Rural health care providers often encounter barriers that limit their ability to provide the care they need. Even well before the pandemic, rural health providers faced many challenges. Today, workforce shortages and access to health care services are at an all-time high.
On this episode of Value-Based Care Insights, host Daniel J. Marino is joined by the CEO of Great Plains Health, Ivan Mitchell. The two discuss modern-day challenges that exist in today's rural health care environment.
Key points include:
- How to address rural health care challenges and deliver the right level of care while remaining economically stable
- Strategies to provide access to primary and specialty care in rural areas
- The need for alignment between health care providers and insurance carriers within rural communities
Daniel J. Marino
Managing Partner, Lumina Health Partners
CEO & Co-Founder
Great Plains Health
Dan J. Marino: Welcome to Value-Based Care Insights. I'm your host, Daniel Marino. In this edition of Value-Based Care Insights, we're gonna explore some of the challenges that are occurring in rural health care. Rural health care providers are facing enormous challenges and being able to deliver the right level of care at the right time to patients in their community. And there's been a number of organizations who have been fairly creative on thinking through how do we deliver that right level of care, still make ourselves economically viable within our community, and really serve the needs. Well, today I am pleased to have with me the CEO of Great Plains Health. Great Plains Health is in North Platte Nebraska. Ivan Mitchell is the CEO. He's been with the organization for about seven years, and recently has taken over the role of CEO. Prior to that was COO for a good number of years and has done a great job in supporting the organization, aligning with its physicians, and really positioning the organization for success. Prior to that, Ivan had led another organization in a rural health care market, Ivan brings a tremendous amount of experience. Ivan, welcome to the program.
Ivan Mitchell: Thank you, Dan. Great to be here.
Dan J. Marino: So Ivan, maybe if you can spend a couple of minutes on what are you seeing right now as some of the really major challenges for Great Plains Health as you continue to position it for success in serving the patients, serving the community.
Ivan Mitchell: Well, great. Thank you. Right now there are three major challenges and two are kind of intertwined with one another. We've seen the reports out there that about half of the hospitals in the country will have a negative margin this year. Margins have really been crunched, and I bring it down to three areas. Number one is the workforce and the labor shortage. The amount of money that we're and we had a shortage of, and mainly nurses will talk about that, but we had a shortage of nurses prior to the pandemic. I think the pandemic really exacerbated that shortage.
Dan J. Marino: Yeah, I agree. Across the board.
Ivan Mitchell: We're basically kind of left with the decision of if we keep a service going at the level that we have in the past were paying just extremely high agency costs, sometimes two or three times what we were paying before the pandemic. And it just kind of feeds upon itself. So that labor shortage has been the biggest issue is I would say the second largest issue is somewhat intertwined with that. And we are not a critical access hospital. We're 116 bed PPS hospital. So essentially we get paid per admission. We don't necessarily get paid per day. And so if someone comes in for pneumonia, your average pneumonia day is three days. You know, get paid a DRG payment, a diagnosis-related group payment. So let's say that Medicare gives you $5,000, whether that patient stays three days or 30 days. And so we've had a significant amount of patients that we've had patients over a hundred days in our hospital. And so it's been difficult, especially a lot of those patients that you're dealing with have some major social and sometimes behavioral issues. But that length of stay, if you think about it, it costs quite a bit of money to staff a hospital bed with the nurse, the meds that you give, the meals, and essentially all the care that you provide that has to be provided at the hospital level is pretty significant. So if your length of STA goes from an average of three days to four days, you just increased your cost 25%.
Dan J. Marino: Absolutely. Yeah. And you're not getting the revenue in there because the DRG is pretty much set. So I can see that being a major challenge. And then as you've said, exacerbating that even more is the high cost that you're paying for, say agency nursing support and some of the other supply inflationary costs that are inherent in the organization.
Ivan Mitchell: Typically, we've been tracking and we basically sit at about a dozen patients every day that no longer meet acute care status. It's a fair amount of our inpatients that are in that situation. So you have some major cost pressures there.
Ivan Mitchell: If you are in a critical access environment where you're paid cost based, it seems like at the hospital association level and whatnot, it seems like the critical access hospitals are they're still having their own challenges but aren't dealing with that one. And they're doing quite a bit better, financially overall than the PPS hospitals are this year.
