RURAL HEALTH

Programs included in this section are:

RURAL HEALTH ACTIVITIES

Notes:

^a The FY 07 target in the FY 08 Congressional Justification was changed to reflect a full-year continuing resolution for FY 07.

NA = FY 09: Not applicable as no funding is requested. Rural Health programs were reduced due to the investment contained in the rural provisions of the Medicare Modernization Act of 2003.

INTRODUCTION

The following long-term and annual goals and measures have been identified to use in assessing the Office of Rural Health Policy’s (ORHP) performance.  Also shown below is an efficiency measure for ORHP.  (This does not include the Black Lung and Radiation Exposure Screening programs, which will be shown later.)  These measures assess the progress in meeting the following goals:

·    Increased access to quality health care services

·    Improved access to hospital care for rural residents

These goals support HRSA’s Strategic Plan Goal IV of eliminating health disparities and the HHS Strategic Goal 2.1 of increasing health care service availability and accessibility.  The measure focused on increasing the operating margin of Critical Access Hospitals makes the link between economic viability of these facilities and their ability to continue playing an important safety-net role in isolated rural communities. The program uses performance data to improve program design and delivery.  Strategies include making revisions to program guidance to assure that performance expectations and goals are clear and to focus the attention of grantees on performance improvement and efficiency. The Program also partners with State Offices of Rural Health to provide technical assistance to grantees.

DISCUSSION OF RESULTS AND TARGETS

Long-Term Objective:  Focus resources and services on diseases and conditions with the greatest health disparities

27.1. By 2010, reduce to 13.9% the proportion of rural residents of all ages with limitation of activities caused by chronic conditions. 

(Baseline - 2000: 14.67%)

This measure was chosen because rural residents experience greater limitation of activity caused by chronic conditions than urban residents.  A reduction of activity limitation is an indicator of improvement of health status and wellness.  According to the Centers for Disease Control and Prevention, (CDC), the proportion of rural residents of all ages with limitation of activities caused by chronic conditions in FY 00 was 14.6%.  By 2010, the goal is to reduce this proportion to 13.9%.

27.IV.A.1. Increase by 1% annually the number of people served through Outreach Grants.

The Outreach grant program is an effective way to provide services to rural communities to improve health and wellness.  In FY 04 the program served 655,257 individuals. In FY 05, the program served 766,880 individuals. In FY 06, the Outreach program served 629,120 individuals, just below the target of 675,300.  (See section below on “Targets Substantially Exceeded or Not Met.”) This measure does not have a FY 09 target because the program is not proposed for funding.   

Long-Term Objective:  Increase collaborative efforts to improve the capacity and efficiency of public health and health care systems

27.2. By 2010, increase to 35% the proportion of critical access hospitals with positive operating margins.

(Baseline - 1999:  10%)

This measure is used to monitor efforts to increase the financial viability of small rural hospitals.  According to the Flex Tracking Project, 17% of Critical Access Hospitals (CAHs) were operating with positive operating margins in FY 99.  Preliminary analysis of Medicare cost-report data for CAHs shows that progress toward this goal is being made.  In FY 02, the number of CAHs with positive operating margins had increased to 29%.  As these facilities become more economically viable, they will be more likely to survive long term and therefore continue serving as a key access point for health care in rural communities.  The Rural Hospital Flexibility program, upon which this measure is based, is not proposed for funding in FY 09.

27.V.B.1. Increase by 0.5 percentage point annually the average operating margin of critical access hospitals.

This measure is important because an increase in the average operating margin of CAHs will contribute to these hospitals’ financial viability.  CAHs serve as key access points for Medicare beneficiaries in rural areas and also act as the focal point for expanded health care services in rural communities by helping to attract physicians and other health care personnel. Therefore, the focus on operating margin helps determine the long-term viability of CAHs to continue to perform that access role.  Medicare cost reports show that CAHs had a -14.05% average operating margin in 1999. Since that time, the Congress has enacted three laws that have included provisions increasing administrative flexibility for CAHs.  It is expected that these changes in the law will help address some of the financial challenges and barriers facing CAHs.  Analysis of Medicare cost report data shows positive progress toward this goal.  In analyzing cost report data for a representative selection of CAHs, these facilities are seeing improved operating margins.  In FY 05, CAHs had an average operating margin of -9.6 percent. In FY 06, the average operating margin improved to -8.8 percent.  This measure does not have a FY 09 target because the program is not proposed for funding.

