Neighbors Caring for Neighbors: Rural Healthcare with Michael Topchik and Letitia Fecher

[00:01:15] David Shifrin: Michael and Letitia, thanks for your time this afternoon.

As we were thinking about the outline for the conversation, our audience is well aware of the challenges facing rural providers. It’s no secret. The challenges and the pressures on rural healthcare have been just increasing for years. So rather than spending a bunch of time giving the context and repeating the headlines about what’s going on, I want to jump in with some really practical, actionable advice upfront.

If you’re talking to the CEO or the leadership team of a rural facility or a community hospital, what are the one or two questions that they should be asking today?

And so Michael, I’ll turn to you for that and then kick it over to Letitia.

[00:01:59] Michael Topchik: Sure, thanks for that. It’s a challenging question. I was going to go solve world peace a little earlier, and I decided to tackle this first. The bottom line in many respects really goes beyond the bottom line. So, we can talk about hospitals operating in the red, hospitals operating with deficiencies of staff, hospitals struggling to operate hospitals, or shedding service lines. I really don’t think it’s about operations. Those operational challenges, they’re here, they have been exacerbated. I think about the big strategic challenges rural hospital executives face. It reminds me of the old Ford ads in the seventies when they were just getting their butts handed to them by the Japanese and the Germans, when they said quality is job one.

I really think they need to focus on their mission. They need to focus on the fact that they serve a community in need, a community with unmet needs, a community that is underserved. These are mission-driven organizations, I think most healthcare organizations are, but nowhere is that more apparent than in rural America where rural hospital executives and their teams are really doing God’s work. It’s oftentimes through faith-based organizations and they are seeking to fulfill a mission to provide healthcare, quality healthcare.

I think we can talk about quality in maybe just a couple dimensions briefly. If I’m an executive and I’m talking to my board, or if I’m an executive and I’m talking to a patient or my community, I think I want to talk about the fact that we are going to have the highest standards for processes of care. Rural hospitals can and do, when we measure and benchmark their performance, reach the very highest standards of care. But when grandma goes to the hospital, we may not be as interested as a family in the processes that grandma saw, but more in the outcomes she saw. And so, did grandma have a safe experience? Was her experience one where the outcome was such that she got better and was not readmitted? Moreover, was she delighted? And we can measure all of these. And so, as a hospital executive, I want my board and my community to be looking at my rural hospital and comparing our experience to the top decile or two in terms of benchmarks for quality around the nation. So as a rural hospital, am I an A+ student in all of these dimensions of quality? That’s the mission, that’s the focus.

[00:04:45] Letitia Fecher: And I’ll jump off from there. Michael, I think you know, when we are thinking about what quality means to our patients and their families, it means a good experience. It doesn’t necessarily mean the top quartile of quality based on all of these ratings agencies, to them it means how was I treated, and did I get value and get the care that I needed in the time that I needed it.

So, to use that as a jumping off point, a couple of the questions I would ask the CEO to ask their board and their leadership team is, how have we improved that access to care? And what can we do to be better? Are we making it actually easy on our patients and their families and our consumers to access care? Are we removing barriers? As rural healthcare providers in most rural areas, there isn’t a ton of competition. These are the healthcare providers that are the only options for their communities. So, what are we doing to make sure that access to care is easy for them? And then also thinking about it from our internal teams’ perspective, because at the end of the day too, the quality of care is relevant on the people that are providing the care to them. So, what are we doing for our teams to make this place a great place for them to work and to come to work every day, for them to do their best work? So again, what barriers are we removing or what tools and resources are we providing so our team members, our physicians, our APPs, our employees, our clinicians can do their best work?

[00:06:28] Michael Topchik: I’m really glad you brought up that last point in particular, Letitia. The idea of serving the community ‑- in rural hospitals, we’re really talking about neighbors taking care of neighbors. We want to make our mission-focused organization externally facing and we want to do the best job vis-a-vis quality and patient satisfaction and all of these measurable and demonstrable outcomes. But I think our own people need to be a priority. You put a fine point on that, and I really appreciate you saying that because there’s an old expression: no margin, no mission, right? But look if you don’t have a staff that’s healthy and happy and can really pull in the same direction, you’re not going to be able to meet your mission either, right? So, you make a really good point there.

[00:07:17] David Shifrin: Okay so we’ve sort of anchored the conversation in the fact that healthcare is always local. It’s always personal and so if we’re focused on what’s right there in front of us, we can make some pretty big strides in fulfilling that mission.

