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Becker’s Healthcare Podcast
Healthcare Upside / Down: Sustaining Rural Health Through Innovation and Payment Reform
00:23:37
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- [00:00]
A
Welcome to Healthcare Upside Down, a podcast by Becker's healthcare and ECG management consultants, in which we'll explore the upsides and downsides of healthcare and the industry's most current trends. I'm Molly Gamble and today I'm thrilled to be joined by two guests. We have Lynn Barr, founder and CEO of Caravan Health and president of the Bar Campbell Family foundation, and John Budd, partner with ECG management consultants. Lynn. John, thanks so much for joining me today and being my guest.
- [00:25]
B
Yeah, thanks for having us.
- [00:27]
C
Thank you.
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A
Well, to get us started, I just shared a bit about you, your names and your titles there, but I know there's more to your professional stories. Can you share a bit more about yourselves and your work in health care? Lynn, can I turn you first here?
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C
Oh, sure. Thank you. I've been working on rural health care since 2010, where I was getting my master's in public health and started working with the rural stakeholders in the state of California. I found that this is a constituency that is very underrepresented, Washington and elsewhere, and had tremendous needs, but also tremendous heart. And so I kind of fell in love with rural America and I've been working with them ever since. Under Caravan Health, I wanted to support their journey to value based care and organized hundreds of rural hospitals and thousands of clinics in 44 states in Guam, saved Medicare half a billion dollars and paid half of it to the provider. So it's a wonderful group of people and I really love working with them.
- [01:30]
A
Lynn, that's so well put. Underrepresented in many places, including D.C. but also, like you said, tremendous heart. Couldn't agree more about the rural healthcare leaders and clinicians out there. John, let's turn to you and learn more about your background.
- [01:45]
B
Yeah. Thank you. So by way of introduction, my name is John Budd. I'm a partner with ECG Management. I actually started my career in the back of an ambulance, so working with some pretty underserved populations in terms of social determinants of health and really thinking about and understanding the safety net that was there. From there I moved into trauma center administration and ultimately consulting, where I've really grown a practice of focused exclusively on health system sustainability. So working with health systems really constantly challenged to do more with less to think about how do we thrive and survive both strategically and then really in the nuts and bolts operationally in between. There I've been the CEO of a medical group in a rural part of Indiana, so know pretty distinctly the challenges of how do we care for a population in an area that's highly reliant on recruiting physicians to lesser known outside metropolis areas, but also relies on things like the VISA program or alternative funding streams to be successful in that. So I'm incredibly excited to chat with you all today.
- [02:46]
A
I love that perspective you bring to this, John. And starting the career in the back of an ambulance, I mean that's a pretty special origin point for this conversation. We if we had been talking about rural and community health systems last year or the year before, it still would have been a very, very important conversation. I feel like at this time the stakes are even higher than they have been in a long time. These organizations just continue to face financial workforce access related pressures. How can we just start with some groundwork and draw the landscape for our listeners, especially about some of the recent federal initiatives that are influencing rural hospitals trajectory. I'd be curious from your vantage points, Lynn, I'll turn to you first here. What does the future outlook for these organizations look like right now?
- [03:31]
C
Boy, that's a really good question. It really depends a lot on what the states do in the next couple of months. There's a huge opportunity of $50 billion in the rural Health Transformation Fund for them to really re engineer how we deliver rural health and create a sustainable model. But with very little time to do it, little expertise, it's going to be really hard to p and what I think everyone's afraid of is that these cuts are going to be the end of rural health and that we're going to try to band aid things for a little while and then it's all going to fall apart. So we don't really know. I know that we really hope that people are going to take this opportunity to do true transformation and create a sustainable path, because the path they're on right now is definitely not sustainable.
- [04:21]
A
John, I'll turn to you here. I mean that fear of this being a band aid approach before things ultimately fall apart, like Lynn said, I mean that's a pretty serious concern. What would you want to add about the outlook here?
