Press Release

OVERVIEW

Individuals living in rural and isolated areas face special challenges in receiving timely, quality health care. These areas often suffer from shortages of physicians and other health care providers, and the costs of providing quality health care in a rural health infrastructure can extend beyond available resources. The Department of Health and Human Services (HHS) is working to identify solutions to the unique health care challenges that confront rural America.

HHS agencies serve the health needs of rural Americans through programs to strengthen the nation's overall rural health care system. The department encourages health care professionals to serve in rural areas, funds community and migrant health centers to help underserved communities, and supports rural hospitals and state-level coordination and planning to improve and strengthen the rural health infrastructure. HHS also supports initiatives designed to address the special needs of minorities living in rural America and supports advances in technology to rapidly bring health services to people in isolated areas. Finally, the department conducts policy research to investigate how the federal government can work with partners on the national, state and local levels to develop and enhance solutions to the challenges of rural health.

HHS Secretary Tommy G. Thompson has made rural health a priority for the department. In 2001, he created an HHS Rural Task Force to identify how HHS programs can be strengthened to better serve rural communities. In addition, President Bush's fiscal year 2003 budget invests greater resources in community health centers, which are frequently relied upon by families in rural communities to provide needed health care services.

BACKGROUND

Of the 70 million rural Americans, more than 20 million rural residents have inadequate access to health care services. According to HHS' Agency for Healthcare Research and Quality, almost one in three adults living in rural America is in poor to fair health. Nearly half of rural Americans have at least one major chronic illness, yet rural residents average fewer physician contacts per year than those in urban communities. In addition, rates of alcoholism and drug abuse are the same as in urban areas. The serious lack of mental health and substance abuse professionals, community-based services and infrastructure means that, in rural areas, individuals with a mental or substance abuse disorder often go undiagnosed and untreated.

Shortages of health facilities, physicians, nurses and other health care professionals in rural and isolated areas can result in individuals forgoing preventive medicine and necessary health treatment. Coupled with these shortages is the reality that many rural Americans face increased health problems associated with poverty, including high rates of chronic disease and infant mortality.

HHS is addressing the special challenges associated with providing health services to residents of rural and isolated areas by working to improve and strengthen the health care delivery infrastructure in rural America.

HHS PROGRAMS TO PROTECT RURAL HEALTH

HHS' Office of Rural Health Policy (ORHP), located within the Health Resources and Services Administration (HRSA), has primary responsibility for coordinating the department's efforts to support, sustain and enhance local health care delivery systems in rural areas. Programs administered by ORHP, as well as other HRSA bureaus and HHS agencies, provide research and technical assistance, education and placement of health professionals, and funding opportunities to improve rural health care. More information on ORHP and HRSA can be found at: http://www.ruralhealth.hrsa.gov and at http://www.hrsa.gov.

In addition, HHS programs work to meet the health needs of racial and ethnic minorities in rural areas, to address substance abuse and mental health problems frequently untreated in rural areas, and to research and promote the use of new technologies to improve access to health care services.

IMPROVING THE PROVISION OF SERVICES AND STRENGTHENING THE RURAL HEALTH INFRASTRUCTURE

Encouraging health providers to serve in rural areas. HRSA administers the National Health Service Corps (NHSC), a program created in 1970 to fill a need for primary care clinicians in rural communities and inner-city neighborhoods designated by the department as health professional shortage areas. The NHSC encourages health professionals to spend all or part of their careers serving the nation's neediest people; about 60 percent of the nation's 2,400 NHSC clinicians serve in rural areas. The Corps offers student experiences, mentoring, scholarships and repayment of student loans in return for providing service in underserved areas.

President Bush's fiscal year 2003 budget strongly supports the NHSC, providing a $44 million increase to raise the program's funding to $192 million.

In addition, HRSA targets efforts to strengthen the nursing workforce in rural areas by supporting six demonstration projects in schools of nursing to facilitate baccalaureate education of nurses in rural areas through distance learning.

Funding health centers in rural America. HRSA funds more than 3,400 community and migrant health center (CHC) sites across the nation; 47 percent of health center patients are in rural areas. The community and migrant health center program provides access to family-oriented preventive and primary health care services for people living in medically underserved communities.

In early 2001, President Bush announced a five-year initiative to increase the number of CHC access sites and expand existing sites in order to meet the continuing need for primary care, oral health, mental health, substance abuse treatment, outreach, respite care and pharmacy services. The President's fiscal year 2003 budget includes nearly $1.5 billion for CHCs, an increase of $114 million over 2002 and a $280 million increase over fiscal year 2001. His five-year plan would expand the number of Americans served at CHC sites to 16.6 million by 2006.