At the same time, there are those external forces that range from the local level all the way up to the federal and sort of macroeconomics, and those are also unavoidable. We’re operating and communicating within sort of the environment created by those forces. So, let’s look at kind of three areas within that. I want to start at the highest level: policy and regulation. A lot going on there. The Rural Emergency Hospital rule for conversions has come into play. We’re starting to see hospitals explore that. Also been so much around Medicaid enrollment and reimbursement.

What are you both seeing when it comes to sort of those federal level policies and how that’s playing out kind of day-to-day with rural providers? Letitia let’s go to you first on this one.

[00:08:30] Letitia Fecher: I’d love to hear Michael’s perspective on this too, because I know he does a ton of work here, especially with the rural healthcare initiative that he’s been working on for quite some time. But I think that what we see a lot of most recently is how are our rural healthcare providers getting paid.

So that means, commercial of course and government payers it feels like every state is battling this in different ways. From Medicaid expansion to getting additional funds coming out of Covid and paying back those funds. Also getting more support from their state associations or if you are a publicly owned hospital what kind of support do you get from your communities. And I think, one thing that we are really just noticing is the disparate ways that we are going about this. I feel pretty passionately about how can we bring these rural healthcare providers together to amplify their voice towards a common mission. Knowing that they’re also working in our part of state associations that span from academic medical organizations to very large non-for-profit health systems, down to these very small rural healthcare providers. The state associations can’t advocate for all of those things.

So how can we advocate for ourselves? And I don’t necessarily have the answer to that question, but I know that it’s a need and I know that I’ve heard it from my clients as well that they feel like they have a small voice. How can we figure out a way to amplify that so we can be providing the care that we need in our rural communities through additional funding sources, through unique partnerships? How can we get support from our local and state legislators to do that?

[00:10:31] Michael Topchik: The question hits one of the nails right on the head because when we just recently did some research that we published we asked hundreds of CEOs what was top of mind, and of course no one would be surprised that workforce was number one.

But right up there were issues of reimbursement and policy around reimbursement and the uncertainty of that policy. There are a number of really important governmental reimbursements systems that rural hospitals rely upon. Let’s just set the stage. 70 to 80 percent of a rural hospital’s reimbursements are likely governmental. And when we think about their urban counterparts, that’s inverted. Where it’s commercial and 20 to 30 percent might be governmental. So, between Medicare and Medicaid policies that affect payment for rural hospitals, ergo ipso facto are going to have a disproportionate impact on rural hospitals and they do.

One of those really important examples is the critical access hospital program. And David you referenced the REH, the Rural Emergency Hospital program, and we’ll take a minute to talk about that. Of the nation’s, 2,200 roughly rural hospitals more than 1,300 have converted to critical access hospitals status, where they are reimbursed on a cost basis. But that cost basis that is 101% of allowable costs was meant to keep them afloat, to keep them solvent. Most consultants at the inception of that program agreed that the reimbursement, with exceptions, etc., was someplace around 98 to 99 percent. That’s, that’s down to like 90 to 92 percent. We can point to a number of specific policies that are really probably unintended, but the sequester was one of them which is a 2 percent cut across Medicare payments across the board. It affects all hospitals and anyone receiving Medicare payments. The bad debt allowances have been cut by a third and anything with bad debt is going to disproportionately affect rural hospitals. The sequester, a cut to Medicare of 2 percent is disproportionately affecting rural hospitals because they see more older patients and they see more poorer patients.

So, the reality is that this system that was put in place purposefully to support these rural hospitals has been unraveling for more than a decade and we’ve seen the evidence of this in declining margins. More and more of them are operating in the red. We’ve seen it with closures — we just lost the last rural hospital yesterday. We’re now up to 153 rural hospitals that have closed since we’ve been tracking this, just over a little more than 10 years. We’ve seen it through the loss of service lines, like OB and chemotherapy services.

So rural hospitals have been really suffering. It’s been understood and well known — Congress finally was able to put something together in the omnibus legislation this last year. The REH designation, the Rural Emergency Hospital designation, was launched to basically recognize the problem and the problem is low volumes. And so, we’ve got incredibly small hospitals with incredibly low volumes who are largely seeing outpatient patients today. It basically recognized that and said let’s recognize that hospital for what it does, and let’s value it for what it does, which is it serves to keep open a 24/7 emergency department to meet all of that community’s vital outpatient needs. We’ll forego that inpatient service and we’ll come up with a new payment reform or a new payment mechanism to support that. So, I think you can’t talk about care delivery reform without talking about payment reform. And so, this is one of the first major legislative steps since the advent of the critical access hospital to tackle that. We’re interested to follow that, but reimbursement is a real problem. In the absence of some really vital needed reform in payment and reimbursement, we will continue to see the backsliding of the safety net. We will continue to see hospitals close. We will continue to see service lines close.

