Office of Rural Health Aids Rural Oregon Hospitals Thanks to Federal Grant

02/21/01    Portland, Ore.

Rural Oregon hospitals got a financial shot in the arm recently thanks to a new $600,000 federal grant given to Oregon Health Sciences University. The funds, awarded to OHSU's Office of Rural Health are being used to create Oregon's Critical Access Hospital Program, which is intended to help rural communities maintain their hospital services.

Four hospitals already have converted to Critical Access Hospital designation:

  • Samaritan North Lincoln Hospital, Lincoln City
  • Cottage Grove Hospital, Cottage Grove
  • Providence Seaside Hospital, Seaside
  • Southern Coos Hospital, Bandon

This federal initiative, part of the Balanced Budget Act of 1997, created a new hospital designation, the Critical Access Hospital (CAH). The hospitals in the program receive cost-based Medicare reimbursement for inpatient and outpatient services.

A larger percentage of rural hospitals rely on Medicare payments because rural populations are older than in urban areas, according to the most recent Health Care in Rural Oregon report.

The hospitals' costs usually exceed what they are reimbursed by Medicare, said Scott Ekblad, Critical Access Hospital Program manager in the Oregon Office of Rural Health.

"Larger, urban hospitals can spread these costs out. But small, rural hospitals have fewer patients and a higher percentage of Medicare patients. This program can literally keep the local hospital from closing its doors in some rural Oregon communities," he said.

Cottage Grove Hospital closed in 1998 and reopened about a year later, thanks in part to Oregon's Critical Access Hospital program, Ekblad said. The Office of Rural Health's CAH program can help each of the eligible 34 rural Oregon hospitals determine whether it would be beneficial for them to become part of this program.

The CAH program can provide hospitals with technical assistance such as financial feasibility studies, community development projects, assessment of quality assurance programs and emergency medical service improvements.

A hospital, in general, is considered rural by this grant's definition, if it is located 35 miles from another hospital, or 15 miles in mountainous terrain or areas with secondary roads.

The grant will continue for three more years. Each year the Office of Rural Health must reapply for funding from the Federal Office of Rural Health Policy. OHSU's grant is part of a $25 million national package.