At Kane Community Hospital in northwest Pennsylvania, the manager of information systems is also the business office manager, registration coordinator and HIPAA security officer. At a 26-hospital alliance in the Great Plains, several facilities don’t even have a full-time person on their IT staffs; instead, four or five people—ranging from office managers to nursing managers to payroll managers—share the load. At Rolling Fork General Hospital in the Mississippi Delta, the CEO spends part of his time dealing with information technology—and, in a pinch, he’s also called on to serve as an emergency medical technician and ambulance driver.
With low patient censuses, sluggish economic conditions and heavy reliance on government payers, small and rural hospitals must stretch scarce resources to meet a multitude of competing needs, and investments in information technology—for staffing, equipment and upkeep—often takes a backseat.
“Probably the biggest hurdle for small and rural hospitals is financing capital expenditures for health information technology,” says John Supplitt, senior director of the American Hospital Association’s Section for Small or Rural Hospitals. “You may have limited capital resources to begin with, and you also face competition for those dollars—your operating room and emergency room and diagnostic equipment needs are all competing with information technology for scarce resources.”
It’s an old story: Hospitals in general are far behind other service industries—banking, airlines, real estate—when it comes to using information technology even though it promises not only to improve efficiency and other business measures, but most importantly to enhance patient safety. In an increasingly competitive environment, hospitals that don’t invest in IT will struggle to survive.
The problem is doubly vexing for small and rural hospitals where a $500,000 or $1 million project may swallow up a substantial chunk of the overall budget. Understandably, small and rural hospitals are hesitant to invest that sort of money in an area that is constantly changing.
“If something like bar-code technology is not really standardized yet, rural hospitals don’t want to invest in a system, then be told the next year that this is not what they needed,” says Michelle Casey, senior research fellow with the University of Minnesota’s Rural Health Research Center. “Efforts to standardize will be key, so hospitals don’t invest in something that may be obsolete soon.”
Though rural hospitals may lag, information technology is still very much at the top of their priority lists. According to a recent study by the Flex Monitoring Team, a consortium of rural health research centers from the Universities of Minnesota, North Carolina and Southern Maine, the vast majority of a specific subset of rural hospitals that are designated as critical access hospitals have high-speed Internet access, and half have formal IT plans in place.
Like their metropolitan counterparts, rural hospitals are eager to explore some of the hottest clinical technologies, such as electronic medical records, computerized provider order entry, remote results reporting and digital radiology. The EMR in particular is gaining in importance in rural areas because the sickest and most severely injured patients frequently must be moved to other facilities.
“We transfer patients to a tertiary hospital about 40 miles away almost every day, and patients get transferred back here just as often for rehabilitation,” says Tommy Mullins, administrator of Boone Memorial Hospital, a public hospital in Madison, W.Va. Ironically, Boone is one of the few rural hospitals that’s up to speed with a full EMR, while the referral hospital is still paper-based. “It would be wonderful if we could send that record back and forth electronically every time,” Mullins says.
Because of their remote locations and, in many cases, lack of certain specialties, rural hospitals have an increased focus on telemedicine consultations. The Flex Monitoring Team study found that 80 percent of the critical access hospitals use telemedicine links for diagnostic imaging interpretation.
“Teleradiology use was even higher than I thought it was going to be,” says Casey of the University of Minnesota, who helped compose the study. “That’s an area where even very small hospitals are doing something.” Other important technologies cited for small and rural hospitals include remote clinician access to results, shared after-hours pharmacy links and bar-coding technology for patient identification.
Placing newfound importance on these technologies, of course, doesn’t mean that small and rural hospitals actually use them yet. The Upper Midwest Rural Health Research Center—a collaborative effort between the Universities of Minnesota and North Dakota—specifically looked at technology and safety in rural hospital pharmacies. The study found that just 3 percent of rural hospitals nationwide used bar-code technology for medication administration, 11 percent of rural hospitals don’t even have a pharmacy computer and another 14 percent had computers but didn’t use them for any clinical purposes, focusing only on record-keeping and billing.
The Flex Monitoring Team study examined a wider range of information technology issues among CAHs, and found that the overwhelming majority are computerized for administrative functions. But only 21 percent have clinical guidelines programmed into hospital computers, 21 percent have rudimentary elements of an electronic medical record and only 33 percent track medication administration electronically.