Dan J. Marino: So given the financial challenges that you've had, and even within your organization, and then certainly within the critical access hospitals have you done to align a little bit more with them?
Ivan Mitchell: Yes, We've partnered really closely with them for a long time, as long as Great Plain Health has been in existence. It seems like a lot of the time the larger hospitals in the region, they will strive to take business or volume out of the small community and take it to a large facility because then they're obviously getting both professional and technical fees. And that seems to be the way to maximize financial revenue. We take a little bit of a different approach here at Great Plains Health, and we kind of turn it on its head and we tell our specialists to go out to the facilities around us, and then we even encourage them to do everything that they're comfortable doing in those communities. Now some of those communities should not be doing everything. There is definitely not some higher-level surgeries and things like that, but we tell our orthopedic surgeons, if you're comfortable doing surgery there, go for it. Do it.
Dan J. Marino: Well, and you're just supporting, frankly, I think it's better patient care mean instead of having the patients drive 80, 90, maybe 120 miles, which is not uncommon. To be able to have that care closer to home, I think helps all the way around. And if you can have the correct rate, the right inside the model for the surgeons or for the physicians to support that certainly not going out there every day, but once a week or once every other week or something like that, that's a tremendous value add.
Ivan Mitchell: Yeah, I agree. And I think the patients are, it's always easier to recover closer to home if your family can visit you, and I think it's just the right thing to do. Our oncology program's one of the more impressive ones where we send our oncologists all throughout the region, and our service area is about a fourth of the state of Nebraska, and we even go into a little bit of northwest Kansas, a little bit of South Dakota, Eastern Colorado, and we have a good telemedicine program set up where we'll have a physician go to a hospital once or twice a month, month, but then we will see those patients through telemedicine the rest of the month.
Dan J. Marino: Oh, that's great.
Ivan Mitchell: Yeah, they'll continue to get their chemotherapy infusion treatments in those facilities that are in their hometown versus having to, like you said, drive an hour or two to come see us.
Dan J. Marino: So in working through that then with the special, particularly with cancer, telemedicine, virtual health, it sounds like is a pretty big part of your care delivery model.
Ivan Mitchell: It is. Yeah. I would say that Great Plain Health was really innovative even before the pandemic with telemedicine. Not only receiving some services but then also sharing some of our specialty services with the region. And I kinda used the analogy, it felt like, before the pandemic, we were trying to push a boulder up a hill and convince people to use telemedicine. And when the pandemic hit innovation a lot of times will happen during difficult times or traumatic times. And so then everyone jumped onto it and people were coming to us wanting to do it.
Dan J. Marino: Well, sometimes disruption that is the best way to push innovation forward, right?
Ivan Mitchell: It is, yeah, it, and prior to the pandemic we had, so our town is about 25,000, our county is about 40,000, but the fourth state region that we cover has about a hundred thousand in that population. For a town like us, we can probably accommodate one to two nephrologists. And they say the average physician is getting two job inquiries per day because of the shortage. So if you're a nephrologist you're probably not gonna wanna go somewhere that you're on call 24/7, 365. Even when you're not technically on the call how this works a colleague will say, Hey, I just got a quick question for you. Or they'll send you a quick message, and so you really can't get away. So we had partnered with at the time, we had a group out of Utah that was doing nephrology for us. We've since partnered with an organization in Nebraska Brian Telemedicine, that provides telemedicine services.
We had nephrology and stroke, we had pulmonary critical care, we had the infectious disease so we had all of that in place before the pandemic. And so when the pandemic hit, we had a process, we had a system in place, and it was very easy just to moved that along and get that moving.
Dan J. Marino: Yeah, that's fantastic. And I'll tell you, that's just such a big value add when you're taking care of patients across a region. To be able to really use and utilize that technology within the care model, I think has a tremendous amount of value add. I want talk a little bit about your physician alignment strategy. You know, had referenced that mentioned that physicians are getting inquiries from other organizations based on certain specialties. It's pretty competitive out there, and you've got a pretty good model that includes both employment, but then integrating with your independent providers. How's that worked for you in supporting your strategy and care delivery within the system?
