CareSource, a Georgia-based managed care plan, recently created a Rural Access Promotion Program (RAAP) to help rural hospitals and hospital-owned skilled nursing facilities in rural Georgia address cash shortfalls that could otherwise lead to service limitations or hospital closures.
Taylor Health Care Group in Cochran, Georgia, used $750,000 in emergency program funds for payments to critical providers to maintain the operational integrity of Taylor Regional Hospital. In a recent interview with Innovation in health care, Jon Green, CEO of Taylor Healthcare Group, a two-hospital group, and Jason Bearden, president of CareSource Georgia, spoke about the dire state of rural health care in the Southeast and the goals of the new program.
Healthcare Innovation: Before we talk about the Rural Access Promotion Program, Jason, could you describe CareSource?
Bearded: CareSource is the only nonprofit Medicaid managed care plan in Georgia, which I think is a defining characteristic. We cover 440,000 people statewide, in all 159 counties. That’s 400,000 Medicaid members and almost 40,000 Health Insurance Marketplace members.
HCI: We know that rural hospitals across the United States are struggling. Can you tell us about the situation in the Southeast and Georgia in particular?
Bearded: We rank third in the country in hospital closures. Rural hospitals are incredibly important to our communities. We have a vested interest in seeing those rural hospitals stay open. Those closures were avoided during the COVID period, but things are getting a little unsettled again. Some of the funding sources have dried up, and we’re seeing some instability. So we’re hoping that this small contribution that we can make through this partnership will really facilitate the stabilization of that rural hospital ecosystem, and hopefully we can get out of that third-highest rate of hospital closures in the country.
HCI: What happens in a small rural community when the local hospital closes?
Bearded: The most obvious impact is the access issues that we see. Many of our rural hospitals over the last 20 years have opened OB/GYN units where mothers can stay in their communities and have their children in their communities. When that hospital ends up closing its doors, we see those OB/GYN units dry up because they are loss-leading products. In many cases, we see emergency services that are necessary for triage and stabilization dry up. Those are some of the most obvious access to care issues. But I think some of the most painful outcomes of hospital closures are economic in nature. We see that hospitals are certainly economic engines in rural Georgia, and when the hospital dies, it’s hard to recruit businesses and jobs dry up, and the community withers away. It’s kind of a death spiral, economically, because that hospital is unable to keep its doors open.
HCI: How did the idea of the Rural Access Promotion Program come about?
Bearded: This is actually a byproduct of our nonprofit nature and status. We can do things that our for-profit counterparts may not be able to do. This was an idea that was born out of a partnership with Hometown Health, a network of about 40 rural hospitals in Georgia, of which Jon is a member. Their CEO told me that they often have cash flow issues at some of their smaller hospitals, between capital campaigns or between funding sources coming in from the federal government or the state government. They will get those funding sources from the bank, the feds, or the state, but it’s just a time gap.
HCI: Jon, could you talk about the situation Taylor was in that made something like this program valuable?
Green: With COVID, labor costs and supply costs, everything has skyrocketed significantly. You can still do the same level of business, but it costs a lot more to do so. So that’s where a lot of rural hospitals are. I had the very fortunate circumstance of getting to know Jason quite well. We started thinking about how we could find a way to help, at least in small, interim areas, stabilize hospitals when they’re in a situation where they’re facing issues that may cause them to close their doors.
We had to make sure we made payroll, because sometimes commercial payments are slower. After we provided the services, we took on a lot of rural medicine costs. I think we got this deal done in two days or so and got what we needed, which helped us for a few months.
I’ve been in healthcare for almost 30 years and I don’t know if a payer has ever offered me a solution like this. This program not only helps Taylor Regional, but it can help other hospitals in the state as well. We put out a press release about this at the state capitol and it was well received. I started getting calls the next day or two and started putting them in touch with CareSource to help them with similar situations.
HCI: In other states, we have seen examples of smaller community hospitals and rural hospitals that have been acquired by or become subsidiaries of large integrated health systems, such as academic medical centers. Is that a possibility for some of these smaller hospitals in Georgia?
Bearded: Over the last five years, large systems have acquired some of these smaller hospitals and taken over not only the hospital but also the physician offices.
HCI: Jon, do you think more hospitals like yours will follow this path?
Green: I honestly think so. I think unless something different happens, that’s probably going to be the path that most hospitals are going to have to take over the next five years. We don’t have the bargaining power with contracts that the larger systems have. We could still be Taylor as part of a larger system, but rely on their ability to negotiate contracts because of the sheer volume that they provide.
HCI: A few years ago, the Department of Health and Human Services (HHS) launched an initiative called Rural Emergency Hospital, which I believe required hospitals to give up their intensive care beds but remain open as emergency facilities. My understanding is that not many hospitals took up that initiative. Have you looked into that possibility?
Green: You know, we actually looked at it. We applied for it just to see what it was like and then we decided to back off. You lose all the inpatient beds, right? You can still have observation beds, but you lose ICU beds. Any health care professional will tell you this: you have to have transfer agreements with other hospitals. Even now, with the very small number of rural emergency hospitals in the state, you can hardly find an ICU bed to transfer a patient to. So you’re taking away the most critical, hardest-to-find bed. This program seemed like it would start to take revenue away from a system that was already overburdened.
HCI: Jason, anything else you’d like to add?
Bearded: For us, access to health care is an equity issue. If we compare rural areas to urban areas, access is greatly affected when we go to the areas of southern and northern Georgia outside of the metro area. We don’t directly benefit from this program financially, but the people we serve do. We care about the people we serve and we put them first. And the people we serve are certainly our members, but they’re also people like Jon, because Jon plays a vital role in his community, not only by providing high-quality services, but also by being a leading employer. Again, while it’s as much about access to health care, it’s also about employment. The hospital is an economic driver in that rural community, and that’s vital to the long-term vitality of our state.
