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Economics and Rural Healthcare

Economics and Rural Healthcare . Tim Putnam, DHA, FACHE CEO Margaret Mary Community Hospital, Batesville, Indiana. Economic Impact of Indiana’s Community Hospitals. Rushville 230 Direct Jobs 370 Jobs total $20 Million in payroll (Direct and Indirect)

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Economics and Rural Healthcare

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  1. Economics and Rural Healthcare Tim Putnam, DHA, FACHE CEO Margaret Mary Community Hospital, Batesville, Indiana

  2. Economic Impact of Indiana’s Community Hospitals Rushville 230 Direct Jobs 370 Jobs total $20 Million in payroll (Direct and Indirect) $7 Million in other/non-payroll spending Total Annual Economic Impact from the Hospital (all direct and indirect impact) $33,192,217

  3. Impact on Rural Communities Community Total Jobs Impact of Jobs • Salem 334 $25 Million • Winchester 316 $22 Million • Linton 354 $23 Million • Winamac 278 $18 Million • Tell City 387 $24 Million • Greencastle 405 $29 Million • Wabash 449 $33 Million • Angola 486 $31 Million • Rochester 556 $34 Million • Crawfordsville 541 $47 Million

  4. Larger Communities Community Jobs Job Impact • New Castle 800 $58 Million • Washington 509 $41 Million • Logansport 815 $58 Million • Franklin 926 $68 Million • Madison 1,294 $103Million • Marion 1,314 $101 Million • Jasper 1,770 $123 Million • Vincennes 2,194 $149 Million • Valparaiso 2,301 $154 Million • Richmond 2,746 $168 Million

  5. Healthcare Economics • Cost Shifting Issues • Medicare Patients (4 – 20%) loss • 40 – 50% of Patients • Medicaid 35+% loss, • 8%-15% of Patients • Charity and Bad Debt 100% loss, • 5 – 10% of Patients • Remainder are Commercially Insured

  6. Small CommunityHospital with $10 million in Operating Expenses

  7. Rural Specific Economics • Programs like Cardiac Surgery and Angioplasty are profitable (rarely performed in small community hospitals) • Generally older patient population with a greater percentage of Medicare (per capita income is $7,417 lower than urban) • Urban hospitals are paid at a higher rate by Medicare due to “Market Basket Adjustment” • Must care for whole population (No institution to care for uninsured and Medicaid)

  8. Rural Healthcare • Rural residents: • Use tobacco, alcohol more frequently • Have higher rates of Hypertension and Cardiovascular Disease • Have higher rates of Suicide • Higher death rates due to Trauma • More frequently on Medicare and Medicaid

  9. Physician Shortage • 20 - 25% of Population is rural • 10 % of Physicians practice in rural areas • Less than 7% of Physicians completing residency training practice in a rural area • Physicians are trained primarily in Academic Medical Centers • Inadequate programs to incentivize physicians to work in rural areas

  10. Community Hospital Closures • 1980s & 1990s • 35 to 40 Hospitals closed each year • Closure left a void that is virtually impossible to fill

  11. Critical Access Hospitals (CAH) • Balanced Budget Acts 1997 and 1999 • CAH program has over 1,300 hospitals to date • Since 1999 very few of these rural hospitals have closed • Exceptions are Oakland City and Huntingburg • Paid based on cost for Medicare

  12. Accountable Care Act • Will Accountable Care Organizations inhibit collaboration and care coordination between institutions? • Expansion of Medicaid • Impact of Health Insurance Exchanges

  13. Future of Rural Healthcare • 17+% of GNP • Healthcare is too expensive • Urban Centers have the political clout and financial strength • CAH Program and other Rural provisions in jeopardy • Federally Qualified Health Center (FQHC) • Rural Health Clinics

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