Creative Solutions to Expand Iowa’s Rural Health IT Funding

Leila Samy and Bill Menner | June 28, 2013

Earlier this month, the USDA Rural Development Iowa State Office, the Iowa Regional Health IT Extension Center (REC) and the Iowa State Office of Rural Health convened the first Iowa Rural Health IT Forum to launch a pilot project designed to expand funding for rural health IT infrastructure to support Critical Access Hospitals (CAH) and rural hospitals in Iowa. This workshop, planned to be held annually, targeted a group of Iowa CAHs and rural hospitals to help them coordinate funding and financing opportunities for rural health IT infrastructure that could help with the adoption of certified electronic health record (EHR) technology and associated system and facility improvements.  Investments like these are necessary for CAHs and rural hospitals to achieve Meaningful Use Stage I and II.

Critical Access and Rural Hospitals – a Critical Resource for Rural Communities

The focus on CAHs and small rural hospitals is important because they are often the foundations of their communities’ health care systems; they extend local access to care where it would not otherwise be available.

  • CAHs offer inpatient and outpatient services, both primary and specialty care. They often own and run the rural health clinics, skilled nursing homes and long-term care facilities in their communities.
  • Rural community hospitals are typically the largest or second-largest employers in the community and often stand alone in their ability to offer highly skilled jobs.

Benefits of Health IT for Rural Health Care

Rural communities are uniquely positioned to benefit from health IT. In rural areas where distances between clinics, specialists and hospitals are great, health IT is especially important because it can:

  1. Give health care providers instant access to information they need to make timely, vital decisions and save lives;
  2. Enable rural hospitals to utilize remote clinicians, pharmacists, and staff members to improve and extend access;
  3. Decrease or eliminate travel time for patients and their families;
  4. Enable rural veterans to leverage local non VHA health care services; and
  5. Facilitate efficient local care after intense care in a tertiary hospital by enabling patients to get care near their families and primary care providers.

Funding is a Key Barrier to Health IT Adoption by Critical Access and Rural Hospitals

CAHs often do not break even and often lose money on patient care alone.  In 2010, the median operating margin (operating expenses as a percent of revenue related to patient care) was 0.75. Low patient volume coupled with extremely small operating margins do not permit CAHs the flexibility to adjust budget strategies to pay for upfront costs of hardware, software, training and broadband connectivity needed to support meaningful implementation of health IT.

For more information on funding opportunities for rural health care providers see: http://www.healthit.gov/providers-professionals/implementation-support-critical-access-hospitals-and-other-small-rural.

Objective of the Iowa Rural Health IT Pilot Project and Key Funding Needs

The basic objective of the pilot program is to develop best practices that would enable rural communities to leverage the full suite of currently available resources at the same time, including USDA’s Rural Development Community Facilities, Rural Utilities Service and Business and Cooperative programs.

CAHs and rural hospitals need funding for:

  • Acquisition and installation of hardware and software (including labor costs)
  • Expansion of broadband infrastructure access to rural hospitals and their clinics
  • Training of current and new health care service personnel, nurses and specialists in the community as well as IT workers to help ensure proper IT implementation and promote privacy and security
  • Purchase or expansion and upgrades of EHR technology
  • Access to sufficient, affordable and secure communications services (e.g., broadband connectivity) to support robust and meaningful health information exchange

What is the Recipe for Success? The right participants!

The trick to launching a successful pilot project such as this one in Iowa is to bring key players together, partners that can bring to bear both public and private sector resources committed to developing new and innovative ways to use existing resources to support rural health IT needs.

At the Iowa kick-off meeting, officials from a wide range of rural organizations and advocacy groups including state associations and organizations representing rural hospitals, health clinics, providers and long term care facilities participated. These organizations are expected to play a helpful role by reaching out to all CAHs and rural hospitals in the state as well as making sure key pieces of information do reach each of these hospitals.

Just as importantly, representatives from the Iowa Telecommunications Association and the Rural Iowa Independent Telephone Association led breakout sessions to help forum attendees address some of their challenges and offer insights about communications services (including broadband connectivity and telephone service) available to these CAHs and rural hospitals.

Companies and organizations that serve as intermediaries for USDA funding programs were also on hand to help link rural community projects to USDA funds. These included representatives of rural electric cooperatives, rural telephone cooperatives and municipal utilities.

The REDLG Program Supports Rural Health Care Providers with Funding Health IT

A point stressed repeatedly by the USDA team was the role that local partners can play in supporting rural Health IT through funding and financing efforts, particularly:

  • rural electric cooperatives,
  • rural telephone cooperatives, and
  • municipal utilities.

Those partners have access to a USDA program called Rural Economic Development Loan and Grant (REDLG) through which they pass-through Federal dollars in the form of a 10 year, 0% loan.  The REDLG program targets rural projects focused on:

  • enhancing and expanding local economic development,
  • job creation and building, and
  • expanding or improving vital community facilities (e.g., CAHs, rural hospitals and schools).

A priority of this program is developing advanced telecommunications and computer networks for medical services. In Iowa, rural electric cooperatives, rural telephone cooperatives and municipal utilities have already funded several rural Health IT projects using REDLG.

Local and Regional Communications Support for CAHs and Rural Hospitals

Several representatives from CAHs and rural hospitals, as well as clinics and long term care facilities, attended the meeting to discuss problems they have with connectivity; these hospitals spokespersons noted that their connectivity speeds were not fast enough for their EHR systems to function properly.  The USDA staff and telecommunications experts at the meeting mapped out next steps to help connect these CAHs and rural hospitals as well as their clinics with services from alternative local and regional telecommunications providers.

HHS and USDA Partnership for Rural Health Care

In 2011, Secretaries Tom Vilsack and Kathleen Sebelius of USDA and HHS, respectively, formalized an agreement to ensure their agencies work together to help rural providers keep up with urban counterparts in the nationwide push to modernize the healthcare system. See: http://www.whitehouse.gov/the-press-office/2011/08/16/president-announces-new-jobs-initiatives-rural-america.

To build on the initial success of this partnership, ONC and USDA Rural Development are jointly launching a number of pilot projects to expand access to funding and broadband to support health IT adoption and health information exchange by CAHs and rural hospitals. The Iowa Rural Health IT Forum is just one project that has been developed as part of this relationship.

In addition, the collaboration is helping to streamline Federal programs and help critical access and rural hospitals leverage the full suite of complementary HHS and USDA programs.  The goal is to ensure that rural Americans can benefit from local access to care powered by the full range of health IT applications, including:

  • mobile health,
  • Telehealth, and
  • electronic health record technology.

Following the Iowa forum, a similar forum was held this month in Wichita, Kansas, which is also a part of the USDA-HHS pilot program.

To participate in our nationwide call to action in support of CAHs and small, rural hospitals, see: http://www.healthit.gov/buzz-blog/meaningful-use/critical-access-hospitals/.