Dartmouth Health CEO Joanne Conroy outlines rural hospital crisis | AHA Leadership Summit

Seattle - Joanne Conroy has been sounding the alarm about the crisis in rural healthcare.

The president and CEO of Dartmouth Health, Conroy wrote that rural healthcare is at a breaking point in an op-ed earlier this year.

In an interview with Chief Healthcare Executive® at the American Hospital Association Leadership Summit Monday, she spoke bluntly about the difficulties for rural hospitals and health systems. Conroy, the chair-elect of the AHA’s Board of Trustees, sees the lack of federal support as the most ominous long-term problem for rural hospitals.

Rural hospitals are struggling with the federal government’s 2% reduction for Medicare driven by sequestration, part of federal law imposing automatic cuts to control spending. Those cuts affect all hospitals but they’re particularly troublesome for rural hospitals because it affects their cost-based reimbursement from Medicare, a critical source of funding.

“It's the difference between those hospitals being in the red or being in the black,” Conroy said, noting that rural hospitals “have incredibly slim margins.”

(See part of our conversation with Joanne Conroy in this video. The story continues below.)

Rural hospitals have long struggled financially, but more have shut down in recent years. Since 2010, 136 rural hospitals have closed, according to a report by the American Hospital Association.

Rural hospitals continue to face a serious workforce shortage, which Conroy says is a persistent problem. They continue to struggle to recruit and retain doctors and nurses. When rural hospitals are forced to turn to staffing agencies to fill a position or two, that can blow up their budgets.

If a rural hospital has to hire four or five travel nurses, it could be the equivalent cost of hiring 15 staff nurses, she says, “So that is really, really hard for them.”

Due to staffing challenges, some rural hospitals have had to stop providing some services.

“What you've seen across the country is the loss of psychiatric and labor and delivery services in rural areas across the nation,” Conroy says.

“In New Hampshire, we have some areas that have become maternity deserts, because women have to travel more than two hours to deliver their babies,” she says. “They can't afford to actually continue to offer services that lose money, their margins are so thin. So it's kind of a double whammy.”

While some may think doctors and nurses could be lured to rural areas to enjoy a lower cost of living, that’s not exactly the case. Conroy says even in rural areas, housing prices are too high for some that want to work in hospitals, she says.

“Housing has just gone up all across the country, and especially in rural America,” Conroy says. “You know, the cost of actually purchasing a home on the East Coast, in our areas, has skyrocketed. So even in rural America, it's hard for people to actually find homes and settle in towns where they can bring up their families.”

Plus, moving to a rural area means a car would be required, since there’s scant public transportation. In fact, many of Dartmouth’s employees drive an hour to work.

Rural hospitals are also struggling to find radiology techs, respiratory therapists, and phlebotomists, she said.

But Conroy says she’s most concerned about federal support for hospitals.

The hospital association says the Centers for Medicare & Medicaid Services’ proposed bumps for inpatient and outpatient care don’t match the higher costs hospitals are facing. And she notes Medicare has proposed cuts in payments to physicians, to the dismay of healthcare advocacy groups.

“I don't know what world they're living in at a federal level,” she says. “I think that's really our biggest concern. We can negotiate with the payers and we're going to figure out how to move through the workforce issues, but we are still not paid for the care we're giving for Medicare.”

Conroy points to what she calls the “stress fractures” in the healthcare system, such as patients struggling to find primary care doctors or having surgeries delayed. She says she understands why patients are irritated.

She says the more disturbing scenarios in the future could come if more rural hospitals close and people must wait longer for emergency care, because an ambulance has to travel two hours to take a patient to a hospital.

“When you can’t actually deliver that urgent emergency care to somebody that really needs it, that's what I worry about, that the healthcare system starts crumbling,” Conroy says.

And she adds, “I'm not sure that our elected officials appreciate that we could be closer to that.”

Rural hospitals should pull together and find strength in number to navigate the challenges ahead, Conroy suggests. Those efforts could involve jointly negotiating purchases or collaborating to expand patient care.

"You can come together as a consortium, and decrease a lot of your shared services costs, and work together to deliver care in your communities," she says. "We have found that that is very, very effective in New Hampshire and Vermont, and also leverages a lot of the strengths of your individual communities to deliver care close to home."