[00:14:58] David Shifrin: So you’ve got to really look at what is necessary, what is sustainable, not “what do we want? What have we had historically? What is the thing that, we’re going to take pride in as a community?” but how do we build something that is sustainable and take pride in that and support our community and support our caregivers.

I guess almost philosophically, how do you both advise leaders to take that clear-eyed look, to be able to step back from what we, what our ideal state might be and say, this is what we’re working with today and this is what we can do.

[00:15:35] Michael Topchik: I really do think that we who are in rural healthcare, we’re the single most important pillar in a rural community. Maybe you could say education and government are right there as the other big two pillars. And so, I think it starts with a really good understanding of what are the unmet needs of the community? We can take a good hard look using that process to sort of have an inventory of what we do today.

I’ll give you an example: behavioral health is high on everybody’s list. It is an area of huge need across every corner of America and nowhere is that more exacerbated than in rural America. But how are we going to do it? We could see a need, we could see an unmet need, and then we can begin to strategize about a preferred future. So, I love the idea, Letitia, of communicating how it is we are going to be tackling bringing new services in to a community.

At the same time, there are clearly needs like maternal healthcare, that every rural community faces and has. It may be challenging for us to maintain those services. We’ve seen the data that are just showing the slipping and sliding and the erosion of the provision of maternal healthcare across rural America. And so, Letitia, the idea then of a service line that we currently have that we have to make a really difficult strategic and operational decision to potentially let go or to potentially partner to provide. Again, I think both of those examples, one is a preferred future and one is a challenging area of communication to board and community members and staff of something that perhaps is changing and we may no longer be able to support it for a variety of reasons.

[00:17:42] Letitia Fecher: Yeah. Thank you for that because I think it, it also lends the question about what are we talking about before we’re talking about making any kind of change to a service line, closing, temporarily closing, or cutting down on hours or the services themselves?

None of these things should be the very first message that our community or our employees hear about the financial viability or the operational viability of our organization. We should already be talking about how our rural healthcare organization is transitioning from the way we provided care ten, fifteen, even five years ago, to what the community needs today. Michael, like you were saying, we need to do a real assessment of what our community needs today. And that might not be, honestly, OB services anymore. We may not be delivering babies at the rate that we did before because the community just doesn’t have that type of demographic anymore. Which, of course, it’s a service that we never want to close but we do need to look at the quality and the standards of care when it comes to providing all of these services.

But back to my initial remark here, we should be talking about how we are transitioning our care to what our community needs today. It might not look the same, it might look a little bit different, but we know that our community expects something different from us. Whether that means that is more outpatient services, more clinics and less of the in-hospital type of services. It might be more telehealth, it might be partnering with a behavioral health organization to provide those services because they are the providers who know that type of service best and we don’t have the ability to maintain that level of care and service. So, talking about those types of shifts in healthcare and how we’re providing care today, and not letting the one standalone message be that we’re closing a service. It needs to have some sort of bedrock onto what we’re focused on.

That is to make sure that we’re here for generations to come, to continue to provide healthcare. And again, that might look different, but we want to be here for the long term and talking about that throughout all of these changes or closures or transitions. In really explaining this and putting it into context for individuals, I see the last few service line closures that I did had really nothing to do with quality or volumes. It had more to do with provider shortages. We just didn’t have the specialist, or we lost one specialist in our oncology services. And so, we had to cut the services almost immediately because losing one provider in a rural healthcare environment can be very detrimental to that service line and the patients that need that service.

[00:20:55] David Shifrin: Any silver linings when it comes to workforce? Where do we go from here?

[00:21:00] Letitia Fecher: To me it’s all about retention. In a rural healthcare environment, most of these employees that work in rural healthcare facilities have been there for a very long time. They live in that community. They were most likely born in that community. They probably have generations within their family who live there, who work at the hospital or other healthcare facilities within the health system as well. And so, to me, it all comes down to retaining our workforce, doing what we need to do to ensure that they like to come to work every day. That we’re not asking them to do more than what we need them to be doing to provide great care. At the end of the day, it’s all about building a great culture and making sure that the place that these people choose to work every single day is rewarding in that they’re doing the work that they feel like they were meant to do.