Targeting efforts to strengthen rural hospitals. In fiscal year 2001, ORHP launched a three-year effort to help improve the performance and financial stability of more than 90 rural hospitals in the Delta region -- which covers 200 rural counties in Alabama, Arkansas, Illinois, Kentucky, Louisiana, Missouri, Mississippi and Tennessee. ORHP has developed a "tool chest" of written materials that rural hospitals can use to assess and improve their own performance in a number of different areas, such as cost accounting, medical practice management, quality of care and recruitment and retention of staff. The initiative also gives HRSA responsibility for exploring ways to help rural hospitals gain access to new sources of capital.

Supporting state offices to improve rural health care systems. ORHP administers a matching grant program that has enabled the creation of State Offices of Rural Health in all 50 states. Each office's mission is to help rural communities build stronger health care delivery systems by collecting and disseminating information, providing technical assistance, helping to coordinate rural health interests statewide, and supporting efforts to improve recruitment and retention of health professionals.

Tailoring the Medicare program to meet rural needs. The Medicare program, administered by HHS' Centers for Medicare & Medicaid Services (CMS), is the nation's largest health insurance program, providing health coverage to people age 65 and older and to individuals with disabilities. About one in four Medicare beneficiaries lives in rural America, and rural providers serve a critical role in areas where the next nearest provider may be hours away. Rural providers operate on thinner financial margins than their urban counterparts and also face difficulty maintaining enough patients to cover their costs. As a result, Medicare has special payment adjustments designed to address those concerns.

Because of the special challenges that rural health care providers face, a rural hospital can qualify for enhanced Medicare payments under certain conditions: if it is Medicare dependent (meaning that a specified percentage of its patients rely upon Medicare health coverage); if it is the sole hospital for a defined geographic area; or if it is designated by CMS as a Critical Access Hospital. Rural Referral Centers, which must meet bed size and/or volume, case mix and staffing requirements, also are eligible for preferential treatment in the form of sometimes higher disproportionate share hospital payments and less stringent standards for geographic reclassification than other rural and small urban hospitals. In addition, rural health clinics - clinics certified under federal law to provide care in underserved areas - receive favorable reimbursement for covered services provided to Medicare beneficiaries. Finally, under the Medicare Incentive Program, physicians who treat Medicare beneficiaries in health professional shortage areas receive a 10 percent bonus in their Medicare reimbursements.

Administering grant programs that support local improvements in rural health. HHS offers grant programs administered by ORHP to help strengthen the health infrastructure in rural and isolated areas:

* The Rural Health Services Outreach grant program will award $51.5 million in fiscal year 2002 for demonstration projects to strengthen fragile rural health services. Rural communities have used the grants to create hospice care, establish school health clinics, provide prenatal care, train paramedics and otherwise serve rural communities.

* The Rural Health Network Development grant program will provide $16.8 million in fiscal year 2002 to help rural providers form partnerships and share resources in formal, integrated health care networks. This program's goals include promoting financial sustainability and improved quality and making a broad range of services available to rural citizens in their own communities.

* The Rural Hospital Flexibility Program will provide $40 million in grants in fiscal year 2002. This includes $25 million in grants to states to work with rural communities to develop stronger systems of care. This is done by helping communities: decide which hospitals might benefit from conversion to Critical Access Hospital status; build rural health networks that include referral links to other hospitals; integrate emergency medical services; and improve quality of care. The remaining $15 million is part of a special initiative to help small rural hospitals address issues related to payment and billing, compliance with new privacy requirements and to improve quality and reduce medical errors.

* Directing efforts to meet women's health needs. HRSA's Office of Women's Health and ORHP are coordinating a rural women's health strategy to address the health needs of rural women. One component of this strategy under development is to support coordination between state offices of rural health, women's health and minority health to improve access to services for all women. Another priority is analyzing data about women's health in rural communities in order to better target services to meet the needs of women.

Recognizing the special health needs of minorities in rural areas. Minorities comprise 15 percent of the total rural population but account for 30 percent of the rural poor population. Minorities living in rural areas may face a wide range of problems from chronic poverty, to a lack of stable medical care for migrant workers, to language barriers faced by newcomers to this country. HHS has developed a number of programs and initiatives to address the special needs of minorities in rural areas:

* The department's Office of Minority Health funds the Promoting Health Care Access to Rural and Isolated Asian American and Pacific Islander Communities project to identify emerging but isolated Asian American and Pacific Islander communities and develop strategies to link these communities to culturally and linguistically appropriate health care services.

* Over the past six years, 20 percent of Rural Health Services Outreach Grant Program funds have been targeted to rural minority communities.

