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People living in rural America have lower incomes, less education, and are in poorer health than those living in other areas of the United States. For more than a century, these measures have been “sticky” with little change despite many efforts to do so.
It is also well-known that most rural areas have a shortage of primary care and specialist physicians and lack of hospital capacity. Since 2010, 138 rural hospitals have closed, leaving approximately 2,300 rural hospitals currently open in the US. Many others are financially distressed. In 2016, 39 percent of rural hospitals had a negative operating margin, increasing to 46 percent in 2020. Inpatient admissions and occupancy rates continue to fall, serving as leading indicators of future closures.
Accountable care organizations (ACOs) and value-based payment reforms targeted to rural hospitals, while necessary, are insufficient to address the underlying challenges of rural health care delivery and improving the health of people living in rural America. A much broader cross-sector approach that addresses the underlying health needs of rural Americans will be needed. The Centers for Medicare and Medicaid Services (CMS) Community Health Access and Rural Transformation (CHART) model and the Accountable Health Communities model are steps in the right direction but do not go far enough. We propose to the Department of Health and Human Services (HHS), CMS, and the private sector the development of Rural Community Health Improvement Systems (RCHIS). In this blog post, we first briefly review the evidence on rural hospital involvement and performance in ACOs. We then suggest a new approach, outlining the main components of the RCHIS and what CMS and others can do to support their development.