News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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One idea proving attractive to health policymakers is putting a hybrid model into rural towns that includes a freestanding emergency department and primary care

Times are tough for rural hospitals and officials in many states are looking at new models for healthcare delivery in rural areas. Anatomic pathology groups with contracts to serve rural hospitals will be affected by any changes in how rural hospitals are funded and operated.

One suggested approach to replace the existing community hospital model for rural area is called a hybrid model. It is based on freestanding emergency departments (FSED) that have links to primary care providers. Such a care model would challenge clinical laboratories in the region to provide necessary medical laboratory testing to the freestanding EDs in rural communities.

Rural Hospital Closures Could Jeopardize Local Access to Emergency Care

This problem is linked to the deteriorating finances of many rural hospitals.

There is a growing number of closures of rural hospitals built during the era of Hill-Burton financing, according to a story published in Modern Healthcare (MH). In many communities, the rural hospital is likely to be the sole provider of outpatient surgery, radiology, and clinical laboratory services. That has some observers concerned.

Generally, rural hospitals grew out of a 1946 Congressional Initiative. The objective was to build not-for-profit and public hospitals and other healthcare facilities to serve rural populations. The Hospital Survey and Construction Act, or “Hill-Burton Act,” expanded the nation’s supply of hospitals by almost 34%.

Many of these facilities have become antiquated. Since 2013, over 24 financially struggling rural hospitals have closed across the nation, MH reported. Multiple financial pressures are fueling the closures. They include:

• Unemployment in the community,
• High rates of uninsured and underinsured patients, and
• Declining reimbursements from government payers.

The decision of 23 states to not expand Medicaid also has had a negative impact on the finances of rural hospitals. “[A]s the Medicaid expansion is limited to only half the states, many rural providers will still shoulder a disproportionate cost burden compared with urban physicians,” stated Anne C. Kirchhoff, Ph.D., Assistant Professor of Pediatrics at the University of Utah, in a National Rural Health Association press release last year.

States Seek New Ways to Provide Access to Healthcare in Rural Areas

In the past two years, a total of four rural hospitals have closed in Georgia. That means emergency or inpatient care could be miles away for people needing services. This could mean the difference between life and death in cases such as cardiac arrest or serious injury.

In some areas, struggling rural hospitals are looking to larger, stronger health systems to absorb them, the MH article noted. But, many lack the strong quality metrics that would make them attractive partners for larger systems.

Observers worry that rural hospital closures could jeopardize local access to essential care for rural populations. However, according to one expert, the prognosis for rural access need not be dire. “If you have a mindset, ‘We have to have a hospital, we’ve got to have inpatient care,’ that’s where I think everyone gets hung up,” stated Jeff Hoffman, Senior Healthcare Partner at consultancy Kurt Salmon, in the MH story. “Instead, we need local access to emergency care, to diagnostic and treatment care, and we need access to specialists through some linkage.”

In response to the closures in Georgia, Governor Nathan Deal has proffered a solution that might serve as a model for the rest of the nation, the MH piece stated. A proposed regulatory change would allow Georgia’s struggling rural hospitals to offer fewer inpatient services, but still keep their hospital licenses. Essentially, the facilities would become FSEDs that also offer other basic services, such as labor and delivery.

Meanwhile, North Carolina is exploring another innovation. In 2012, Charlotte-based Carolinas HealthCare System (CHC) overhauled a Hill-Burton facility in Anson, population 5,800. CHC has $4.7 billion in annual revenue. It invested $20 million into Anson Community Hospital. The facility had 125 staffed acute-care and nursing beds. CHC downsized inpatient capacity from 30 beds to 15.

The new facility now offers 24/7 emergency care and a limited number of acute beds. The project’s major innovation and attraction is that it uses a patient-centered medical home (PCMH) model, the MH story pointed out. Through a patient navigator it offers residents access to primary-care providers.

Ira S. Moscovice, Ph.D

At the University of Minnesota, Ira S. Moscovice, Ph.D. (pictured above), is a Professor of Health Policy and Director of UM’s Rural Health Research Center. He advocates having primary care providers in rural communities so local residents don’t have to travel long distances. The unanswered question is, if more rural hospitals are closed and replaced by freestanding emergency departments and primary care providers, how will adequate medical laboratory services be provided to the healthcare providers in these isolated communities? (Photo copyright the Rural Assistance Center.)


“What it really boils down to is, we need access to primary care in those communities,” stated Ira S. Moscovice, Ph.D., in the MH story. Moscovice is Professor of Health Policy at the University of Minnesota and Director of the Rural Health Research Center at UM.

Freestanding EDs Could Find Favor in Rural Areas

In 2009, there were approximately 200 FSEDs, nationwide. Today, according to Kaiser Health News there are more than 400. Many of these new facilities are currently locating in suburban areas and funnel patients to the parent hospital.

It is the rapid growth in the number of freestanding emergency departments in developed areas that lead some observers to see a hybrid of the suburban FSED model that mixes lower-level emergency care with primary-care services as a potential solution for rural and underserved areas. Alan Ayers is Vice President of Corporate Development for Concentra Urgent Care, Humana’s (NYSE:HUM) urgent-care subsidiary. To be sustainable, Ayers said in the MH story, providers will have to adapt the model operationally.

Providing Clinical Laboratory Testing to Rural Communities

One question that has yet to be asked and answered as health policy experts explore the hybrid model of FSED with primary care as a way to deliver health services in rural communities is: Who will provide clinical laboratory testing services and how will such services be delivered in rural communities? Rural hospitals currently serve a mix of inpatients and outpatients that is enough to generate the volume of patient specimens required to make the hospital laboratory financially viable.

Should it be decided that the hybrid of freestanding emergency department and primary care is a way to keep healthcare services in a rural community that is losing its hospital, planners will face the problem of an adequate source of clinical laboratory testing. It will be a difficult challenge to solve the twin problem of economics and logistics in the provision of the required menu of accurate and timely medical laboratory tests to the providers delivering care in rural communities.

—Pamela Scherer McLeod

Related Information:

A Limited-Service Rural Hospital Model: The Freestanding Emergency Department 

As Freestanding ERs’ Business Grows, So Does Backlash

When the Tiny Hospital Can’t Survive: Freestanding EDs with Primary Care Seen as New Rural Model 

Thinking Outside the Hospital Box: Freestanding Emergency Facilities

Freestanding Emergency Rooms: A New Type of Healthcare Facility

2013 National Rural Emergency Department Study