As the move toward population health has gained momentum, many people wonder if it spells trouble for hospitals and health systems in rural areas. But interesting programs are emerging in states such as Pennsylvania that are considering population-based reimbursement to support hospitals critical to their communities.

Most rural facilities are striving to change in some significant way. A 2013 National Rural Health Association policy paper recommended a “meaningful phased and nondestructive transition strategy that successfully links today’s payment and patient care delivery structures to the health care systems of the future.” Yet, with a new administration in Washington, there is renewed debate. Some rural CEOs want to revert to (or stay with) a fundamentally fee-for-service environment; others will pursue new payment and delivery models while keeping a close eye on changing regulations.

While disruptive change will continue in health care, rural hospitals and health systems can still still seize the opportunity with population health strategies.

The more things change

Rural health care leaders and board members need to embrace different strategies and to recruit executives who can implement them. The fundamentals of rural health care are not changing with the transition in the White House. For rural or semi-urban providers with a critical mass of loyal “customers” and relatively little competition, there may be opportunity. Small can mean nimbleness and ability to change.

Keys to success for most rural organizations will continue to be:

  • Revenue cycle improvement.
  • Sustainable growth.
  • Cost control.

Other critical emphases will be:

  • Improved quality metrics.
  • Exploration of alternative payment models.
  • Enhanced data mining (coding, market intelligence, post-acute activity and so forth).
  • Acceptance of increased risk from government and commercial insurers.

One system’s story

Hancock Health in Greenfield, Ind., has embraced aggressive population health strategies. Twenty-five miles east of Indianapolis and serving approximately 75,000 people, it has pursued the following initiatives in recent years:

A renewed focus on key success factors for fee-for-service reimbursement: Hancock’s priorities have included construction of a new comprehensive cancer center, partnering with experts to build a culture of accountability driven by reliable benchmarks, development of a Lean/Six Sigma process improvement program, a renewed focus on supply chain optimization, and virtual urgent care access via telemedicine services. Perhaps most important, Hancock is using its strategic relationships with other independent hospitals in the Indianapolis metro area via joint ownership in its Suburban Health Organization to develop economies of scale and “systemness” without losing its local identity.

Intense focus on process-of-care metrics: Hancock has a full-time employee who monitors all inpatients falling into one of the value-based payment diagnostic groups. It has found that real-time intervention is possible, resulting in near-perfect process-of-care scores.

Aggressive physician integration with a new focus on prevention and wellness: Hancock aims to bring all physicians on board with its current vision and to pursue the integration of all primary care practices with strategic needs, including full patient-centered medical home certification in the next 18 months. In addition, with the construction of a second wellness center in the region, the system’s physician referral program is making headway. Hancock also participates in a Medicare Shared Savings Program accountable care organization with several other members of the Suburban Health Organization and is included in the Medicare Comprehensive Care for Joint Replacement bundled payment program — both requiring significant physician integration and leadership.

Significantly expanded community care coordination: Hancock’s Healthy365 program focuses on public policy; the built environment; and social networks at work, home and school that influence behavior leading to better health. In addition, the Systems of Care initiative brings together 47 local social service, nonprofit, governmental and health care organizations supporting youth and families struggling with mental health and substance abuse. Finally, the Congregational Network initiative links local faith communities with the health system to better support the health needs of individual members.

These are a few initiatives that illustrate a commitment to population health strategies that also make sense for Hancock in the marketplace.

The leadership needed

Rural hospitals and health systems like Hancock face a challenge as they recruit CEOs and other top executives. Do they focus on individuals who have experience in a fee-for-service environment or those who are experimenting with value-based care and progressive population health strategies? We believe the answer is both. Tomorrow’s rural health leaders must be simultaneously old-school and progressive. Board members must recruit CEOs and other executives who understand population health and have a vision for trying new things, especially through creative partnerships.

Rural organizations will need to remain open to creative, risk-taking leadership, even if population health practices are not significantly affecting their business. Several position descriptions used in the recruiting of rural CEOs illustrate what is expected of rural CEOs and other executives:

  • “Have a firm grasp of current and future health care policies, practices and trends affecting the industry.”
  • “Provide strategic and operational leadership” in order to “navigate the minefield of health care reform.”
  • “Collaborate with the board and leaders to define a clear population health strategy and road map from the present fee-for-service model to a value-based purchasing model.”
  • “Address the underlying developments in medical care, access issues, cost implications and shifts in market forces facing hospitals in the next decade.”
  • “Exhibit a combination of vision, energy and experience in enhancing quality of care.”
  • “Build new alliances, affiliations and partnerships with other health care organizations.”

There are few executives who can do all of these things. Leaders of rural hospitals and health systems will need support and will need to stay on top of developments as health care enters yet another new era. The best leaders will be those who are comfortable with a traditional fee-for-service environment yet wise enough to know that rural health providers will need new ideas and novel approaches.

Steve Long is the president and CEO of Hancock Health and Hancock Regional Hospital in Greenfield, Ind. Beth A. Nelson is a consultant in the health care practice of the executive search firm Witt/Kieffer, based in Oak Brook, Ill. 

The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.