Ivan Mitchell: Well, I think it's gone very well. We have with the help of Dan Marino here, we have set up a clinically integrated network. And so essentially allowing the physicians in our region, both employed and independent, to negotiate directly with insurers as a group and then focus on value-based agreements. So that's what we've done. When I started about seven years ago, I think our mix was probably about 40% of our physicians were employed and about 60% independent. Now we're probably about 70% employed in 30% independent. So that transition has come, Yeah we tell our physicians that you're welcome to, if you wanna be employed, you don't wanna deal with billing, with management, with personnel issues we'll take care of that for you. You're welcome to be employed. If you wanna be independent, we'll support you however we can with your independent practice. And if you become employed and then later decide you wanna be independent, we'll help you become independent.
We just leave it up to them. I think that from my perspective, is that there's a lot of trust in our positions and our leadership. So I think that's why you've seen more that have gone the employed route and just have taken some of the headaches off their shoulders. But I feel like it is kind of circular. It seems like right now the regulation, the legislation and stuff is promoting more of the employment model. I wouldn't be surprised with changes in administration if that shifts and people are moved back to independent practice. And we just want our hospital to be a good place for our physicians to work, meaning we’ll support, so we will support all physician models.
Dan J. Marino: If you're just tuning in, I'm Daniel Marino, and you're listening to Value-Based Care Insights. I'm talking today with Ivan Mitchell, CEO of Great Plains Health, and we're discussing some of the challenges that are occurring today in rural health care and building out what you had just mentioned. I give you a lot of credit for that. The relationship with your providers and really supporting the physicians whether they're independent or they become employed, obviously is really critical. But a big driver of that is the economics and the financials that come through, particularly on the revenue side. Do you feel like the payers that you're working with right now, do they understand some of the challenges that you're working through and your physicians are working through and serving the needs of the community?
Ivan Mitchell: Personally, I think they understand it but in a lot of ways, the incentives between the organizations are kind of malaligned.
Dan J. Marino: Yeah, no, I agree with you. And that's a big point. I've talked about that many times on the program here, that the incentives of the insurance carriers and the plans don't necessarily align with a not-for-profit health system. And certainly a rural health care provider, like I think it is a bit of a challenge.
Ivan Mitchell: I'm obviously team hospitals and the average rated hospital has a 3.83% profit margin, or at least that's it's gonna be interesting to see what it is for 2022. I'm guessing it's going to go down quite a bit from there. But in my mind, you look at pharmaceuticals, medical device and insurance companies, and whether you like the Affordable Care Act or not, they had to cap insurance profits at 20%. And so sure, because they had to cap, that tells you that it is quite a bit higher than that. And then you'll see some pharma industry and some companies that'll have three, 400% profit margins. And so health care is grossly unaffordable. And as a hospital, we absorb these costs from pharma, from medical device, from insurance, and then we end up collecting from the patient. So the patient hates us.
But I think when you follow the dollar I feel especially the non-profit community health systems are kind of the good player in the market, but the way that this is set up is most people hate us. So it's a little frustrating in that regard. But I'll give you a couple of examples. Blue Cross Blue Shield in Nebraska, they're, they're gonna start paying 50% for telemedicine. And we've basically shared with him what we shared with you with our oncology practice, and we said, Hey, this is very not rural favorable. And we use those examples and the person we're talking to obviously can't make changes at the high level. They can just kind of move it up, but they don't do that. The other issue that we have, we're having some struggles with is white bagging where it'll delay a patient getting a specialty med sometimes more than a week.
The model that we try to put out there, we try to get the physician to establish a relationship with the patient locally. That's the white bagging issue where we keep pharmaceuticals on hand, we have to storm an appropriate way, we have licensed pharmacist that have to take care of it and do all this work. Then an insurance company says, Well, you know, you can’t get that from the that hospital. We're gonna delay this a couple of days while we ship something in from another pharmacy. And then you guys who have absorbed all the fixed costs are gonna have to go ahead and give it to him and we'll give you a $50 administration fee.
Dan J. Marino: That just doesn't, it just doesn't work.
Ivan Mitchell: It's important. And the reality is it's basically taken the profit from the hospital to the insurer who already has a much higher profit than we do in And then our hospital, for example, we are 70% Medicare, Medicaid or uninsured. So essentially we have 30% of our patients making up the difference of the other 70%. And so when you commoditize health care and you take services out of the hospital and take those margins somewhere else, essentially what happens is the cost for the 30% of the people that we have here in the hospital, those have to increase to cost shift and make up the difference for our Medicaid, for our self pay population.
