Oregon Office of Rural Health Newsletter, December 2010

ORH News

Happy Holidays from the staff at the
Oregon Office of Rural Health!

Twenty-One Oregon Health Provider Sites Receive Subsidy from Federal Communications Commission

Oregon Health Network grows number of active rural and urban health care partners to 95 who are now building Oregon's first telehealth network.

The Oregon Health Network announced that 21 additional health provider sites across the state have received a funding commitment letter from the Federal Communications Commission (FCC). Each new participant will receive subsidy money through the Rural Health Care Pilot Program (RHCPP) to fund up to 85 percent of costs to launch or enhance their respective broadband infrastructure. This brings the total to 103 health sites and educational institutions who have received funding commitments to support telemedicine and telehealth applications.

Another 62 sites are in the process of applying for the funding and seven more sites are entering the application process. Oregon Health Network's Executive Director, Kim Lamb said, "Every new OHN participant gains immediate access to the Network Operations Center and will connect to a statewide network of providers. This connection can expand or improve their clinic operations, service delivery, and referral partnerships."

Last month, the Oregon Health Network (OHN) announced a deadline of December 17, 2010 for eligible health care providers to apply for funding to connect to Oregon's first statewide broadband telehealth network.

The FCC awarded Oregon $20.2 million and the state has pledged an additional $3.8 million to be administered by OHN to build Oregon's first telehealth broadband network. “OHN's vision is to provide the best access to health care, no matter where a patient lives or a provider works in Oregon”, says Lamb.

Of the new participants, six are sites in the Silverton Hospital Network and 11 are behavioral health clinics under the Greater Oregon Behavioral Health Inc. (GOBHI) medical assistance programs. In addition, there are rural hospitals in Bandon, Burns, John Day and Klamath Falls, as well as a new clinic in The Dalles.

The Oregon Health Network will fund the remaining 15 percent cost of broadband construction and installation as part of the RHCPP. OHN's 15 percent is funded by grants from the Oregon Department of Education and the Governor's Strategic Reserve Funds.

"Each of these organizations has demonstrated a commitment to strengthening Oregon's access to health care and health education opportunities with the use of technology," Lamb says. The participating organizations will each pay the remaining 15 percent for ongoing monthly recurring costs associated with their broadband service over the duration of the 5-year program that ends in May 2014.

Oregon providers in rural and underserved areas encounter the challenge of limited availability of funding and expertise. "A lack of quality broadband access, equipment and resources can be a significant barrier for both rural and urban providers," adds Lamb. "Technologies and applications on the forefront of medicine can be challenging to integrate and implement. It is exciting that these sites now join a growing number of providers in Oregon who are providing access to care and emerging technology to provide better care for patients."

Oregon's maturing telemedicine network might enable a physician to send or receive x-ray images; a patient to visit with physicians via a live video conference for immediate care; or might capture and store video/still images and health record data to send to physicians for diagnosis and follow-up treatment at a later time. The important process of having high quality and secure electronic transfer of data can help specialists and clinicians deliver care to patients more efficiently, no matter where the hospital or the clinic is geographically located.

Oregon Health Network's $20.2 million subsidy was the fifth largest award as part of the FCC's Rural Health Care Pilot Program and provided for full deployment of the critical first phase of the infrastructure necessary to build the first statewide, broadband, telehealth network in the state. Through the RHCPP, OHN is working to bring on as many as 159 eligible hospitals, clinics, community colleges and government facilities onto its managed, high-speed, broadband network.

Nationally, $417 million has been allocated within the FCC RHCPP to subsidize hundreds of hospitals, providers and clinics representing 42 states, three territories and more than 6,000 health providers.

Kassie Clarke Leaves ORH

After five years as Community Grants Coordinator, Kassie Clarke will be leaving the ORH at the end of the year. Clarke joined the office in 2005. During her tenure, she has taken the Medicare Flexibility Grant program (Flex) and turned it into one of the nation’s top Flex programs. Kassie has focused on building the relationships between the ORH, CAHs and community and statewide partners to ensure that any program implemented by the CAHs benefits the entire community.

“We truly have benefited from Kassie being part of the ORH,” says Scott Ekblad, Director. “She has done more than just managed a grant. She has really made this program work for our state”. 

“I can't say enough about Kassie's talents, professionalism and passion for small, rural hospitals, says Julia Fontanilla, RN, MN, Tillamook General Hospital. “She has been instrumental in our network's successful focus on Patient Safety.”

