General Surger y Contributes to the Financ ial Health of Rural Hospit als a nd Communities Brit Doty, MPHa, Steven J. Heneghan, MDb,*, Randall Zuckerman, MDa,c KEYWORDS Surgery Rural Economic contribution
It is intuitively recognized that rural residents benefit from access to local surgical care, but that rural hospitals may also profit from providing surgical services is less commonly acknowledged. Confirming this impression, most rural hospital administrators surveyed for several research studies perceived the ability to provide surgical care as very important to the financial viability and stability of their institutions.1–3 Little research has been conducted that examined or quantified the specific economic contribution that a general surgeon or surgical services make to rural hospitals and communities. This article outlines what is known on this topic and focuses on the economic impact that surgical care delivery can have on rural hospitals and communities and the potential costs associated with not having a general surgeon or surgical services available at rural hospitals. The authors also discuss the financial limitations that rural hospitals face in providing surgical care and the economic impact of variations in the delivery of surgical care in different types of rural communities. In addition, questions for future research in this area are identified. Rural hospitals provide valuable health care services for their communities while facing unique challenges, including coping with limited financial and human resources, as they respond to varying patient needs and expectations. Although the ability to offer a broad range of services may strengthen a rural hospital’s financial condition, it can
Funding for the Mithoefer Center and this article was received from the Robert Keeler Foundation. a Mithoefer Center for Rural Surgery, Bassett Healthcare, One Atwell Road, Cooperstown, NY 13326, USA b Department of Surgery, Bassett Healthcare, One Atwell Road, Cooperstown, NY 13326, USA c Department of Surgery, Hospital of Saint Raphael, 1450 Chapel Street, New Haven, CT 06511, USA * Corresponding author. E-mail address:
[email protected] (S.J. Heneghan). Surg Clin N Am 89 (2009) 1383–1387 doi:10.1016/j.suc.2009.07.008 surgical.theclinics.com 0039-6109/09/$ – see front matter ª 2009 Elsevier Inc. All rights reserved.
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be difficult to provide extensive medical or surgical services on a small, restricted budget. Many rural hospitals, especially those located in small, isolated communities, also struggle to attract and retain qualified staff to deliver medical and surgical care.4 Patients and their families often prefer to be treated locally, including undergoing surgical procedures, to avoid the added costs and loss of social support that often result when they must travel to a distant regional medical center for surgical care.5 Rural hospitals are diverse institutions, and therefore each will have a unique capability to derive economic returns from providing surgical services. The approach to delivering surgical care in rural America varies depending on several factors, including town and service area population, location or proximity to other health care centers, availability and quality of local medical services, community demands and expectations, and the local hospital management’s goals.6 In some cases, a rural hospital may choose to employ a general surgeon directly or grant hospital privileges to a local surgeon who is in solo or group practice. When no surgeon is available locally, the hospital may need to be creative in developing a model to provide surgical care based on its community’s unique requirements. This could include any of the following strategies: bringing in general and/or subspecialty surgeons on a regular schedule (or as needed) or using locum tenens surgeons for temporary, ongoing, or on-call coverage.7 Each of these options has the potential to contribute to a rural hospital’s financial health; however, any one option may be more appropriate for a particular hospital, depending on the local situation. Rural hospitals can derive economic benefits directly and indirectly from the provision of surgical services. A substantial amount of income can be generated directly from surgical procedures that are performed at the local hospital. An examination of billing data conducted in a 1992 Washington State study found that surgical services accounted for 43% of inpatient charges at the state’s rural hospitals.8 In addition, those rural hospitals that had at least 1 general surgeon billed a mean of $1.5 million for surgery. In a rural hospital in southeastern Oregon, over the course of a 2-year period (from 2004 to 2005) the overall hospital revenue increased (by 3.9% and 8.9%, respectively) after the hiring of a full-time general surgeon.4 According to the hospital auditor, approximately one-third of this increased revenue was derived directly from surgical services. In addition, revenue from associated departments, such as radiology, laboratory, and pharmacy, also increased during this time frame. Providing surgical services can also increase the amount of income that a rural hospital is able to generate by expanding surgery-related services, such as critical care, obstetrics, and trauma. Adding or expanding services that are linked to surgery may ultimately require rural hospitals to hire new staff to increase operating capacity and to attract more patients. This expansion of workforce produces a significant benefit to the local economy. Rural communities can also derive substantial economic benefits when the local hospital provides surgical services. The health care sector as a whole significantly affects a rural community’s economy in various ways. Health care institutions attract external capital as part of the local economic base. They play a role in recruiting associated businesses and employees, and the purchases made by the institution and its employees add dollars to the local economy.9 According to a 1997 review of the literature on this subject, the health care sector often contributes (through direct and indirect effects) 15% to 20% of a total community’s employment and income.10 Specifically, hospitals and other health care providers are often one of the largest employers in rural towns along with the government and the education sector. Expanding the number of staff in areas related to surgery, such as nursing and technical operating room positions, can generate added income for the hospital. Rural hospitals
