The Supreme Court will be weighing in on health care reform sometime in mid-2012, putting its future into question. However, the health care industry is not holding its breath. Standing still in today's somewhat chaotic environment — reform, economic woes, capital budget pressures, reimbursement cuts and more — is not an option. Budgets and services are being cut, and hospitals that are considered the hubs of communities, such as the venerable St. Vincent's, have shut their doors.

Doing more with less applies to everyone. The larger academic enterprises and the rural, community hospitals all share the same challenges and the same goals, such as performance improvement and attesting to meaningful-use requirements. They need the same tools, they have to meet the same requirements, and they must keep pace with rapidly advancing clinical knowledge. But the rural, community provider must do it with tighter budgets and fewer personnel.

Smaller providers, which have fewer resources and feel the impact of payments cuts more acutely, are usually at a disadvantage. Yet their survival is no less important: Academic centers may be the source of innovation for the health care industry, but community hospitals are the backbone of their communities, not just providing health care but often serving broader social needs. Imagine the catastrophic impact if the almost 2,000 rural hospitals listed in AHA Hospital Statistics ceased to exist.

Help for Smaller Hospitals

Fortunately, rural and community hospitals are resilient and, where there is challenge, there is also opportunity. Here are some examples of assistance available to smaller providers:

  • Many institutions (1,327 as of March 2011) have become certified as critical access hospitals. By definition, CAH facilities must have 25 or fewer acute care beds and must be more than 35 miles from another hospital. They are eligible for a more flexible, cost-based reimbursement program from Medicare. The bump in reimbursements is intended to bolster finances and stem the tide of closures.
  • The Patient Protection and Affordable Care Act, in its current form, broadens the definition of a low-volume hospital for fiscal 2011 and 2012. This redefinition makes more rural and community hospitals eligible for special provisions from the CMS prospective payment system.
  • Beyond the absolute value of improving patient care and receiving incentives from the American Recovery and Reinvestment Act, providers using electronic health records are eligible to participate in a number of programs. The new Partnership for Patients program, intended to improve care quality, focuses on keeping patients from getting injured or sicker and on helping patients heal without complications. The program addresses such issues as adverse drug events and health care-acquired infections.
  • Reporting on outcomes is the next wave of change as the health care system moves from a volume-based system to a value-based, pay-for-performance system. Rural and community hospitals with a CAH designation can participate in the Flex Medicare Beneficiary Quality Improvement Project, specifically designed to improve quality outcomes and related reporting. The project focuses initially on care management protocols; later, it will look at quality measures and reporting.
  • To address the impending care demands and opportunities, many facilities are banding together in loosely defined alliances to take advantage of group purchasing equipment or partnering with larger neighbors to broaden services. Accountable care organizations are still in early formation, but they offer some community hospitals the opportunity to join forces with larger facilities in caring for defined populations.

However, many community and rural hospitals will remain largely independent. Regardless of the nature of their alliances and their status under Medicare, as stated earlier, community providers still need to take the same actions as larger hospitals — and under more challenging conditions.

The Necessity of Information Technology

Managing the coming reimbursement cuts, and dealing with limited budgets, means making operations smarter and more efficient. It also means applying measures to improve quality, reduce errors and help patients better manage their health.

In addition, if the reform law stands, rural and community providers can expect an increase in patients, taxing their already strained resources. Their patient bases comprise a large number of the uninsured — they also tend to be sicker and older. These providers will need to care for more people, perhaps sicker people, and without a leap in financing and resources.

Community and rural hospitals have been slow to adopt health care information technology, hampered by budgets, staffing and physical infrastructure. Some of these providers will qualify for an approximately 50 percent increase in Medicare reimbursements to cover the costs of EHR implementation, but only after meaningful-use thresholds are achieved.

  • The incentive payments under ARRA do not fully cover the up-front costs of the software and hardware. Purchasing an HIT system, from a pure product perspective, is only one of the burdens facing providers. Implementing a system is a complex and often lengthy project. Many rural and community-based facilities do not have access to qualified IT professionals to install and maintain systems. In the past, this would leave rural and community facilities out of the reward system for meaningful use of electronic health records.

Fortunately, HIT is more accessible today. The costs of technologies are decreasing, and remote management via high performance networks means it is possible for the rural and community hospital to take advantage of enterprise-level HIT for a reasonable cost. Furthermore, the HIT industry is becoming more adept and efficient at implementing these complex systems, leading to significant reductions in implementation costs. This means that HIT is coming within the technical and budget reach of virtually all community hospitals.

HIT Options

Here are some of the advances in HIT now available to rural as well as academic hospitals:

  • Applications can be delivered remotely, with the applications and the data housed "in the cloud." Cloud computing is increasingly able to provide secure, relatively inexpensive and robust application delivery support to many locations. Moreover, managing the cloud helps ensure that core computer operations are run expertly, new regulations are adopted quickly and new technologies are introduced.
  • Application systems are provided with comprehensive content. In the past, organizations often had to develop content such as order sets, documentation templates and data entry screens from scratch. Community hospitals often do not have the resources to engage in this development and will question the need to reinvent that which other organizations already have adopted successfully.
  • Model implementations have been established. These implementations bring a degree of rigor to the organization. For an organization that may not have deep project management talent and may not desire to engage in lengthy discussions about implementation tactics, these model implementations can lead to quicker and less expensive implementations.

These advances reflect the convergence of new information technology (cloud), a growing base of understanding of what works, and what doesn't work, in systems design (content) and the maturation of the industries thinking about implementation (model implementations).

Regarding the latter, for many years it was believed that buy-in by clinicians and other stakeholders was critical for a successful implementation; and that buy-in was best achieved by stakeholder involvement in all system decisions. Buy-in is still critical. But many stakeholders have evolved; they have bought in enough to the value of electronic health records that they no longer need to weigh in on a large number of decisions.

While the convergence of these factors has enabled sophisticated health information technology to lie within the reach of the small community hospital, the industry and the hospitals should not believe that this convergence solves all of the challenges an organization faces when it undertakes an IT-based transformation of its clinical, administrative and revenue-cycle processes.

Cloud computing is maturing, but it takes great skill to manage a cloud. Moreover, the skill needed will become more extensive over time as the technology continues to become more sophisticated and the industry faces potential additional regulations (such as treating EHRs as a medical device).

Providing content with applications does save the community hospital a lot of work. However, the content changes as payer contracts, optimal treatments, data code sets (e.g., ICD-10), clinical pathways and medical advances (e.g., genomics) occur. The community hospital must ensure that its content stays current, and it must understand changes in content since these often lead to changes in clinical practice and revenue cycle operations.

Model implementations can be, for some organizations, too rigid. The organization may legitimately have processes that are different from other hospitals, and it may have stakeholders who want to be engaged intimately in a wide range of decisions.

And all organizations need to remember that IT is a tool; real transformation requires leadership, thoughtful process change and good management. The electronic health record, cloud-based or not, does not provide these skills. The hard work of making care better, although now using a powerful tool, remains hard work.

Community hospitals are the backbone of care delivery in this country. While various federal programs are intended to help them, they still face significant challenges in responding to imperatives to improve care quality, safety and efficiency. For many years health care information technology has been out of the reach of these organizations and, hence, was not available to help them address these challenges.

Fortunately, these organizations now can take advantage of the same information technology as their larger cousins. The community hospital still has work to do to ensure that the technology is used effectively, but it is up to the challenge.

The bottom line is that HIT systems are good for providers — large and small. And having HIT is good for patients, too.

John Glaser, Ph.D., is the CEO of Siemens Health Services in Malvern, Pa. He is also a regular contributor to H&HN Daily.