Rural health providers and the need to collaborate

UPPATE: See note at the bottom of this post.

DULUTH -- Several hundred rural Minnesota health care leaders were urged this morning to think hard about moving toward the collaborative model of health care envisioned under the 2010 national health care reform act.

"You have to consider this if you want to be competitive," said Clinton MacKinney, assistant professor at the University of Iowa College of Public Health and a long-time analyst of the nation's rural health care system. He was addressing the Minnesota Rural Health Conference that wrapped up today.

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The provision of the national health care law that "has the country in a lather," as MacKinney put it, involves the federal encouragement of networks of "accountable care organizations." Lots of rural providers worry that the move places a disproportionate burden on them.

But MacKinney described it this way: The government wants providers to deliver value to patients (as opposed to services that are paid for time after time.) And to deliver value, the government expects doctors, specialists, hospitals and others to collaborate and then be held accountable. The carrot is that health care providers get to keep a good share of the financial savings they can generate this way.

Regional networks like Sanford, Essentia, Avera and Mayo are growing by buying hospitals and clinics, and urban institutions will be on the prowl to connect with rural providers. But MacKinney insisted the collaborative arrangements don't have to involve ownership. Other kinds of networks and agreements can work as well.

Why should rural institutions think about this? MacKinney got blunt: Rural care isn't as good as it can be.

Recruiting doctors and other providers can be difficult; technology is sometimes inadequate, long-term finances can be unstable. With Medicare acting as "the big dog" in the equation and demanding better results for its patients, "People are talking about winners and losers," MacKinney said.

If two small hospitals near each other perform differently, perhaps one won't survive in the new world.

Writ smaller, the idea of collaboration at the institutional level translates to team care at the patient level, he said.

"There are doctors who don't want team-based care. They want to see a patient and move to the next. That's not going to work."

MacKinney was a forceful speaker and he acknowledged that rural hospitals and other providers have tough work ahead of them. But he made it clear that the world of living off volume of services is fading fast, and the more nebulous concept of providing value is replacing it.

Collaboration will be the key to success, he said.

For more on rural health care, see the Ground Level reporting we compiled here.

UPDATE: After reading my post, MacKinney sent me an email clarifying and expanding on his thoughts. Here are his further comments. (Thanks, Clint.)

"I believe the shift to health care value will indeed occur, but slowly, probably over a decade or more. The shift from being paid for volume (fee-for-service) to value (quality delivered efficiently) requires colossal health care provider change. The entire organizational structure (culture) of a health care provider/system must shift in very dramatic ways. Right now health care providers remain profitable by increasing service volumes (e.g., more CAT scans) and amassing market share. Hopefully, they do so by increasing necessary and high-quality services, but unfortunately the health care market does not demand quality ... yet.

"Just imagine how the auto industry would change if we no longer bought an individual car. Instead, we each would send a certain amount of money yearly to an auto manufacturer and that cost/price was based on how long the manufacturer's fleet of cars lasted. It's almost too different to imagine! (That analogy isn't quite right, I need to work on one, but you get the drift.)

"So the challenge health care providers face is the transition to value-based purchasing. How do you orchestrate the organizational ethos change that value-based purchasing requires when the bulk of your business remains in traditional volume-based (fee-for-service) payment? And how does our government (as the largest purchaser of health care services in the U.S.) facilitate that transition without putting some providers out of business and jeopardizing access to care? Tough questions, but just the ones we need to explore through innovative organizational structures and public policies."

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