27.E. Increase the return on investment of funds by the Rural Hospital Flexibility (FLEX) grant program, as measured by change in total operating margin of critical access hospitals in relation to FLEX dollars invested.

This efficiency measure indicates the return on investment of funds by the Rural Hospital Flexibility grant program as measured by the change in total operating margin of critical access hospitals in relation to the investment of Flex program dollars.  The measure looks at the change in total operating margin for all CAHs from one year to the next relative to the programmatic investment that is specifically focused on finance-related activities to yield a percentage that quantifies return on investment annually.  In FY 04, the baseline year, the return on investment was 23.36 percent.  The return on investment in FY 05 was 14.8 percent, which is below the target of 24 percent but still indicative of a positive return on investment for the program. The reduction in overall return on investment may fluctuate year to year as rural hospitals experience significant variability in their patient volume and revenue but these factors tend to balance out to some degree over time.  This measure does not have a FY 09 target because the Rural Hospital Flexibility program is not proposed for funding.

The Office of Rural Health Policy is looking at a range of options for a new efficiency measure.  New performance data will be collected.  Initial data measurement and analysis will take place in FY 08 and an assessment of the potential for a new efficiency measure will be done after this analysis takes place.

TARGETS SUBSTANTIALLY EXCEEDED OR NOT MET

Measure: Increase by 1% annually the number of people served through Outreach Grants.

FY 06 Target:  675,300

FY 06 Result:  627,120

The difference between the target and results in FY 06 is due to rising health care costs that have occurred at the same time that the program funding has remained level.  One step taken to align targets and performance was to assess targets and adjust them in light of past performance and anticipated resources.  In addition, the program is assessing targets and results to determine if they fully reflect the broad range of direct service delivery programs under this authority.  The impact of this result is that fewer persons than anticipated had access to care through this program.

RURAL HEALTH POLICY DEVELOPMENT

INTRODUCTION

This measure assesses how productive the Office is in producing research reports that informed its policy activities. The research reports produced by the Office play a key role that inform HRSA, HHS and others about the impact of health care policy on rural communities.

This performance measure supports HRSA’s Strategic Plan Goal V of improving the public health and health care systems by using trend data to assist in targeting program resources toward goals.  The performance measure also supports HHS Strategic Goal 4 of supporting scientific research.

DISCUSSION OF RESULTS AND TARGETS

Long-Term Objective:  Utilize trend data to assist in targeting program resources toward goals

28.V.A.1. Conduct and disseminate policy relevant research on rural health issues.

The program produced 30 research projects in FY 06 and FY 07, exceeding the targets.  The increase in the number of studies over 04 is due to an expanded work as a result of a new program that funds single-year research awards and an expansion in the number of research centers funded from six to eight beginning in FY 05.  In FY 09 the target will remain at 30.

The 30 reports in FY 07 represented a full range of rural health services projects with a particular focus on issues connected to the implementation of the provisions in the Medicare Modernization Act of 2003, most notably the potential rural implications and benefits of the new Medicare prescription drug benefit and the transition toward offering more health coverage options under Medicare Advantage.  The studies also continue to examine the sustainability of small rural hospitals, including their low volume, and assuring quality through improving patient safety and reducing medical errors. Through the policy research, ORHP expects to predict the impact of the payment reforms on rural citizens, their hospitals and communities and, most importantly, to identify options for changes to lessen any negative effects while also identifying positive outcomes of the MMA provisions for increasing services for rural Medicare beneficiaries.  Other ongoing reports inform the policy discussion on improving the health of rural citizens by ensuring access to health promotion programs, rural health clinics, and mental health care.  The FY 09 target is 30 reports.