Rural hospitals can’t afford to ignore technology just because it’s difficult or they lack financial resources. If they fail to compete, they’ll lose patients to neighboring hospitals, to clinics, to big-city medical centers. Some rural hospitals have already hit upon a formula for success.
Joining a system with deep pockets is perhaps the surest way for a hospital to guarantee access to capital.
As a member of HCA Inc., Colleton Medical Center, a 131-bed facility in Walterboro, S.C., was able to fund a PACS for digital radiology, computerized provider order entry, electronic results reporting and electronic medication administration. “Because we’re investor-owned, we’re pretty wired for a hospital our size in the rural community,” says Colleton CEO Rebecca Brewer.
But the system doesn’t necessarily have to be big, or investor-owned, to reap big financial benefits for its members. The Great Plains Health Alliance, a not-for-profit hospital management company that operates in Kansas and Nebraska, established a subsidiary in 2003 to help its members purchase and support information systems. That subsidiary, the Midwest Health Systems Data Center, has saved its members an average of almost $100,000 a year compared with the estimated stand-alone facility cost, and has kept annual IT budgets to about $55,000 per facility.
Not every hospital can be part of a system, of course, and stand-alone hospitals have to purchase IT as well. Leasing arrangements for IT are popular among stand-alones. For example, over four years, Boone Memorial spread out its $500,000 investment in an information system that included an electronic medical record in a lease-to-own deal. “As a small, rural hospital, we just don’t have that type of capital to lay out that sort of big cost up front,” says Mullins.
Grants from both private and government funders also lessen the blow of financing information technology for rural providers. The Agency for Healthcare Research and Quality is one of the biggest sources; in 2004, AHRQ earmarked $139 million specifically for advancing rural health information technology. One of those grants went to the University of Mississippi Medical Center to link eight small, rural hospitals with an electronic medication error reporting system.
“These hospitals didn’t do anything from the clinical side before, they were nearly all paper-based,” says Mississippi’s Patient Safety Center Director C. Andrew Brown, M.D., who is leading the study. Two years into the grant, results are positive, with the eight hospitals reporting their errors and near-misses at 120 percent the rate of the University of Mississippi Medical Center.
The Department of Health & Human Services’ Office for the Advancement of Telehealth and Office of Rural Health Policy are other leading funders aimed specifically at small and rural hospitals and technology. Of course, such funding largely depends on how well a hospital can write its grant application, which takes precious time and resources.
“The difficult thing for rural hospitals is actually writing the grants; they’re complicated and they take a lot of time,” says Margaret Twidale, manager of information systems at Kane (Pa.) Community Hospital.
For its most recent grant, Kane partnered with a larger hospital in Erie, Pa., for a telemedicine project connecting Kane’s ER with the larger hospital’s cardiology department. Kane received a T-1 connection and all sorts of fancy computer equipment, while the Erie hospital did all the dirty work of actually putting the grant together. “And they were glad to do it—it’s a mutual benefit because we’re able to provide this service and they’re going to make money from the consults and referrals,” Twidale says.
Probably the biggest financial boon for small and rural hospitals’ IT projects has been the development of Medicare’s Rural Hospital Flexibility Program over the last nine years. The program rewards critical access hospitals with cost-based reimbursement instead of prospective payment. Initially restricted to 15 beds, CAHs really took off in 2003, when the Medicare Modernization Act expanded the definition to include hospitals with up to 25 beds, as long as they are at least 35 miles away from their closest neighbors.
“Some of these hospitals were on the brink of bankruptcy; now, instead of running at a $600,000 or $800,000 annual loss, they’re almost at break-even,” says Jonathan Andrus, assistant administrator of Fairchild Medical Center in Yreka, Calif., a stand-alone not-for-profit, which responded to the MMA by cutting beds, and was certified as a CAH last year.
Information technology spending is considered an allowable cost under Medicare for critical access hospitals, so even as the program financially rescued struggling hospitals, it also jump-started dormant information technology programs. “It’s made some of the more expensive technology doable for us,” says Mullins of Boone Memorial, which also downsized to 25 beds and was certified as a CAH in 2004. “If you’re critical access, your financial manager shouldn’t be intimidated by the fact that technology is expensive.”