- [04:32]
B
Yeah, I think when you think about where rural healthcare and I would say community healthcare in general is going nationally, you got to think about it with kind of two different lenses, right? The first would be how do we stabilize immediately so the cuts are happening, they're real, they're there. And honestly these organizations are already struggling today. So there's an element of how do we stabilize so that we can prepare for transformation. Because it's very hard to transform when you're in a point where you can't staff or you're worried about making payroll in the next couple days, that's really challenging. And that involves rolling your sleeves up and getting your hands dirty. I think if you work with rural health systems, you know, that's something they've been doing for a very long time. So it's kind of scary because if they could do it, they probably would have already. Because I would tell you, when we talk about innovation in health systems, oftentimes big names get that draw. Rural hospitals are some of the most innovative hospitals that you will ever encounter because they've had to solve for problems that nobody else has that's pushed them out of there. So I think from a stabilization perspective, I think we're asking rural health leaders to reach into their bag of tricks one more time for the next couple months to say, how do we hold on long enough to transform? And I think that's an existential and really also tactical question. So we're flipping back and forth. I think the second piece is exactly where Lynn is going. I think if you look, there's no nothing left in the tricks after this, right? We can't keep going back to the well for the same opportunities, the same 340b savings, workforce savings, those types of things. So now is the time that once we're there, we have to change the model of care. And I think that means changing from an acute care centric model of rural care delivery to something different. So I think now is the time that has to happen because I don't think these communities really have the choice anymore in this, and I don't think that they made the choice to lose health care either. So I think when we look forward, it's going to be critical.
- [06:26]
A
John, I love that point you made about how these organizations are incredibly innovative. They might not have the whiteboards and the centers of innovation that we saw about 10 years ago really proliferate among some of the bigger AMCs. But to your point, the leadership usually has to wear numerous hats. There's this concept of frugal innovation that's always humming through their organizations and how they're thinking. So I really appreciate you making that distinction. Lynn, was there something you wanted to add there?
- [06:53]
C
I just think that what John said is really important about thinking about the sustainability of where all of this is going. One of the comments I've heard from policymakers is that in all this money, no one's talking about sustainability. And what we need is a different payment model. All right? We're paying them 99% of costs, and there's no commercial. So we know we're starving them and we continue to starve them with sequestration, which disproportionately has affected critical access hospitals and rural health clinics. So how do we change the payment model? And what I'm afraid of is that people are gonna come out and say, hey, we'll adopt this technology and we'll do all this work and you guys just do it in to what you already do. And you know, we failed with that 10 years ago, you know, when we came out and said, hey, everybody just do electronic health records on top of everything else and watched access just disintegrate because of the extra, because there were no extra clinicians. There was no, there was an incentive payment, but not an ongoing payment. So in order for us to fix the future of healthcare, of rural healthcare in particular, and I would say all healthcare in America, we have to pay for health. We can't keep paying only for sickness. And we have to have a new workforce that's going to be able to do this work. So we can't just put this on these people that are already stretched as thin as they possibly can be and then ask them to do more with less money. So that's really, I think what people need to think about and what I'm not seeing a lot of coming from the States is how do we change the payment model? And that's what we should really be thinking about.
- [08:43]
A
Mm. Lynn, are there any examples or strategies or models that you have seen that you would highlight for listeners when, when you're describing this?
- [08:53]
C
Yeah, so I, you know, so population based payment models are, are more amenable to paying for health than they are for, for paying for sickness. However, you need a lot of scale, right? So you need a, you need a big N. And, and in these, in these rural communities you don't have that scale. So there's a kind of a p. But what I've been thinking about is trying to think how would you apply these funds to create a new payment model? And I think it would be an all population payment model. So I kind of worked from a fee for service backwards perspective and did a whole budget of what would the services have to look like to create health in these communities. And this means a whole new workforce of people that kind of modeled on both community health workers and US army medics, right? These people that have been trained in high school graduates that have been trained and given protocols and flowcharts and know how to triage people, but also can interact individually and help People get where they need to go. And so what I've been thinking about is a all population payment model, $150 per person per year to get this thing off the ground that attacks health with every member of the population. Works on diet, works on nutrition, works exercise, works on processed foods and chemicals that maybe we don't really want to have in our body and we should be asking questions about. And so this sort of approach would then bring up the health of the entire population, particularly in an area where the health is worse than the rest of the country, bring down the total cost of care, bring down the cost of the state Medicaid budgets. But also I priced it at a point that would create profit for the rural community that could then sustain the health system going forward. So I've created this model called Carpe Diem, which I, you know, I'm happy to, I put on LinkedIn. It's open source and it's something that, based on my experience in working on payment models, would be a sustainable model for rural America that could really change the healthcare of our communities.
- [11:15]
A
Lynn, thanks for sharing that with us and walking us through that. Carpe Diem is what you've titled this and it sounds like if listeners are interested, I can find more information on it.
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C
Great.
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A
But John, I want to turn to you here because what Lynn just described, I mean, that's no small feat. When we talk about changing the care model, what are some of the biggest sticking points of this effort? You know, when you think about redesigning care models, what is usually where things start to hit a wall from what you've seen?