RURAL HEALTH OUTREACH AND NETWORK DEVELOPMENT GRANTS

INTRODUCTION

This measure assesses how well the grants administered under this authority affect rural residents.  The various grant programs administered under this authority focus on a range of health issues from improving access to care to recruitment and retention of health care providers to improved coordination of services.  The measure focuses on how many rural residents are served by the program.  The measure supports HRSA’s Strategic Plan Goal IV of eliminating health disparities.  The performance measure also supports HHS Strategic Goal 1 of improving the safety, quality, affordability and accessibility of health care, including behavioral health care and long-term care.  Providing improved guidance and information to grantees on performance expectations and technical assistance to grantees are strategies used to improve performance.

DISCUSSION OF RESULTS AND TARGETS

Long-Term Objective:  Focus resources and services on diseases and conditions with the greatest health disparities

29.IV.A.1. Increase by 1% annually the number of people served through Outreach grants.  

The Outreach grant program is an effective way to provide services to rural communities to improve health and wellness.  In FY 04 the program served 655,257 individuals. In FY 05, the program served 766,880 individuals. In FY 06, the Outreach program served 629,120 individuals, just below the target of 675,300.  (See section below on “Targets Substantially Exceeded or Not Met.”) This measure does not have a FY 09 target because the program is not proposed for funding.   

TARGETS SUBSTANTIALLY EXCEEDED OR NOT MET

Measure: Increase by 1% annually the number of people served through Outreach Grants.

FY 06 Target:  675,300

FY 06 Result:  627,120

The difference between the target and results in FY 06 is due to rising health care costs that have occurred at the same time that the program funding has remained level.  One step taken to align targets and performance was to assess targets and adjust them in light of past performance and anticipated resources.  In addition, the program is assessing targets and results to determine if they fully reflect the broad range of direct service delivery programs under this authority.  The impact of this result is that fewer than anticipated had access to care through this program.

RURAL HOSPITAL FLEXIBILITY GRANTS

Notes:

^a The FY 07 target in the FY 2008 Congressional Justification was changed to reflect a full-year continuing resolution in FY 07.

INTRODUCTION

These measures assess the performance of the Office’s rural hospital grant programs.  The various grant programs administered under this authority focus on working with the grantees to assist Critical Access Hospitals and the communities they serve.  The measures focus on increasing the annual operating margin, assisting hospitals in the conversion to CAH status and the formation of networks of care involving CAHs.  Providing improved guidance and information to grantees on performance expectations and technical assistance to grantees are strategies used to improve performance.

These performance measures supports HRSA’s Strategic Plan Goal V of improving the public health and health care systems by increasing collaborative efforts to improve the capacity and efficiency of public health and health care systems.  The performance measure also supports HHS Strategic Goal 1 of improving the safety, quality, affordability and accessibility of health care, including behavioral health care and long-term care.

DISCUSSION OF RESULTS AND TARGETS

Long-Term Objective:  Increase the collaborative efforts to improve the capacity and efficiency of public health and health care systems

30.V.B.1. Increase by 0.5 percentage point annually the average operating margin of critical access hospitals.

This measure is important because an increase in the average operating margin of CAHs will contribute to these hospitals’ financial viability.  CAHs serve as key access points for Medicare beneficiaries in rural areas and also act as the focal point for expanded health care services in rural communities by helping to attract physicians and other health care personnel. Therefore, the focus on operating margin helps determine the long-term viability of CAHs to continue to perform that access role.  Medicare cost reports show that CAHs had a -14.05% average operating margin in 1999. Since that time, the Congress has enacted three laws that have included provisions increasing administrative flexibility for CAHs.  It is expected that these changes in the law will help address some of the financial challenges and barriers facing CAHs.  Analysis of Medicare cost report data shows positive progress toward this goal.  In analyzing cost report data for a representative selection of CAHs, these facilities are seeing improved operating margins. In FY 05, CAHs had an average operating margin of -9.6 percent. In FY 06, the average operating margin improved to -8.8 percent.  This measure does not have a FY 09 target because the Rural Hospital Flexibility Grant program is not proposed for funding.

