Report Recommends Higher Payments To Rural Hospitals

THE National Advisory Committee on Rural Health has put forth a series of ideas to alleviate one of America's most serious health-care problems, which threatens one part of the safety net for elderly and poor rural residents. The problem is that hundreds of rural hospitals, which are central to the health care of country residents, face serious financial difficulties that may cause them to close. The American Hospital Association says that 45 rural facilities closed last year, and it estimates that as many as 600 may have to shut their doors before the end of this year.

When a rural hospital closes, nearby residents - who are disproportionately elderly and poor - often lose access to health care, specialists say.

The advisory committee has given its first set of recommendations to US Health and Human Services Secretary Louis Sullivan. The key proposal: Rural hospitals should be reimbursed as much as city hospitals are for performing medical services under Medicare, the government program to help finance medical care for the elderly.

The committee wants to establish a standard national payment in two years.

The government now bases Medicare reimbursements in part on the theory that hospital care costs less in rural areas. Rural health-care experts say that isn't so. Because fewer people live in the country, rural hospitals cannot practice economy of scale and often have empty beds. But if rural residents are to have adequate access to medical assistance, most country hospitals must continue to operate and should have modern equipment, these specialists say.

The committee also proposes that Secretary Sullivan identify those rural hospitals that are ``essential to preserving access to hospital care in their communities.'' And it asks that Medicare pay rural doctors at least 80 percent as much as it pays city physicians. American small towns and rural areas are now having difficulty attracting physicians, nurses, and other health professionals.

Two other reports in the next two months will help Sullivan decide how to respond to the grave rural health-care problem. In September the General Accounting Office is to release its report on the number of American hospitals that it believes are at risk of closing for financial reasons.

And in October the advisory committee is to submit its annual report to Sullivan. It will make additional recommendations on ways to retain basic health-care services in rural areas.

How much money the Medicare program decides to reimburse rural physicians and hospitals is important for several reasons. Physicians and hospitals say government payments are so low that they frequently lose money treating patients who are eligible for the Medicare or Medicaid programs because they are elderly or poor. Further, private health-insurance companies often base their payments on the amount that Medicare pays.