Remarks by Andy Slavitt: Meeting the health challenges of rural America

The following are the remarks delivered by CMS Acting Administrator Andy Slavitt at the CMS Rural Health Summit on October 19, 2016 in Woodlawn, MD.

Somewhere in the country right now, of the 140 million people covered by Medicare, Medicaid, CHIP or the Marketplace, someone is having a care need met. Someone is having a tumor diagnosed by an excellent technician; someone is getting affordable asthma medication for their daughter; someone is meeting with a caring nursing home staff for the first time after their father-in-law moved in. Some parent is sleeping well for the first time because they have coverage through expanded Medicaid or the Exchange.

If we could give every American the best of what the health care system has to offer, we would improve health outcomes, enhance Americans’ financial and health security, and spend our precious resources more wisely. And we would be able to keep people healthier and more comfortable as they age. And there is clear evidence that we are making progress. The uninsured rate is down to 8.3%, cut nearly in half, with 20 million newly insured Americans; medical cost trends remain at record lows; and 95 out of 100 quality measures improved nationally.

But the great black mark on our health care system are the vast disparities in the care people receive. Not everyone has access to that ideal care experience. Among other factors, where you live matters. And for the millions of Medicare Americans who live in some towns and rural counties, lifespans are shorter by two years. All of which means we need to get to work. And we have some challenges I’d like to start with, but also things to be hopeful about.

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So let me start with what I’m worried about.

For us at CMS, I always like to start with an understanding of the people we are serving. Rural health care issues are not monolithic. People in the rural South the economic challenges and poverty are dominant issues and people don’t seem to get nearly as good hospice care as people who live in the north. In rural New England, the disparities aren’t as significant but the aging of the population intensifies the needs. In the upper Midwest and Great Plains – isolation, loneliness, depression and substance abusers are prevalent. In the Mountain states, there are geographic challenges to access, and in the West, language and cultural barriers are more significant, particularly in the rural Southwest. All of which is to say, there is no “one” rural America. There are diverse issues that need airing.

There are, of course, some issues that hit all rural areas disproportionately. So forgive me for generalizing. Lower volumes, aging and limited infrastructure are real concerns and chronic disease rates and those treatment needs are higher. One significant source of coverage, care and funding aimed at addressing many of these issues is Medicaid expansion. But in almost all the states that have chosen not to expand Medicaid, they are either entirely rural or almost entirely rural. The uninsured rate in rural America is 11%+ where Medicaid has been expanded, but 14.6% where it hasn’t. Unfortunately, the impact of not expanding doesn’t end there. Insurance rates than become 7% higher and that of course has made markets less competitive and more expensive.

Workforce issues are also of great concern when I talk to physicians and community hospital executives. Approximately 10% of physicians practice in rural America, although nearly 20% of our population lives there. 65% of our health professional shortage is in rural areas. Physician assistants and nurse practitioners carry the lion share of the primary care load. This isn’t necessarily a bad thing, but we should note that in urban settings, that’s more like 8%. Access to specialists is one of the biggest challenges, and that becomes more important as the health needs of the population become more complex.

This really begins to stand out when it comes to behavioral health. With prescription drug abuse, increasing suicide rates, and the opioid epidemic taking its toll, our shortages of psychiatrists and psychologists– a problem everywhere– are deeper in rural counties. One in 8 rural counties are now without any behavioral health specialist and those that have them have between 1/3 and 1/2 of the levels of more urban areas.

We worry too about the nature of hospital economics and the impact of hospital closures. 78 rural hospitals have closed since 2010 and the obvious impact on the community is profound. And we are in need of a sustainable solution. The more remote a hospital, on average, the lower the operating margins. Other things hit the economics– higher uncompensated care due to lack of Medicaid expansion, fewer higher paying commercial payers, and continued declining utilization as we learn to take care of people in lower cost settings.

While these are real challenges, in many cases, given demographics– this is a boat we are in with you. As in some communities, it is Medicare and Medicaid that are becoming the principal financial resources. Which is why this February, we announced the formation of the Rural Health Council– to start putting together long term solutions with you.