- [11:44]
B
Well, I want to start by saying it's a huge feat, but Lynn is probably not doing herself a doom service in the sense that she's actually done this before. And I think when you look at the numbers of what Caravan was able to do on a national scale and the ability of impacting lives in those communities with small ends, I think there's certainly a proof case as to how you could apply an alternate payment model and also an alternative care model to support that. I think, you know, we think about the workforce. I know I've been on podcasts with Beckers even talking about the workforce. I think we talk about the workforce shortage pretty extensively and how are we going to solve it through recruiting, retention and those types of things. I think while that's absolutely part of the strategy of how do we grow our own in these communities, that we have people who are, you know, fully vetted and invested, because I think they're more likely to stay. I think there's an underlying assumption there that the work stays the same. And to me that's where the problem really lies. And I think Lynn touched on it with this idea of paying for wellness and moving away from an acute care based model. When you look at it on a workforce basis and you say what is the need for caregivers in these communities? What you see is in the acute care setting, it's more resource intensive. So the more that we have patients that have acute care demands, the more specialties, the more subspecialists, the more high training individuals that we have to bring to those communities to sustain that. And with volumes being low, you're never going to get the scale that Lyn was talking about. So I think the challenge becomes how do you reduce the need for acute care? And this is true in every single market, but especially true in rural. So I think when we look at this, the question has to become how do we change the acute care model? And if we can move that more towards a care management model that's more community focused, that's less focused on how do we deploy the money associated with the rural transformation Funds and to fixing hospitals to how do we deploy that to building an effective community safety net to manage this care? I think you're going to see a much larger change and I think that's going to change the mix of the workforce that you need in the future to better mirror what's available in those communities today and actually allow you to Lynn's point, to reinvest in the communities that are there.
- [13:56]
A
Thank you, John. And I think, Lynn, what you just described in Carpe Diem, I mean that is sustainability. John just mentioned the, the Rural Health Transformation Program, which I want to get to next. This is slightly different from what you described, the redesigned care model. But CMS on September 15th announced states can now apply for funding from the Rural Health Transformation Program. It looks like states have until November 5th to apply. CMS will announce the recipients by December 31st at the start of 2026. But Lynn, let's talk about this because there's 50 billion available to rural providers from 2026 to 2030. And I imagine there is a long priority list for a lot of these organizations. How do you think that states and providers should be thinking about this fund? How do you think the collaboration between the states and the providers should be really structured to get towards sustainability and the greatest long term success? So it's not the band Aid that you had voiced before.
- [14:56]
C
It's a great Question. So if you look at the rural health transformation program and the scoring of it, about half the points, so there's the first 25 billion. We're not, you know, that's, that's, you got your application in, right? There's the next 25 billion. And about half those points are for these transformation activities. And if you don't apply for any of those transformation activities, which a lot of them, you know, and like their, their example on page I think it was 98 or 99 of the highest scoring possible program you could put in there was population health model is very similar to what I just described. If you want maximum points on this and you want maximum funding, you're going to have to move into some sort of value based care population health model that a lot of states are like, I can't do that, it's too hard. But it's not as hard as it looks. I mean you have to have some basic principles of how you put this together in terms of simplicity for the state, in terms of the payments, in simplicity for the providers in terms of what they have to do. And also a way of measuring what you're doing that allows you to know that you're being successful. And so having process measures along the way and having a rigor in your program are all going to score very high. And I think that where a lot of people are going to struggle, a lot of states are going to struggle is they've got a month basically to come up with a model like this. They weren't really thinking along these lines. They weren't understanding how much of the funding is going to go towards these population health models. And if only a few states apply for some of these categories, then only a few states will get the money, right? And it will only be divided amongst them. So any category the states don't apply for is money. They forfeit. Right. And if they don't try to get their heads around how they can do something in population health and sustainability, then this is just a band aid for their states and five years from now they're going to be in serious trouble. So I really encourage the states to go deep and to look at these models and to try and in the carpe diem model that I put out there for states to look at, this is a framework for you to look at and go, okay, there is a way to do this simplistically. Now I'm the queen of oversimplification. So when I say simple, it ain't that simple. But there is a way to do this and to do this effectively and to actually make a difference in your communities. And I just think really pray that the states have the time and the wherewithal to try to think through what they can do to really make a difference in the future.
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A
Lynn, what I'm hearing you say is that time is not abundant with this effort. But to your point too, it sounds like you're encouraging rural health system leaders to not be unnecessarily intimidated by this.