* HHS' Indian Health Service (IHS) operates a comprehensive health service delivery system for approximately 1.5 million of the nation's 2.5 million American Indians and Alaska Natives. Many of the individuals served through IHS programs live in rural areas. The IHS health system consists of 49 hospitals, 226 health centers, 170 Alaska Native village clinics, 123 health stations, 11 residential treatment centers and 34 urban health programs.

* Focusing on substance abuse and mental health needs. HHS' Substance Abuse and Mental Health Services Administration (SAMHSA) has supported a range of activities to improve the availability and quality of substance abuse and mental health services in hard-to-serve rural areas.

* Approximately 20 percent of the $1.7 billion Substance Abuse Prevention and Treatment Block Grant is directed by states to services for people in rural areas, including tribal populations. SAMHSA recently instituted a program to support the adoption of exemplary services to serve people in rural areas now experiencing addiction problems involving prescription drugs such as OxyContin. SAMHSA has also joined with the National Health Service Corps in co-sponsoring summits on integrating mental health, substance abuse and primary care services, targeting rural states and communities. The agency also has published a number of products with a focus on rural populations, including Rural Mental Health: 2000 and Beyond and Disaster
Mental Health: Crisis Counseling Programs for the Rural Community. Finally, SAMHSA provided funding to develop the Center for Support of Mental Health Services in Isolated Rural Areas at the University of Denver and provides outreach services to rural families to increase access to and use of mental health and substance abuse services.

Researching and supporting technology to improve rural health. Distance can be a substantial barrier preventing residents of rural and isolated areas from accessing the care they need. A number of HHS agencies are working to increase access to health services for rural residents through the support and development of telemedicine:

* In 1998, HRSA established its Office for the Advancement of Telehealth to expand the agency's telemedicine and distance learning programs and extend state-of-the-art health care and information to the nation's most isolated and poorest communities. In addition, SAMHSA has worked with HRSA to provide distance learning programs focusing on mental health and illness for clinicians working in rural areas.

* The National Library of Medicine at NIH has awarded 19 multi-year telemedicine projects that will serve as models to evaluate the impact of telemedicine on cost, quality and access to health care.

* The Medicare program provides reimbursement for some telehealth services in rural and underserved areas. In addition, CMS is sponsoring a number of demonstration projects designed to determine the potential of telehealth to provide quality, cost-effective services.

CONDUCTING RURAL HEALTH POLICY RESEARCH AND COORDINATION

In addition to providing funding and technical assistance to directly improve the rural health system infrastructure, agencies within HHS conduct policy research to identify and develop solutions to the influences negatively impacting rural health. ORHP provides focus to the department's rural health policy research and promotes coordination and cooperative efforts across the federal government and with the private sector:

* ORHP staffs the National Advisory Committee on Rural Health, a 16-member citizen panel of national health experts that makes annual recommendations to the HHS Secretary for specific rural health care strategies.

* ORHP reviews CMS' Medicare and Medicaid regulatory proposals that have a potential impact on rural providers and beneficiaries to offer comments and suggestions on how they may be improved.

* ORHP sponsors research on rural health services through the Rural Health Research Center Program. As the sole federally sponsored research centers with a rural-only focus, these centers study critical concerns facing rural communities in their quest to secure adequate, affordable, high quality health services. The findings are used to educate a wide audience of national, state and local decision-makers concerned with rural health issues. Six centers have cooperative agreements with ORHP for fiscal years 2001-2004.

* ORHP supports a rural health information center. This free service provides customized responses to inquiries about rural health projects, federal grant programs, rural economic development and conferences. Information is available at http://www.ruralhealth.hrsa.gov.
In addition to policy work conducted through ORHP programs, HHS' Agency for Healthcare Research and Quality (AHRQ) supports and conducts research into key health care issues facing rural Americans. This research covers such issues as access to care, supply of primary care physicians and other health care providers, health promotion and disease prevention, health care technology, organization of services for vulnerable rural populations, and patient choice and the rural hospital. This research program was highlighted as an important priority for AHRQ in the 1999 legislation reauthorizing the agency. More information on AHRQ programs is available at http://www.ahrq.gov.

Finally, to more effectively understand the special circumstances of rural providers and beneficiaries, in 2001 CMS launched a Rural Health Open Door Initiative. Under this initiative, CMS representatives host monthly meetings with rural providers to discuss and review the impact of Medicare and Medicaid regulations on rural health. CMS continues to work closely with ORHP and the private National Rural Health Association to pursue a variety of efforts to understand the impact of Medicare and Medicaid policies on the rural health infrastructure.