REGION—Five hospitals in the northern Pennsylvania were named as the first in a set of ultimately 30 to implement the new Rural Health Model, a change in payment structure which would see public and private insurance companies pay hospitals as part of a global budget system instead of the current fee-for-service model.

Essentially, instead of insurance companies paying hospitals each time one of their insurees receives a service, an often inconsistent payment structure, insurers will pay consistent monthly amounts over the course of the year.

“We looked at the Rural Health Model for over the last two years...and we made a decision to participate in this model principally because we think healthcare really needs to change,” said David Hoff, CEO of Wayne Memorial Hospital (WMH), at the press conference. “We think the current incentives in the healthcare system are not appropriate for keeping our community healthy.”

WMH is one of five hospitals spearheading the program.

The other four include:

• Barnes Kasson, Susquehanna, Susquehanna County

• Endless Mountains, Montrose, Susquehanna County

• Geisinger Jersey Shore, Jersey Shore, Lycoming County

• UPMC Kane in Kane, McKean County.

Noting that “nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at-risk of closure,” the Pennsylvania Department of Health (DOH), healthcare leaders, state officials and healthcare professionals all gathered in Harrisburg Tuesday afternoon to unveil the program.

A six year initiative, the program is looking to expand to 18 hospitals by January 2020 and to 30 by 2021, explained Secretary of Health Dr. Rachel Levine at Tuesday's press conference.

The initial private insurers participating in the Rural Health Model are Gateway, Geisinger, Highmark, Medicaid and UPMC.

Levine stated Tuesday, “The model will help ensure that rural hospitals, which are often an economic driver in rural areas, stay open, that jobs stay local and that sustainable access to healthcare is available to residents living in rural areas.”

In addition to providing hospitals with more consistent revenue from the insurance companies, the Rural Health Model also aims to incentivize hospitals to generate new programs to keep residents healthier longer.

“This global budget model will incorporate whole-person care, social determinants of health, and long-term outcomes and keep our rural populations healthy and help rural hospitals thrive,” said Johanna Fabian-Marks, Chief of Staff in the Pennsylvania Department of Human Services (DHS).

Fabian-Marks noted the shift in payment models is “important for encouraging health innovation and improved patient outcomes.”

Also present at Tuesday's announcement, Senator Lisa Baker (R-20th) noted “Addressing the problems facing rural hospitals and health care facilities is a matter of high urgency because there are not a lot of options in the neighborhood.”

Both Wayne and Susquehanna counties reside in the 20th district, meaning Baker represents 60 percent of the hospitals in the initial Rural Health Model.

“When facilities close, it is catastrophic,” she said, noting that for many expectant families in the remote parts of her district maternity care is an hour away.

“Through this change in payment model, the hospitals will be able to transform care locally to better meet the health needs of the community,” said Baker. “This includes opportunities to assess items that may traditionally fall outside of the role of the hospital, such as transportation and broadband internet access.”

In addition to the Rural Health Model, Baker introduced legislation to create the “Rural Health Redesign Center” designed to “...develop a more predictable payment plan and create a fixed budget to stabilize reimbursements,” states a release.

Proposed in Senate Bill 314, the center would be funded by a $25 million grant from the Center for Medicare and Medicaid and would also offer new community health services and programs aimed at behavioral health and substance abuse.

—Information from press releases was used in this story.