“Here in Crook County, Kassie has helped us apply for so many grants that have benefited the entire community, and we'll be grateful for many years to come for her assistance, her advice and her guidance. Always helpful, cheerful and happy to see you, Kassie has been my heroine for a long time, says Sharon Vail, CHIP Coordinator, Pioneer Memorial Hospital.

Kassie truly believes in rural hospital care, and has helped Oregon CAH's improve in so many ways over the past 6 years that I have worked with her, says Suzie Bean, Mt View Hospital District. “She has been absolutely vital to the great success we have had with the TeamSTEPPS project from the beginning. She has endless energy and knowledge for getting projects like this done”.


Rural Health Track for Doctor of Nursing Practice Students

The rural health track in the OHSU School of Nursing family nurse practitioner and psychiatric mental health nurse practitioner programs sends Doctor of Nursing Practice (DNP) students to rural areas where they spend an academic year living and practicing within the community. The new program is directed by Dr. Anne Rosenfeld from the School of Nursing.

The program’s approach builds on the current model of a 3-4 week rotation in a rural setting adding a lengthier time commitment, more intense preparation, and comprehensive mentoring. Students in the rural health track will be placed alongside a rural practitioner who serves as both mentor and teacher. A faculty member is assigned to the student for additional mentorship and support throughout the nine-month clinical residency program. Additionally, students will attend seminars and collaborate with colleagues from other disciplines who are focused on rural health.

The Rural Health Track is funded by a grant from the federal Health Resources and Services Administration (HRSA) and started in 2010 with four DNP students selected to participate. Christy Ernst, RN, plans to become a family nurse practitioner and bring her acute care experience to complement her new primary care skills. Tim Neilson, FNP, currently practices in John Day and returned to OHSU to earn his clinical doctorate (DNP). Tera Roberts, RN is studying to become a family nurse practitioner to serve her home community of Vernonia. Anthony Pabst, RN, is studying to become a psychiatric mental health nurse practitioner and is passionate about new approaches toward meeting the mental health needs of rural Oregon citizens.

If you want to learn more about the program, please contact Marcella Barnes, 503- 494-0224,

Swing Bed Management for CAHs

Mary Guyot


The Office of Rural Health sponsored a swing bed training program for Critical Access Hospitals November 11 and 12, 2010. Participating hospitals learned the who, what, how and when of operating a swing-bed program. A swing-bed program requires more than simply saying “we offer swing-bed care.” It requires being comfortable with admission criteria, understanding the importance of documentation to support medical and physical rehabilitation, appropriately incorporating nurses and therapists into the interdisciplinary team, and knowing how to bill for the services. Staff also must be knowledgeable about the Centers for Medicare & Medicaid Services conditions of participation and finally it’s important to know how to grow “the business” to make it a financially viable program.

This seminar examined all aspects of swing-bed methodology, utilization and program improvement. Participants learned valuable lessons about documenting outcomes and promoting this service. Included as part of the program was a Stroudwater website specific to participants of this training. This website includes many sample documentation forms ready to be tailored to your hospital, as well as multiple resources related to swing bed. You can get addition information about the swing-bed program by contacting Mary Guyot, Stroudwater Associates, , 207-221-8260.

TeamSTEPPS—Master Trainer Workshop


The 2nd Oregon TeamSTEPPS Master Trainer course was held in Bend in October, 2010. It was sponsored by the Oregon Office of Rural Health and the Oregon Rural Healthcare Quality Network. This intense two-and-a-half day workshop provided individuals with a comprehensive review of all TeamSTEPPS concepts and practical skills which enable them to train individuals on TeamSTEPPS fundamentals including implementation of organizational change.

or Suzi Bean at .

TeamSTEPPS Training October, 2010 Lake District Team

The Lake District Hospital Team showing off their Oil Can Henry Project!

Can Hospitals Break Even with Medicare?

Elyas Bakhtiari, for HealthLeaders Media, December 13, 2010

Most hospitals lose money on Medicare. It typically only reimburses 85% to 90% of costs, and it usually takes cost shifting to private plans for a hospital to stay in the black. The equation looks like this: Take the (hopefully) positive margins from private payer business and subtract the (usually) negative margins of Medicare and Medicaid business, and what's left over, if anything, is profit.

But what if you could get that Medicare number to zero? Sure, positive margins on Medicare reimbursement would be nice, but just getting to the break-even point could have a major impact on a hospital's overall financial picture. Private payers, which generally reimburse at higher rates, suddenly become more profitable, because you're no longer relying on them to climb out of a hole.

