () $6.8B loss to GDP () Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2017) Page 9
10 Modeled Impact of Sequestration on Rural Communities Modeled Total Rural Hospital Revenue Lost due to Sequestration National Impact Oklahoma Impact $351M loss in revenue $11M loss in revenue 15,000 jobs lost 521 jobs lost $1.8B loss to GDP $61M loss to GDP Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 10
11 Modeled Impact of Bad Debt Cuts on Rural Communities Modeled Total Rural Hospital Revenue Lost due to Bad Debt Cuts National Impact Oklahoma Impact $137M loss in revenue $3.7M loss in revenue 6,200 jobs lost 178 jobs lost $728M loss to GDP $20.9M loss to GDP Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 11
12 Modeled Impact of Proposed Graham-Cassidy Medicaid Cuts on Rural Communities Modeled Rural Hospital Revenue Lost due to Graham-Cassidy Medicaid Cuts National Impact Oklahoma Impact $1.7B loss in revenue $30.7M loss in revenue 38,000 jobs lost 721 jobs lost $4.2B loss to GDP $81.6M loss to GDP Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 12
13 Rural Hospitals in Medicaid Expansion States See Significantly Higher Operating Profit Margins Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 13
14 Rural Hospitals in Medicaid Expansion States See Significantly Higher Operating Profit Margins Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 14
15 Rural Hospitals in Medicaid Expansion States See Significantly Higher Operating Profit Margins Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 15
16 Rural Operating Margins Vary by State In Oklahoma, the median rural hospital operating profit margin is -2.0%. 57% of rural providers across the state see negative margins Median rural hospital operating profit margin in Kansas is -6% with 77% of rural providers operating with a negative margin Missouri rural providers also operate at a loss. The median operating profit margin is -0.6%, and 51% show a negative margin Arkansas has a positive operating margin (0.5%), however 42% of hospitals in the state have a negative operating margin Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 16
17 Graves-Loebsack Save Rural Hospital Act Creates an Alternative Hospital Model for the Future Community Outpatient Hospital status preserves emergency and outpatient care for rural communities. Conversion would financially benefit 97% of eligible hospitals currently operating at a loss. $535K hospital revenue preserved nationally 24,000 jobs preserved nationally $2.8B in GDP preserved nationally This model is based upon the following elements of the Community Outpatient Hospital reimbursement structure. Note that this model is not inclusive of grant funding. 105% of reasonable costs reimbursed 100% of bad debt reimbursed Exemption from 2% sequestration Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 17
18 Impact of the Save Rural Hospitals Act: Estimated Annual Rural Hospital Revenue Preserved 40 Oklahoma rural hospitals could benefit from this new model Source: Rural Relevance Study (Topchik, et al. 2017) and CMS Healthcare Cost Report Information System (2016) Page 18
19 Oklahoma Rural Hospital Performance: INDEX Update Page 19
20 The Hospital Strength INDEX The Chartis Center for Rural Health leverages the performance management tools of ivantage Health Analytics. The ivantage Hospital Strength INDEX: Provides a comprehensive and objective assessment of all rural and Critical Access Hospitals. Aggregates data for more than 50 indicators organized into 8 performance pillars. Ranks hospitals against peers nationally using a point scale for all performance categories. Offers the first national rating system built to include the roughly 1,300 Critical Access Hospitals. Provides transparent and actionable performance metrics. Page 20
21 Performance Pillars Span Market, Value, and Finance Market Value Finance Inpatient Market Share Outpatient Market Share Quality Outcomes Patient Perspective Cost Charges Financial Stability Inpatient Market Share Diagnostics Market Share Emergency (ED) HF Readmission All Domains Adjusted IP Costs Adjusted IP Charges Capital Efficiency Emergency Market Share Outpatient (OP) PN Readmission Adjusted OP Costs Adjusted OP Charges Other OP Surgery Market Share Immunization (IMM) Hospital-Wide Readmission Venous Thromboembolism (VTE) Proprietary Mortality Score Page 21
22 Rural Hospitals in Oklahoma Per our definition, there are 76 rural hospitals (42 Rural PPS, 34 CAHs) in Oklahoma, as seen on the map plotted above Page 22
23 Oklahoma CAH INDEX Performance Overall INDEX Score IP Market Share OP Market Share Quality Outcomes Patient Sat. Cost Charges Financial Stability OK CAH Median All U.S. CAH Median OK CAHs vs. U.S. CAHs Page 23
24 Oklahoma Rural PPS INDEX Performance Overall INDEX Score IP Market Share OP Market Share Quality Outcomes Patient Sat. Cost Charges Financial Stability OK Rural PPS Median All U.S. Rural PPS Median OK Rural PPS vs. U.S. Rural PPS Page 24
25 Oklahoma CAHs vs. Rural PPS Performance Comparison Overall IP Share OP Share Quality Outcomes Pat. Sat. Cost Charge Financial Stability OK CAH OK Rural PPS OK Median OK Rural PPS hospitals, at the median, slightly outperform OK CAHs in Overall rank driven by stronger Medicare IP and OP market positions and lower Medicare IP and OP costs OK CAHs significantly outperform their Rural PPS peers in the areas of Quality and Patient Satisfaction, and have much lower Medicare IP and OP charges Page 25
26 Thank you! Michael Topchik National Leader Chartis Center for Rural Health (207) Hunter Clark Account Executive Chartis Center for Rural Health (207) Page 26
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