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HONESDALE -- An innovative approach to the way rural hospitals provide care and are paid was officially unveiled in Harrisburg yesterday by the Pennsylvania Department of Health. It’s called the Rural Health Model, and Wayne Memorial Hospital is one of only five participating hospitals in the state. Under the Rural Health Model, major payers including four private insurers, plus Medicare and Medicaid, have agreed to pay participating hospitals a fixed amount annually instead of when the service is rendered.
“In addition to providing hospitals with a steady, predictable income and more financial security, the intent is also to help hospitals transform over a six-year period of time to invest more in preventive care with the ‘extra money’ or savings that should be generated,” said Wayne Memorial CEO David Hoff. “Hospitals could use a portion of that stable income to fund health initiatives, such as vaccinations,” he suggested, “or work in collaboration with others to address issues like lack of transportation or create programs for patients with chronic obstructive pulmonary disease.
“In short, this is a multi-year transformation for Wayne Memorial In helping people stay healthy as well as helping them heal,” he continued. “Traditionally we were paid only when people got sick and we helped them get better; now, we’re getting paid to keep people healthy. It’s turning the glass upside down.”
According to the Pennsylvania Department of Health (DOH), nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at-risk of closure. State Senator Lisa Baker (R ), who represents the Wayne Memorial service area, called the Rural Health Model “a lifesaver for many of our rural healthcare providers.” Rachel Levine, MD, the state’s physician general, said the model was “transformative,” and she anticipated having up to 30 participating hospitals in the near future.
Hoff noted that Wayne Memorial was not in financial duress but chose to participate in the program because it’s “good for the community in trying to keep people healthy" and “if we get in on the ground floor, we can help design the future of the program to the benefit of all, including the insurers who could see their costs go down.”
The four participating private insurers—Geisinger, Highmark, UPMC and Gateway—are calculating their payments on historical data for each hospital, but Hoff said payments can be adjusted as needed.
James Pettinato, RN, Wayne Memorial’s director of Patient Care Services, said the hospital might initially focus on reducing unnecessary utilization of the Emergency Department, which can be costly for patients, their families and the hospital. “There are several common complaints that drive patients into our ED when they could in fact be seen in an alternate care setting such as a clinic or doctor's office,” Pettinato explained. “We may need to do more education or address social determinants of health such as lack of transportation or food insecurity. We may need to re-allocate resources.”
Pettinato said the hospital would work in concert with Wayne Memorial Community Health Centers (WMCHC), the hospital’s clinical affiliate, which employs most of the area’s primary care providers and many other community partners. These partnerships will become key components when facing many of the social economic issues related to our patient population.
Although a similar model has been in place in Maryland for more than a decade, State officials said the Rural Health Model was the first of its kind in the nation and progress would be watched closely by many other states.
“It’s a very exciting time in healthcare,” said Pettinato, “and Wayne Memorial is going to be at the forefront of this change.”
The other participating hospitals are Endless Mountains and Barnes Kasson in Susquehanna County, Jersey Shore in Lycoming County, and UPMC Kane in McKean County.
Pictured from left: Senator Lisa Baker; Sara Adornato, CEO, Barnes-Kasson County Hospital; Representative Tina Pickett; Loren Stone, CEO, Endless Mountains Health Systems; Tammy Anderer, CAO, Geisinger Jersey Shore; Andy Carter, President and CEO, The Hospital and Healthsystem Association of Pennsylvania; Rachel Levine, MD, Secretary, Pennsylvania Department of Health; David Hoff, CEO, Wayne Memorial Hospital.