"If you can break even on Medicare, everything else is gravy," says John Whittlesey, principal with the Healthcare Management Council.

Recently, Whittlesey was trying to get a better understanding of how one CFO's hospital Medicare finances compared to others, so he decided to run some numbers on 40 facilities across the country. Only five of them were profitable, and another 10% were near the break-even point. The vast majority was losing significant money on Medicare work.

"We were surprised that so few facilities were making money on Medicare, and not a lot of money, just 2% to 5% profitability," he says. Then he started looking for similarities. Nursing levels and other overhead and support functions didn't really stand out. The biggest difference seemed to be in ancillaries and supply utilization. "The hospitals with more success were more cost effective and had a better grasp of controlling and managing utilization," he explains.

Overutilization and waste aren't problems confined to the Medicare population, of course. But the lower reimbursements make them more pressing. In fact, that's part of CMS' gamble. If reimbursements aren't high enough for hospitals to grow comfortably, they will in theory be more motivated to trim the fat to get back to profitability.

Most organizations aren't there yet; Whittlesey's numbers show that. But they also prove that the Medicare break-even point is achievable.

The top lines
Floyd Medical Center in Rome, GA, is one of those facilities above the Medicare break-even point. Part of that is because of wide-ranging and aggressive cost-cutting efforts, from early adoption of Lean and Six Sigma improvements to aggressive management of nursing salaries and utilization control.

But it isn't totally about costs. There's room for improvement on the revenue side, though it isn't as easy to control. Part of Floyd Medical Center's success with Medicare is because of the add-on disproportionate-share payments the hospital receives for serving a low-income population, says Rick Sheerin, CFO of the 304-staffed-bed not-for-profit community hospital. A provision in this year's healthcare reform legislation could cut into those payments.

There has also been an effort in recent years, however, to grow successful service lines---those built around procedures with higher-margin Medicare reimbursements---that will offset a portion of costs, he says. The hospital has seen a boost from newly added cardiology services, for instance. Even though reimbursements for some cardiology procedures are on the decline, it is on the whole a high-margin, highly reimbursed service line.

Looking at Medicare reimbursement from the perspective of service lines has its advantages on the cost side, too. Todd Hofheins, CFO of Providence Regional Medical Center, a 372-bed hospital in Everett, WA, says dissecting the Medicare population by service line makes it easier to address utilization and supply management. For instance, he has worked with the orthopedic and total joint service lines to rein in supply costs by negotiating with vendors in an attempt to make the procedure itself more profitable.

"Medicare pushes 40% of our payer mix, so for us it's pretty important to really manage the Medicare costs of our business," he says. "One of the things we do is through our costing system, break the Medicare population into service lines, break those into diagnoses and procedures, and really get into the cost components of it."

Providence Regional Medical Center isn't making money on Medicare overall, but it has reached the break-even point in several key areas and generally hovers near the break-even point.

The forecast
The challenge of running a hospital with Medicare reimbursements is only going to grow. The Medicare trust fund is expected to be exhausted by 2029, barring any changes. The program is becoming a national financial burden and will need to be reined in to survive, which means it is possible that Medicare reimbursement levels are near their inflation-adjusted peak, for a while. In the HealthLeaders Media Industry Survey 2010, 90.4% of CFOs rated Medicare reimbursement as having primary importance to their revenue stream in the next three years. It was rated higher than any other factor.

Ironically, the Medicare-dependent hospitals of today could have a leg up going forward. Hospitals with better payer mixes can afford to improve efficiency around the margins. But an organization like Providence Regional that exists on federal reimbursements doesn't have as many cost-shifting options and has to pay more attention to cost-cutting.

Hofheins is already trying to prepare for a future environment where utilization is going to have to be reduced across the board. In particular, imaging and testing levels will have to come down, so Providence is working on patient tracking and communication strategies that will help avoid duplicating tests and procedures now. He sees tighter integration with physicians and EHR connectivity across the continuum as first steps.

"That is going to be on my mind to be sustainable in the future. I don't have a lot of individual line items in mind. A lot of the work we're doing is to create a tighter community of care," he says. "There's no single way to do it. You have to look at lots of different ways of managing it."

Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

The little-known decision-makers for Medicare physicians fees

Have you ever heard of the RUC?

If not, you are not part of the small circle of cognoscenti who know what makes the world go ’round – at least in Medicare. To enter the circle, read on.