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C
That's right. And I'm sending a copy of my model to every state so then with budgets and everything else, and they can take it, blow it up, do something with it. But I just wanted to look at it as like a starting point of how you can really make a difference and how you can score extremely well on your application. So that's the other thing is, is, you know, 40% of the funding of the scoring on this is about sustainability and measurement. And this is something that states, you know, I mean, CMMI has not been able to do this very effectively. So asking states to come up with this very quickly is hard. Look at the model, there's very concrete ideas that they could follow and just use it as their own platform to come up with something meaningful to get in their application so they don't forfeit this money to other states.
- [18:49]
A
I'm sure your blueprint will be going a long way in those states that receive it. Lynn, that's, that's excellent that you're sharing that and making that accessible. John, I want to turn to you. Is there anything else you want to add following Lynn's remarks on the rural Health Transformation Program?
- [19:04]
B
Yeah, I think so. When you look at some of the numbers put out by any NRHA in this space specifically, it's important to note that the transformation program doesn't come back to filling the funding levels that were there before. So when you think about innovative models that need to be there, they need to be self sustaining beyond the period of the transformation grants and what's available to them. So you're going to see a lot of systems and states, I think, say, how do we use this for shiny new capital or potentially how do we repeat, you know, the meaningful use Acts and some of those types of things that are going to drive adoption of technology, I think that's probably a little bit shortsighted and won't have the effects that need to be there. So when you look at strategies as a state to how to address this, I think the question is going to become how are you going to build a model that when this money runs out in a couple years is going to be constantly refilling that bucket so that we're keeping being able to invest in the care in these communities that are there. So I think when you think about models that like Lynn is proposing, the idea that we can actually bend the cost curve at the end of this and that we can move away from that acute care model over time, which I think has been elusive in some instances, but many communities have actually been able to be successful in it. I think that's the direction from a sustainability lens you have to take.
- [20:16]
C
I'm just seconding what John said. We need to create profit streams in rural America. Our payment model for rural America has no profit in it. If there's no profit, there can't be innovation and sustainability. And so as you're as the states are thinking about these models, create a profit stream that also reduces the total cost of care for Medicaid and for Medicare and everybody wins. And that's the goal.
- [20:46]
A
I want to thank each of you because I think as we wind down here, this is a topic that it can be really challenging. Obviously there's no easy answers. That's why rural health is in the position it's in in the first place. But I think as you both help me better appreciate from your remarks, it takes a great amount of ambition right now, but also a great amount of common sen and really thinking through so it's not throwing your hands up and saying, oh well, we've gotten here, we have to completely transform and where do we begin? It sounds like. Lynne, there are some really effective blueprints in existence as you've helped us better understand with carpe diem. John, to your point, this is probably not the best time to start thinking about shiny new objects with these funds. You need to focus on sustainability. Still, is there anything that we didn't touch on in our conversation or any final thoughts you'd like to leave our listeners with on this big topic?
- [21:34]
C
Molly, I just want to double down on what you just said. Use existing payment models, use existing codes, use existing Medicare Assured Savings Program. Don't try to invent a new mechanisms other than big checks. Don't create new codes. Just stay away from that type of innovation and try to use what we have to create sustainability. It's there. We have all the elements. We just need to organize it.
- [22:06]
B
Yeah, Lynne, I love what you just said. I think as a health system leader and working in sustainability for a number of years, I think the thing that can be disheartening sometimes is you look at the policy landscape and how things constantly change and when you think about how are we really going to address what's in front of us, it's kind of like taking a crystal ball and you're at best guess, 10% likelihood you're going to get what you need. And I think that's kind of the glass half empty way of thinking about it. The reality is, just like rural health systems have been doing for a long time, innovation starts within the constraints that we have. And if you stop kind of waiting for the answer to change at a federal level or a macro level, there are tons of opportunities to use the systems that we have to care for patients differently. And what this money is, is while by no means enough to replace what was in Medicaid, it is an opportunity to use this in the near term to say how do we redeploy what we have in a way that's better suited to the communities we have? So it's just an exciting time and a little bit scary, but I think an exciting opportunity for health systems to do things differently.
- [23:08]
A
I appreciate the realism, John, and also the half glass full outlook that you just ended on. Lynn John, this has just been a really interesting conversation. I want to thank you so much for your time and your insights today. We also want to thank our podcast sponsor, ECG Management Consultants listeners. You can tune into more podcasts from Becker's Healthcare by visiting our podcast page at beckershospitalview.
- [23:29]
B
Com.
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A
Lynn John, thanks again.
- [23:31]
C
Thank you Molly. Great job.
- [23:33]
B
Thank.
- [23:36]
C
You.