Once a new information system is installed though, finding someone to maintain it can become especially problematic. Recruiting and retaining talented IT staff is difficult for all hospitals, and harder still for lower-paying small hospitals outside of metropolitan areas.
Outsourcing can help, to some extent. “But beware: There are vendors who say they’ll be there shoulder to shoulder with you to service that information system, but once you’ve installed that, their accessibility becomes very difficult,” says the AHA’s Supplitt. “ 'Doing your homework’ doesn’t even begin to convey the degree to which small and rural hospitals have to research these vendors and these systems.”
In-house IT staffers in rural settings need to be extra sharp because they may be called on to fill three or four different roles or to maintain all the hospital’s systems, whereas their metropolitan peers may be able to narrow their focus. Signing bonuses and human resources consultants might help recruiting efforts, but they’re expensive.
Savvy hospitals can make their rural setting a selling point by emphasizing the quality of life and advantages for raising a family. But there are risks to the strategy. “You have to be really careful when you’re recruiting someone from the outside,” says Brewer of Colleton Medical Center, who notes that her facility is within an hour of Charleston, S.C., and not too far from some other vibrant metro areas. “If you recruit someone from those areas, odds are that they’ll leave you sooner rather than later because they get a better offer from closer to home.”
Some rural hospitals prefer to look for IT workers locally and help develop them into the job. “I hired a couple of local individuals who were very advanced out of high school in computer technology,” says Mullins of Boone Memorial. “If they’re from your back yard in the first place, they’ll be more likely to stay with you.”
New hires aren’t the only option. “We identified two people who had an interest in computers, and we supported them to go back to school,” Brewer says. “When you’re a small hospital, you have to take a different approach—you find people who are interested in certain things, then invest in them and ‘grow your own.’”
The consortium or system approach adds another clear advantage to members, besides simple cost savings: It lessens the need to recruit as many IT staffers because several functions can be centralized.
“We’ve taken on the role of ‘super-user’ for our hospitals, and we do lots of the work that, at a larger facility, would be done by your own staff,” says Kenneth Abendshien, director of information systems at the Midwest Health Systems Data Center. Abendshien notes that 16 of his 26 facilities don’t even have a network administrator on staff, and that one of his employees travels from hospital to hospital to do troubleshooting, maintenance and upgrades.
Just as hospital information technology is changing, the role of physicians in the process has changed, too. Stereotypically technophobic and stuck in the paper-based world, most physicians have seen the light in recent years and appreciate the many benefits of IT. Like their big-city colleagues, physicians in rural areas are becoming increasingly tech-savvy.
“In small hospitals, you tend to have older physicians who have been around a long time,” Brewer says. “In the past, I occasionally had threats that they were going to leave if we didn’t go back to old ways, and complaints that nurses spend more time nursing computers than patients. But in the last year or so, the doctors have actually been pushing the technology.”
As these physicians electronically upgrade their own clinics, they look for similar capabilities at the hospitals where they admit. That can lead to additional problems if the hospital doesn’t have much in the way of information systems yet, or if they use a vendor that’s incompatible with the doctors’ clinics.
“When physicians and clinics purchase software, they’re only looking for something that’s unique to their needs,” says the AHA’s Supplitt. “They won’t be able to interface with the hospitals and other settings unless they specify that. And that compatibility costs money.”
Few hospitals, rural or otherwise, are prepared for that type of integration. But others are prepared, which can create competition where none previously existed. For instance, a community’s sole provider might once have enjoyed a monopoly in areas like diagnostic imaging and lab services, but in a virtual world, that’s no longer the case.
Colleton Medical Center faces increasing competition from a laboratory services provider that can electronically transmit results directly into a physician’s office medical record.
“I don’t have that capability now, so I’ve been losing some business,” Brewer says. “Taking a little bit of business out of a small hospital hurts a lot more than it would in a metropolitan hospital.”
There’s a clear disadvantage to a little lost business now—but doctors’ surging commitment to information technology, even in rural areas, is a positive sign overall. “Doctors are learning that this can make life easier and more manageable,” Brewer says. “And now that doctors are getting more progressive and leading the charge, the whole industry is going to move forward with IT.”
—Chris Serb is a freelance writer in Chicago.
This article first appeared in the August 2006 issue of H&HN magazine.
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