In my post last week, I described how Medicare pays physicians for the services they render Medicare beneficiaries. In a nutshell, for a particular service (e.g., a routine office revisit or an appendectomy or a heart transplant) that we shall call Z, Medicare pays a fee calculated with this formula:



Funding Opportunities from the Rural Assistance Center (RAC)

Go to RAC Funding Database

Fair Housing Initiatives Programs (FHIP) - Fair Housing Organizations Initiative (FHOI)
Application deadline: Dec 21, 2010
Grants to build capacity, establish new fair housing enforcement organizations and/or provide fair lending enforcement in underserved areas.

Solid Waste Management Grant
Application deadline: Jan 3, 2011
Funding to determine threats to water resources; provide technical assistance to enhance operator skills in the maintenance and operation of active landfills; training to help associations reduce the solid waste stream; all in rural areas.

Section 515 Multi-Family Housing Preservation Revolving Loan Fund (PRLF) Demonstration Program
Application deadline: Jan 10, 2011
Loans to carry out a housing demonstration program to provide revolving loans for the preservation and revitalization of low-income multi-family housing.

2010 AmeriCorps National Education Award Program
Application deadline: Jan 26, 2011
AmeriCorps grants are generally awarded to eligible organizations to recruit, train, and manage AmeriCorps members who address unmet community needs.

Accessible Transportation Coalitions Initiative (ATCI)
Application deadline: Jan 31, 2011
ATCI is a one-year systems change process designed to improve accessible transportation options for people with disabilities in local communities.

Disaster Resilience for Rural Communities
Application deadline: Mar 4, 2011
This solicitation aims to advance basic research in engineering and in the social, behavioral, and economic sciences on enhancing disaster resilience in rural communities.

New Era Rural Technology Competitive Grants Program
Application deadline: Apr 15, 2011
Grants are for technology development, applied research, and/or training to develop an agriculture-based renewable energy workforce to serve rural communities.

Family Respite Care Grant
Application deadline: May 1, 2011
Funding to help alleviate the cost of respite care for families caring for loved ones with Alzheimer’s disease or a related dementia.

HUD State Community Development Block Grant (CDBG) Program
Application deadline: Applications accepted on an ongoing basis.
Funding for revitalizing neighborhoods, expanding housing, improving community facilities and services, acquiring property such as land and buildings, and improvements to property.

Public Welfare Foundation
Application deadline: Applications accepted on an ongoing basis.
Grants to provide services to disadvantaged populations in the areas of criminal and juvenile justice, health reform, and workers' rights.

Research on Rural Mental Health and Drug Abuse Disorders (R01)
Application deadline: Applications accepted on an ongoing basis.
Grants to stimulate research on mental health, HIV/AIDS and/or drug abuse problems in rural and frontier communities.

Robert Wood Johnson Foundation Local Funding Partnerships: Peaceful Pathways: Reducing Exposure to Violence (Round 2)
Application deadline: Applications accepted on an ongoing basis.
Funding for projects to reduce violence in specific communities such as those defined by race, ethnicity, tribe, gender, sexual identity or rural/frontier location.

Rural Housing Demonstration Program
Application deadline: Applications accepted on an ongoing basis.
Grants intended to increase the availability of affordable Rural Housing for low-income families through innovative designs and systems.

Section 538 Multi- Family Housing Guaranteed Rural Rental Housing Program (GRRHP) Demonstration Program
Application deadline: Applications accepted on an ongoing basis.
The Demonstration Program's purpose is to test the viability and efficacy of the concept of a continuous loan note guarantee through the construction and permanent loan financing phases of a project.

Websites & Tools

All Hazards: Resources to Help Rural Communities Prepare for Disasters and Other Hazards
Provides resources to help citizens of rural agricultural communities prepare for and recover from a number of natural and man-made threats.
Organization: Iowa State University

Health Enhancement for the Rural Elderly (H.E.R.E.)
Works to improve the health literacy, health care decision making, and self-care management of rural seniors aged 60 and above.
Organization: Montana State University - Extension

HUD Regional Economic and Market Analysis
Provides regional quarterly economic updates and responds to requests for reports and briefing materials on specific topics such as housing market conditions, affordable housing needs and homeownership trends. They provide data, advice, and recommendations to HUD underwriting staff, lenders, developers, finance agencies and state and local governments.
Organization: U.S. Department of Housing and Urban Development

Tools For Transforming Rural Mental Health Programs Into Promising and/or Evidence-based Practices
Webinar provides an overview of a technical assistance guide for promising practices in rural mental health including the strategies, methodologies, and resources needed to become evidenced based practices.
Organization: Western Interstate Commission for Higher Education