[00:21:58] Michael Topchik: When we surveyed and asked questions about this recently there, there was a run on nursing. At every week in the supermarket there was a run on a different product. Do you remember? And it’s really this supply chain problem. Nursing became commoditized and fell into this kind of supply chain model of the traveling nursing industry poaching nurses from all over America, all over the world, but really, they poached a ton from rural hospitals. So, when we asked executives, they told us that the number one reason they lost nurses was because they went to a traveling nursing position.

The other thing CEOs told us was that they were leaving their rural positions. And Letitia, you said it exactly the way they say it to me, which is that these are homegrown nurses. They’re from the community. They live there and they love to work where they live. And they’re rural, so their commutes are already probably 20 or 30 minutes. But they’re willing to go do that hour commute because larger urban facilities, were willing to give them $10,000-$25,000 sign-on bonuses and double their salaries in some cases. So, how can you not make that hour commute? Then many were burned out and were just taking early retirement. But those first two were what we saw in this research, in the comments that we’ve heard from executive leadership roundtables that we’ve hosted in the last several months, echoes everything you just said, Letitia, which is retention.

Several CEOs said we attempted to do sign-on bonuses, but what that did was actually alienate our existing work staff. They then decided to instead focus any type of financial benefit, any type of financial payouts to retaining staff. And that has not been a silver bullet, David but it has been what we’re hearing more and more. Everyone’s coming to that same realization is that you can’t get into this arms race with a larger urban hospital in terms of what you’re going to pay and sign-on bonuses, and all of this kind of stuff. You’ve got to focus on keeping your current staff happy and healthy. Really recognizing them even when it’s not always cashed, right? Sometimes it’s just really spending the time to round with them, to recognize them, to include them, to communicate with them. I think that’s a lot of what Letitia was just talking about.

[00:24:33] David Shifrin: I love that, and I’ll put a plug in for our second national nurse survey, which will be out right around the time that we publish this podcast. It looks at a lot of practical things when it comes to onboarding and retention from nurses.

So, we’ve got just a couple of minutes left here and I asked the question at the beginning, what’s the one question a rural healthcare leader should be asking. I’ll close with the question, what’s the one thing in light of the discussion that we’ve just had that a rural CEO should do today?

[00:25:08] Michael Topchik: I’ll continue to suggest that the focus on the mission, in light of the challenge around margin and around staffing, in particular has to be job one. And so really providing the highest quality of care for the services that we do maintain with the best safety, the best outcomes, the best patient satisfaction, it has to be the absolute focus.

Having said that, I think community engagement and staff engagement has to be top of the list. I think Letitia, you really brought up the point. We don’t want these conversations to be out of the blue. It should be on ongoing dialogue. And so that, with that engagement, I’ll call it upstream and downstream for a better lack of a term. Make sure that everyone’s aware of the challenges we’re facing around operations and how we’re striving to meet unmet needs. Particularly when we build out new services because I do believe rural hospitals, even in challenging environments, can always create a preferred vision for the future. And they can in fact, launch new services even while other vital services may have to be winnowed just due to various pressures of staffing and such.

I think the one thing I would suggest is focus on the mission and communicate both up and down to your various constituencies, community, as well as staff, the board, et cetera.

[00:26:40] David Shifrin: Great. Thanks Michael. Letitia, last word to you.

[00:26:44] Letitia Fecher: Yeah, Michael and I are aligned on this. We need to make sure that we’re talking about what we’re doing today to ensure that we remain viable for our communities. Also, as an employer and provider of choice, engaging with our staff, engaging with our providers, opening up that two-way dialogue that makes any kind of change or announcement much more palatable if people feel informed and part of this process about where the health system is today and where it’s going. Not all of these changes or announcements are necessarily negative. It’s also can be about the positive. What are the positive things that we’re doing, the positive improvements that we’re making thanks to the team, making sure that we’re thanking our team members for the great work that they’re doing.

That’s how we’re able to provide care every day is because of our teams. It’s not enough to make an announcement when all decisions are made. We need to be talking about it even when we don’t have all the answers, if we expect for our community and our employees to, to have that level of trust in us. Trust is earned and we need to make sure that we’re doing that every single day with our employees, with our physicians, with our APPs in our community.

[00:27:59] David Shifrin: Thanks to both of you once again for your time and look forward to getting this conversation out there and look forward to hearing from you on stage, I guess just in a few weeks.

[00:28:09] Michael Topchik: Yeah, sounds good.

[00:28:10] Letitia Fecher: Thank you, David. Thanks, Michael.

[00:28:12] Michael Topchik: Thanks Letitia.