30.V.B.2. Appropriate rural facilities will be assisted in converting to Critical Access Hospital (CAH) status to help stabilize their financial status.

Conversion of appropriate rural facilities to CAH status will help sustain the rural health care infrastructure to provide access to high quality care for rural Medicare beneficiaries.  This is a core component of the Flex program.  Meeting statutory requirements for certification and Conditions of Participation for CAHs enables the facility to be reimbursed on the basis of reasonable cost.  This demonstrably improves financial performance of these most vulnerable facilities, thereby sustaining access.

Conversion-related activities have been a major emphasis of the program. As the program has matured, additional emphasis has been placed on quality and performance improvement, improving existing CAH operations, and development of community-level collaborative relationships (including EMS) which strengthen rural healthcare.  The program expects the potential growth in the number of conversions to slow in the coming years with the total universe of conversions expected to peak at approximately 1,300. There were 1,277 CAHs in FY 06 and 1,282 in FY 07, exceeding the target in both years.  This measure does not have a FY 09 target because the Rural Health Hospital Flexibility program is not proposed for funding.

30.V.B.3. Facilities and communities will be assisted in the development of networks.

Building relationships between CAHs and other providers is a critical component of infrastructure and systems development to sustain viable delivery capability in rural communities.  Network development is promoted to reduce duplication, reduce overhead costs, improve services and improve quality of care.  In FY 06, ORHP exceeded its target goal of 1,250 by assisting 2,326 facilities/communities in the development of networks. As the total number of CAHs reaches its expected peak at just over 1,200, the program emphasis is moving more toward network development activities.  As a result, the number of facilities and communities assisted in network development is increasing and the FY 07 target reflects that.  This measure does not have a FY 09 target because the Rural Health Hospital Flexibility program is not proposed for funding.

STATE OFFICES OF RURAL HEALTH

INTRODUCTION

The measures are used to assess the performance of the Office’s investment in the 50 State Offices of Rural Health.  The program provides matching grants to each of the 50 States to support the ongoing efforts of creating a single point of contact within the State for rural health issues.  The performance measures focus on two key activities of the grantees.  The first looks at how many communities receive technical assistance from the grantee.  The second looks at how many States have identified a focal point for the recruitment and retention of health professionals in rural areas which has long been an important need for rural communities.  The program uses an annual grantee meeting to focus attention on performance expectations and to provide a forum for grantees to share approaches used to improve performance.

These measures support HRSA’s Strategic Plan Goal V of improving the public health and health care systems by increasing the collaborative efforts to improve the capacity and efficiency of the public health and health care systems.  The measures also support HHS Strategic Goal 1 of improving the safety, quality, affordability and accessibility of health care, including behavioral health care and long-term care.

DISCUSSION OF RESULTS AND TARGETS

Long-Term Objective:  Increase collaborative efforts to improve the capacity and efficiency of the public health and health care systems.

31.V.B.1. Increase the number of communities receiving technical assistance from a State Office of Rural Health.

This measure is important because rural communities and providers are often isolated and have unique technical assistance needs.  By providing this technical assistance, a State Office of Rural Health (SORH) is equipping rural communities with the tools and resources needed to coordinate rural health at the local level.  The SORH enables a community to create localized solutions to problems which in turn strengthens the rural health delivery system one community at a time.  This goal reflects one of the program’s core functions.  The program established a baseline of 4,120 communities in FY 03.  In FY 06, the State Offices of Rural Health provided technical assistance to 4,699 rural communities exceeding the target of 4,450.  The FY 09 target for the number of communities receiving technical assistance is 4,775.   The FY 09 target for number of States that have a focal point for recruitment is 49.