I wanted to start with my concerns because we believe it’s important for CMS, for Cara and John and all our leaders, that we show you we understand the challenges you face. And so if we are missing something or don’t have it right, we want you to tell us.

Despite the challenges, what I believe is our best minds, working together, taking the long view give us a lot to be excited about. Will we wind back the clock to a day before these challenges exist? No. Is the answer to try to recreate what health care in rural America looked like 30 years ago? No. But just as challenges in rural America are unique, so too are the assets: the long-term relationships with patients and doctors, a care system that’s easier to navigate, and tighter communities that know how to pull together to solve problems.

Our initial focus is on access to care, the economics of care and innovations that fit right with the opportunities and needs in rural America.

And there is reason for optimism. To start with there have been great strides in access across rural community since the ACA.  The percent of uninsured adults in non-metropolitan areas decreased by 39% from 2010 to 2015. In 2016, 1.7 million people in rural areas signed up for coverage in just the Federal Marketplace states, an 11% increase from 2015– actually higher than from urban areas. And as I’m ever the optimist, there are still 19 state governors, I would dare to say virtually all of whom see the benefits of Medicaid expansion. They may have their own approaches, many of which we have shown ourselves to be open to. And they all have state legislatures to deal with, but at some point, the budget benefit, the economic benefit, and of course the benefit to state residents will be too much to pass up.

I’m also optimistic about the steps we are taking to make it easier to operate and improve the economic conditions of operating in rural communities. Our rural council is instituting a focus on elevating an understanding of the rural impact of all of our work and steps we can take to reduce burden.

Last week we announced a new initiative targeted at engaging physicians by focusing directly on burden reduction. We’ve reduced some of the restrictions on critical access hospitals, around both patient care policies and physician supervision. We’re finding places to simplify things where we can– from Meaningful Use to hospital organization flexibility to paperwork reduction and revisions to our approach to the 2 Midnights policy and auditing.

Each is a small step but there’s an increasing consciousness to reduce the burden and the cost. I know big administrative and legislative priorities remain on your list and there is always more we can do. But in addressing economics, we must have a dialogue about the longer term economics and allocation of resources in rural communities.

Mostly, I’m excited about our ability to innovate together. Telemedicine has been introduced into many of the new models in the CMS Innovation Center and advancing behavioral health through telehealth has great promise. Our innovation center is expressly focused on developing opportunities for rural care providers to find the models that will define the future. That means measures, programs, and technical assistance that are specific to local needs.

The ACO Investment Model was designed to help rural communities move down a path receiving better payment for delivering better healthcare — undoubtedly the key to managing through our economic challenges. In this rural-oriented model, we prepay shared savings to ACOs in rural areas – an oxymoron, but a clear acknowledgement that you need to invest when that’s not always easy and a sign of our willingness to invest along with you.

And in a report we released this morning indicates, for those rural hospitals that participate in value based initiatives, the results reflect many of the strengths we know are in these communities– rural hospitals perform better than urban counterparts and better on a host of safety measures.

And the Innovation Center is the key to unlocking more flexibility and finding and testing new ways at approaching opportunities to innovate. We invite your ideas so we can test them, pay for them, and grow what works. It’s what allows us to be nimble and invest alongside you.

We understand that all Americans deserve the best of the American health care system and that means tailoring solutions to the needs we see together.

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And we are excited. I can tell you that the Rural Council has brought out the passion that exists all across CMS and HHS – especially HRSA- for rural health care. The “rural road show” that John leads in the Northwest every year and the various other things that are regions do represent our desire first to listen and understand; second, to work together with you on policy responses. Our commitment is to listen and respond and make sure there is a visible, vocal forum for the issues that matter to you.

As I close I want to extend my deep appreciation for the leadership that Secretary Burwell and Acting Deputy Secretary Mary Wakefield provide. Both growing up in rural towns, in different parts of the country, they carry that responsibility in to every decision that is made across HHS.

And while she could not be here today, the Secretary did record this welcome video for us to watch right now.

Thank you. Enjoy the day. And I can’t wait to hear what comes out of today and the listening sessions to follow.

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