Hospital Outpatient Departments Preserve Care Access for Rural Patients

Rural populations and other vulnerable patients disproportionately rely on hospitals and their outpatient departments for care, according to a report from the American Hospital Association (AHA).

Rural communities often face gaps in care access. These areas typically have fewer people and lower healthcare utilization, making it financially challenging to offer the full range of healthcare services. When rural patients do receive care, it can be more expensive because they often have more complex health needs, are more likely to be uninsured, and tend to rely on public payers when they do have coverage.

Many rural healthcare facilities have struggled to keep their doors open amid these financial challenges. However, hospitals have helped some of these facilities stay afloat. Hospitals were two and a half times more likely to acquire physician practices in rural areas than other organizations, including commercial insurers.

Commercial insurers tend to focus on making deals in larger, more profitable markets. The median household income was 18.4 percent higher in counties where insurers acquired physician practices ($82,056) compared to counties where hospitals acquired physician practices ($69,302). The county-level population was also, on average, 61.4 percent larger where commercial insurers acquired physician groups.

Hospital outpatient departments, in particular, have been an important source of care for Medicare beneficiaries in rural areas and beneficiaries dually eligible for Medicaid. Medicare beneficiaries in rural counties are more likely to visit hospital outpatient departments over physician offices.

Among patients from counties where 90 percent or more of the population lives in a rural area, 36 percent of physician visits are provided through a hospital outpatient department. In the least rural counties, 25 percent of visits are furnished at hospital outpatient departments.

Dual-eligible beneficiaries received 40 percent of physician visits through a hospital outpatient department compared to 32 percent among non-dual-eligibles. This is partly attributed to the complex clinical needs of dual-eligible beneficiaries.

For example, among dual-eligibles receiving most of their visits through a hospital outpatient department, 72 percent had a complication or comorbidity (CC) compared to 64 percent of patients who usually went to independent physician offices. In addition, hospital outpatient department patients had an average of 5.2 CCs compared to 3.6 CCs among those going to independent physician offices.

Similarly, 38 percent of hospital outpatient department patients had major complications or comorbidities (MCCs) compared to 25 percent of patients mostly going to independent physician offices.

While acquisitions in the healthcare industry may sometimes be questionable regarding competition and impacts on costs and quality, hospitals have helped preserve access to care for rural populations by acquiring local physician groups.

“[Hospital outpatient departments] provide care for Medicare patients who are more likely to be sicker and more medically complex than those treated at physicians’ offices while also being held to stricter safety and regulatory requirements,” the AHA report stated.

“This is especially true in rural communities, and additional site-neutral funding cuts being considered by Congress would have a direct impact on the level of care and services available to vulnerable patients in these communities. The AHA continues to urge Congress to reject Medicare payment cuts that would reduce access to essential care and services in communities, especially those in rural and underserved areas.”