Financial Health of Rural Hospitals & Communities
and their employees have considerable spending power in rural communities and play a large role in supporting local businesses. A financially strong local hospital that offers a wide range of health care services is also an important yet often overlooked factor in attracting and retaining new businesses, retirees, and workers to a rural community.9 In addition to the financial benefits for rural hospitals and communities, there are real costs associated with not having a general surgeon or surgical care available at a rural hospital. Transportation to tertiary care centers for services that could be provided locally if a general surgeon was available is expensive, time consuming, and potentially life-threatening for critically ill patients. In an example from rural southern Arizona, up to 10 emergency patients per month have been flown more than 80 miles to Tucson at a cost of $14,000 per flight since the hospital lost its surgeons.11 Rural patients and their families who are required to travel for surgical care can incur substantial financial costs and suffer the emotional consequences of being separated from their loved ones during a stressful time. Without the ability to deliver surgical care, a rural hospital may have to turn away obstetric and emergency cases that rely on surgical backup, potentially leading to greater financial losses. General surgeons often perform most endoscopic procedures, such as colonoscopies, in rural areas where no gastroenterologist is available. If patients are required to travel to regional medical centers for this type of care, bypassing their local rural hospital, they may end up receiving other health care services in the regional centers, thus further draining business. This can lead to the local hospital acquiring a negative reputation as not being able to meet its community’s needs, which is a difficult barrier to overcome.12 General surgeons and the services they deliver make a significant financial contribution to the health and stability of rural hospitals and communities, whereas the costs incurred when rural residents lack access to local surgical care are great. An ongoing shortage of rural general surgeons, especially in smaller, more isolated regions, makes it difficult for many rural hospitals to provide these services. According to the data published by Thompson and colleagues13 in 2005, the surgeon to population ratio in small, isolated rural areas was 4.67 per 100,000 compared with 6.53 in urban areas and 7.71 in large rural areas. The results of this study also showed that the average age of surgeons practicing in small rural areas is more than 50 years, suggesting that many will be retiring within the coming decade. One-third to one-half of the surveyed rural hospital administrators stated that they were actively seeking a general surgeon. Their experience shows that recruiting and retaining a qualified general surgeon to practice in a rural hospital is a difficult process, often taking a year or more to accomplish.1 Once in rural practice, general surgeons often face significant financial challenges (often including reimbursement at lower rates than their urban counterparts), long work hours, and frequent on-call responsibility that may not be adequately compensated. An option that is becoming more common is for rural hospitals to hire surgeons and pay them a salary to cover many of the expenses that can be difficult to manage in solo rural surgical practice. Hospitals could also benefit from this arrangement by ensuring that they have a stable income from services delivered directly and indirectly as a result of having the surgeon on staff.14 Within rural surgery, financial issues have been understudied, resulting in the need for more research on this subject. Few concrete data exist that quantify the economic contribution of a general surgeon to a rural hospital or community. Some available evidence demonstrates the financial value that physicians contribute to local rural hospitals and communities. According to research conducted by the National Center for Rural Health Works at Oklahoma State University, the financial impact made by a typical primary care physician in rural Oklahoma is more than $1 million in direct
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revenue and more than $720,000 in direct income to a local clinic and hospital.15 In addition, 12 jobs at the clinic and hospital are created as a result of the business generated through the primary care physician’s practice. This type of study must be done to confirm the anecdotal information that shows the significant financial impact that general surgeons have on rural hospitals and communities. Determining which practice models are most financially advantageous for rural surgeons and hospitals is another important area for further study. Another important question to consider is which surgical procedures general surgeons should be performing in rural hospitals. The typical rural surgeon has a broader case mix than her urban counterparts,16 and some have argued that with minimal added training, rural general surgeons could perform more than 70% of all inpatient operations at rural hospitals.17 The capability of a rural hospital to offer the widest possible range of surgical procedures to meet the needs of its residents would seem desirable. From a quality assurance standpoint, however, some might argue that certain lower-volume, more complex procedures should not be done at rural hospitals. A study examining inpatient hospitalizations at rural hospitals in New York State found that there would be minimal financial impact for rural hospitals if most high-risk procedures were referred to regional hospitals.18 Answers to these and other related questions should allow rural hospitals and communities to work toward developing strategies for offering surgical care in their areas. Although managing the logistics associated with providing surgical care in the rural setting is complex and may seem daunting in some cases, the financial benefits and equality of patient access resulting from this service are immeasurably valuable to rural patients, hospitals, and communities. REFERENCES
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