Dan J. Marino: Or you based with a situation where you have to cut services, right?
Ivan Mitchell: Exactly. Can't afford it. And we're required to provide care regardless of someone's ability to pay. And so we are almost kind of a public entity, and the more that you take out of it you might say, Oh, this is great. We're gonna save 5%. If we take this outta the hospital, move it somewhere else. And it just expands all the stuff. And the complicated stuff, the complex stuff has to be provided at the hospital.
Dan J. Marino: Another area I'd like to get your thoughts on is primary care. There's been a lot of articles that have come out recently that obviously it's been happening over the last couple years, that there's been a shortage in primary care. But more recently there's been an article that 40% of some of the primary care services are being served in some markets by advanced practice providers. And it does create some consternation in a market that has strong primary care physicians. But in other markets where primary care is experiencing a real shortage that's been an opportunity to be able to fill the void. And what we've also seen in other markets is that telehealth has really been used to at least provide some level of primary care. And certainly it's not taken the place of it, but it's at least provided some basic levels of primary care. What are you seeing in your market?
Ivan Mitchell: We have some excellent, stable family practice MDs here that serve our population. We also do have a fair amount of advanced practice providers that also do primary care here in our community. So our area be in kind of a hub in western Nebraska. Our family medicine group seems fairly stable. Yeah, I would tell you a lot of the smaller communities that have critical access hospitals around us, a lot of them are much more heavily reliant on the advanced practice providers because they don't have any physicians out there. So I think you're seeing more and more of an emphasis on providing that care in the future and being subsidized. There are a lot of telemedicine services now where some of the basic stuff, you can go and get the visit that you need, have them prescribe you a medication or whatnot through, Right? So I think you're gonna see both primary care, telemedicine, kind of primary urgent care visits go through telemedicine. And I think you're gonna continually see the expansion of advanced practice providers, both physician assistant practitioners.
Dan J. Marino: Well, knowing what I know about Great Plains Health, whether it's intentional or unintentional, you've done a great job of creating alignment with your primary care physicians and establishing that physicians as the core of primary care services. And then it seems like then you've been able to provide additional support through alignment with aps and even utilizing telehealth and I, that certainly can be a lesson learned for some of other organizations who maybe have not taken that type of an intentional role. And it is a challenge. It is a challenge for many rural health care providers because at the end of the day, care starts with primary care and you need to have that. So Ivan, this has been fantastic. I really appreciate all of your insights. For some of our listeners who do work in rural health care communities whether they be physicians or administrators, any pieces of advice, words of wisdom you might wanna share with some of your colleagues?
Ivan Mitchell: Well, I think with any organization, any business, I think you really need to sit down and decide for our organization and our community what are we really gonna be the best at? And so we've tied being the best at to our core service lines, and so we're gonna have great primary care here but we've essentially said that being a regional leader we're looking at cardiology, oncology, orthopedics, those are kind of the specialties that we should be great in a community our size, and then provide that service in the communities around us. And back here now I'm gonna tell you that as a critical access hospital that I ran what I was gonna be the best in the world at was very different than what I'm doing now. So I think there's kind of this balance of taking a look and being very pragmatic about what can we be the best at, and then really go all in on doing those things and being the best in that area. And I think that for anyone running a health system, a hospital, an insurance plan, or anything else that's that's something that they really need to look at and say, Okay, how do we become the best at what we can be the best at and go after?
Dan J. Marino: Yeah, I agree. Just great advice. And I think hearing you go over some of those key things, I think in my mind it comes down to three things that frankly, you've done really well. I think identifying with services, like you said, you wanna be the best at, right? And focusing attention on those service lines. But the other two things that really caught my attention was how you're collaborating with other critical access hospitals and even really pushing the payers to help understand what the challenges are. And then the third thing, which I think is certainly a key to the success is your physician alignment strategy. That I think has been great. So been, I want to thank you for your time today. This has been fantastic. I'm sure our listeners really appreciated all of your insight and best of luck to you, and I'm sure your organization's gonna continue to do
Ivan Mitchell: Well. Thank you, Dan. It was a pleasure.
Dan J. Marino: I want to thank everyone for listening to another addition, another episode of Value Bake Care Insights. Until the next insight, I am your host, Daniel Marino, bringing you 30 minutes of value to your day. Take care. Have a great day.
About Value-Based Care Insights Podcast
Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners