CareSource, a Georgia-based managed care plan, recently created a Rural Access Advancement Program (RAAP) to assist rural hospitals and hospital-owned skilled nursing home facilities in rural Georgia address cash deficits that might otherwise lead to service limitations or hospital closures.
Taylor Health Care Group in Cochran, Ga., used $750,000 in emergency funding from the program for critical vendor payments to maintain the operational integrity of Taylor Regional Hospital. In a recent interview with Healthcare Innovation, Jon Green, CEO of two-hospital Taylor Healthcare Group, and Jason Bearden, president of CareSource Georgia, spoke about the dire state of rural healthcare in the Southeast and the goals of the new program.
Healthcare Innovation: Before we talk about the Rural Access Advancement Program, Jason, could you describe CareSource?
Bearden: CareSource is the only nonprofit Medicaid managed care plan in Georgia, which I think is a defining characteristic. We cover 440,000 individuals across the state, in all 159 counties. That’s 400,000 Medicaid and just shy of 40,000 Marketplace members.
HCI: We know that rural hospitals across the U.S. are struggling. Could you talk about the situation in the Southeast and Georgia in particular?
Bearden: We rank third in the nation for 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 staved off during the COVID period, but things are getting a little uneasy again. Some of the funding sources have dried up, and we’re seeing some instability. So we’re hoping that this little bit that we can do through this partnership will really facilitate stabilization of that rural hospital ecosystem, and hopefully we will get out of that third-highest nation hospital closure rate.
HCI: What happens in a small, rural community when the local hospital closes?
Bearden: The most obvious impact is the access issues that we see. Many of our rural hospitals over the last 20 years have opened up OB/GYN units where moms could stay in their communities and have their child in their communities. When that hospital ends up shutting their doors, we see those OB/GYN units dry up because those are loss leaders. In many cases, we see emergent 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 more painful outcomes of hospital closures are economic in nature. We see hospitals certainly being economic engines in rural Georgia, and when the hospital dies, it’s tough to recruit businesses and jobs dry up, and the community withers. It is a death spiral, of sorts, economically because of that hospital being unable to keep its doors open.
HCI: How did the idea for the Rural Access Advancement Program develop?
Bearden: This really is a byproduct of our nonprofit status and nature. We can do things that our for-profit counterparts might not be able to do. This was an idea born out of a partnership with Hometown Health, a network of approximately 40 rural hospitals in Georgia, of which Jon is a member. Their executive director told me that a lot of times they have cash crunches at some of their smaller hospitals, between capital campaigns or between funding sources coming from the federal government or the state government. They’re going to get those funding sources from the bank or the feds or the state, but it’s just a time window gap.
HCI: Jon, could you talk about the the situation that Taylor found itself in, so that something like this program would prove valuable?
Green: With COVID, labor and supply costs, everything just went significantly higher. You can still do the same level of business, and it just costs a lot more to do it. So that’s where a lot of rural hospitals are finding themselves. I had the very fortunate circumstance of getting to know Jason pretty well. We started brainstorming on how we could figure out a way to help, at least in small interim areas, to stabilize the hospitals when they get into a situation where they’re faced with potentially door-closing issues.
We had to make sure that we made payroll, because sometimes our commercial payments come in slower. After we provide the services, we’re up-fronting a lot of cost in rural medicine. I think we made this arrangement in two days or something like that, and got us what we needed, and that helped us along for a few months.
I’ve been in healthcare for nearly 30 years now, and I don’t know if I’ve ever had a payer come with a solution like this. This program is helping not only Taylor Regional, but can help other hospitals across the state. 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 in similar situations.
HCI: In other states, we have seen examples of smaller community hospitals and rural hospitals getting purchased or becoming affiliates of large, integrated health systems such as academic medical centers. Is that a possibility for some of these smaller hospitals in Georgia?
Bearden: Over the last five years, the big systems have acquired some of these smaller hospitals and absorbed them — not just the hospital, but the physician practices.
HCI: Jon, do you see more hospitals like yours going that route?
Green: I honestly do. I think that unless something different happens, that’s probably the path that most hospitals will have to take within the next five years. We do not have the negotiation power with contracts like larger systems do. We could still remain Taylor as part of a bigger system, but roll under their ability to negotiate contracts because of the sheer volume that they provide.
HCI: A few years ago HHS launched something called a Rural Emergency Hospital designation, which I think required hospitals to give up their acute care beds, but they would remain open as emergency facilities. I understand that not very many hospitals took them up on that. Did you look at that?
Green: Do you know, we actually did look at it. We applied just to see what it looked like, and then we decided to pull back. You lose all your inpatient beds, right? You can still have observation beds, but you lose ICU beds. Anyone healthcare 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 almost cannot find an ICU bed to transfer a patient to. So you’re taking the most critical and most difficult-to-find bed away. This program looked it would start to take revenue away from an already-strained system.
HCI: Jason, anything else you want to add?
Bearden: It’s really a health equity issue for us around access. When you look at rural vs. urban, the access really breaks down when you get out into the southern and northern parts of Georgia, outside the metro area. We don’t directly benefit in any way financially from this program, but the people we serve do. We care about the people we serve, and we put people first. And people we serve are certainly our members, but it’s people like Jon, too, because Jon serves a vital role in his community, not only providing his community with high-quality services, but being an employer of note. Again, as much as this is about healthcare access, it’s also about employment. The hospital is an economic engine in that rural community, and that is vital to our state’s vitality long-term.
