Hospitals in rural areas are economic drivers. Read more
The Next Step is a Doozy!
Given the U.S.’ $10 trillion debt, future federal budget austerity and the (2010) enactment (and recent Supreme Court decision about the tax provision of the Affordable Care Act (ACA),) talk in Washington and around the country continues to focus on how to implement policy measures that avoid sending the U.S. over a “fiscal cliff“.
Clearly, in order to correct our current fiscal path, major policy changes will be needed to beneficial programs important to many Americans, including those living in rural areas. Among the top concerns are continuing and improving healthcare in rural areas where hospitals rely heavily on Medicare reimbursement rates. Medicare rates that cannot continue at current levels.
The National Rural Health Association (NRHA) has scheduled a “March for Rural Hospitals” in Washington, D.C. on July 30-31 as struggling hospitals across the nation’s rural landscape attempt to literally keep their doors open to service the 60 million Americans living in rural communities.
Two major issues for NRHA are: A.) funding for Medicare Dependent Hospitals (MDHs) and B.) the rural low-volume adjustment Medicare payments that are set to expire October 1. Read more
With most rural healthcare facilities built under the Hill-Burton Act of 1946, many are in critical need of upgrades or replacement to deliver 21st century health care throughout rural America. Meeting increasing healthcare demands including preventative, palliative and other care services are becoming impossible to provide with limited financial resources and antiquated facilities. And, while politicians from both political parties travel the countryside talking about how laws need to change to address healthcare delivery, no one is addressing the failing rural healthcare infrastructure.
Kentucky: 423,000 new Medicaid Enrollees
The Minority Leader of the U.S. Senate, Mitch McConnell (R-KY) recently met with the staff of T.J Sampson Community Hospital in Glascow, Kentucky, a rural community with a population just over 14,000.
According to their website, TJ Sampson Hospital is a 196-bed acute care facility, including 16 skilled-care beds (http://www.tjsamson.org/index.html).
According to reports from the Bowling Green Daily News, http://www.bgdailynews.com/news/local/mcconnell-calls-for-do-over/article_ff253ea6-aa77-11e1-a5be-001a4bcf887a.html, “A May 2010 report from the Kaiser Commission on Medicaid and the Uninsured estimated that if the new Affordable Care law adopted by Congress in 2010 is accompanied by a more aggressive outreach and enrollment campaign, Kentucky could see as many as 423,757 new Medicaid enrollees by 2019.” McConnell noted correctly to the staff of TJ Sampson Hospital, “I know you’re wondering how in the world you’re going to handle all these folks when they show up in the ER.”
According to a family medical doctor participating in the forum, “we need to revolutionize and transform a very dysfunctional system of health care.” He is right and the Rural Medical Facility Investment and Improvement Act (RMFIIA) can help in the transformation.
Rural Medical Facility Investment and Improvement Act (RMFIIA)
The RMFIIA, http://www.thelifecaregroup.com/federal-legislation.html, affords over 2,000 rural communities a unique option to develop a new, hybrid, business-acclimated healthcare facility where replacement of an antiquated hospital is required. These new medical campuses will integrate the latest in 21st century medical innovations, facilities, and palliative and preventative programs while simultaneously providing care to a growing senior market; all of which work to ensure its financial sustainability and lower overall healthcare costs. Most importantly, at the end of the RMFIIA’s development, these facilities will be locally owned and operated without any financial risk to local governments or the community’s tax payers.
The justification for RMFIIA is based on the challenges faced by most rural communities needing to replace an antiquated healthcare facility. Currently, existing public and private financing often requires substantial matching or other unattainable financial requirements to build the type of healthcare facility truly needed to be successful. Moreover, with current budget constraints Congress will soon address Medicare and other entitlement programs that are likely to significantly impact rural healthcare’s funding baseline and limit available dollars to address infrastructure. The RMFIIA provides the financial incentives to attract private investors to fill this gap.
Encourage Healthcare Investors
To entice private and institutional investors, the RMFIIA provides financial incentives including tax-free interest on the funds advanced by the investors in the creation and development of these facilities. In consideration of these incentives, the investors are required to sell the facility at its developed costs allowing the local community to purchase a financially viable healthcare facility at a currently unachievable cost. A safety net provision allows for a facility to be sold at below its developed costs to match its revenue capabilities by investors receiving federal tax credits equal to the discounted sale amount ensuring both community and investor security.
Another peripheral benefit is the economic stimulus and jobs provided by the RMFIIA. As the U.S. is experiencing its worst economic downturn in recent history with persistently high unemployment, the RMFIIA will create over 250,000 jobs sustained over a six year period in the development and support of rural healthcare campuses developed under this legislation in addition to the 35,000 permanent new healthcare positions required to sustain them. The RMFIIA will become the single largest private investment in our nation’s ailing economy at a critical time.
The RMFIIA is presented as a completely pay-as-you-go qualifying legislation. Given CBO’s policy of scoring legislation without consideration of future economic impacts, the legislation will cost an estimated $3.8 billion over the 10-year CBO budget projection period. However, the reduction of dependence on government programs, Medicare Unit Cost savings and increased revenue generation from these hybrid healthcare facilities coupled with a significant increase in GDP from the jobs created will generate an economic stimulus of over $34 billion during this same period using U.S. Housing and Urban Development calculations.
The RMFIIA is building support and already enjoys the support of rural communities across the nation and rural advocates like Wyoming, Colorado, and Nevada Farm Bureaus, two of our nation’s leading health care consulting and CPA firms, Stroudwater (www.stroudwater.biz ) and WHIPFLI Accountancy Corporation (www.whipfli.com).
The status quo has resulted in 20% of our rural hospital closing over the past decade. This failure rate is increasing and Congress needs to act immediately. Given our current economic situation our federal government can no longer afford to meet today’s rural healthcare demands let alone address the future costs we face as our rural healthcare infrastructure continues to deteriorate. The Rural Medical Facility Investment and Improvement Act addresses the capital needed to preserve and build a sustainable rural healthcare system with private financing in lieu of governmental programs we can no longer afford.
To learn more about the RMFIIA, please contact Cansler Consulting. Cansler Consulting is an experienced lobbying firm in Food and Drug Administration, budgeting, agriculture, rural healthcare, and energy policies and through our Congressional relationships we can help you influence the policy makers on Capitol Hill. You can contact us at email@example.com or at (202) 220-3150.
Leading industry experts, researchers and federal lawmakers know that the current U.S. healthcare system is the largest factor that contributes to the U.S.’ current and future fiscal woes. Healthcare costs continue to increase and demographic and other trends show increasing costs will escalate in future years.
Over the past few years Congress has attempted to fix the ailing healthcare system but those attempts have yielded few realistic results. The Justices sitting on the nation’s highest court have decided on the constitutionality of the 2010 Affordable Care Act. In the ruling, the court upheld one of the most controversial provisions, the individual mandate requiring people to have health insurance, is permissible as a tax.
Moreover, all of this is occurring amidst a growing crisis in the availability of about 267 drugs including blood thinners, heart medications, cancer treatments, antibiotics and anesthesia. This crisis has been growing since 2005 when about 61 drugs were in short supply. The American Hospital Association states that 82 percent of hospitals throughout the U.S. believe these delays are life threatening. Read more
My name is Dr. Lonnie Hammargren, M.D., having been a decorated Vietnam combat physician, NASA Flight Surgeon, University Regent, Nevada’s 31st Lieutenant Governor and practicing Neurosurgeon for over 40 years, I am writing you today to discuss an important issue regarding our deteriorating rural healthcare system which has resulted in the closure of over 20% of our rural hospitals.
Anyone associated with rural healthcare knows that most of our nation’s 2000 plus rural hospitals were built under the Hill Burton Act of 1946 and surpass 50 years of age. Advancements in patient care and medical technology have outpaced these facilities’ abilities to adapt to 21st Century healthcare making them inefficiently obsolete and cost prohibitive to remodel let alone operate. Many rural hospitals are no longer able to serve their community to its fullest, requiring many rural resident’s to travel long distances to receive even basic healthcare services. Read more
During the President’s speech to a Joint Session of Congress on September 8, he said, “Every proposal I’ve laid out tonight is the kind that’s been supported by Democrats and Republicans in the past.” Typically, the opposition party would be totally dismissive of such remarks, but with the U.S. economy on the ropes and a U.S. electorate demanding action to remedy it, that’s why many congressional Republicans cannot totally dismiss the remarks of the President. Read more
60 million Americans are living in rural communities throughout the U.S. and according to Cornell University, since the 1960s, the rural population has aged more rapidly than its urban counterpart. Hospitals serving rural populations have also been aging. In fact, rural hospitals average over 50 years of age and these facilities have already out-lived their lifespan and are unable to meet the demands of modern medicine and technology.
Time to Change the Tax Code to Encourage Investment in Antiquated Rural Hospitals
Rural healthcare organizations are challenged to meet the minimum financial requirements of Local, State, or Federal assistance programs to replace aging facilities due to current debt levels and capital needed to fund their development. Additionally, programs providing for the start-up and operational funding needed to stabilize a new facility, once built, are limited by the the already over stressed, local taxing districts. It is estimated that over 14% of rural hospitals throughout the U.S. have been lost over the past ten years and at the current pace that figure will be progressively exceeded. Simply waiting for better economic times is not an option. Read more