Bipartisan Support Needed to Improve Rural Healthcare Facilities

Rural HealthcareWith most rural healthcare facilities built under the Hill-Burton Act of 1946, many are in critical need of upgrades or replacement to deliver 21st century health care throughout rural America.  Meeting increasing healthcare demands including preventative, palliative and other care services are becoming impossible to provide with limited financial resources and antiquated facilities.  And, while politicians from both political parties travel the countryside talking about how laws need to change to address healthcare delivery, no one is addressing the failing rural healthcare infrastructure.

Kentucky: 423,000 new Medicaid Enrollees

The Minority Leader of the U.S. Senate, Mitch McConnell (R-KY) recently met with the staff of T.J Sampson Community Hospital in Glascow, Kentucky, a rural community with a population just over 14,000.

According to their website, TJ Sampson Hospital is a 196-bed acute care facility, including 16 skilled-care beds (http://www.tjsamson.org/index.html).

According to reports from the Bowling Green Daily News, http://www.bgdailynews.com/news/local/mcconnell-calls-for-do-over/article_ff253ea6-aa77-11e1-a5be-001a4bcf887a.html, “A May 2010 report from the Kaiser Commission on Medicaid and the Uninsured estimated that if the new Affordable Care law adopted by Congress in 2010 is accompanied by a more aggressive outreach and enrollment campaign, Kentucky could see as many as 423,757 new Medicaid enrollees by 2019.”  McConnell noted correctly to the staff of TJ Sampson Hospital, “I know you’re wondering how in the world you’re going to handle all these folks when they show up in the ER.”

According to a family medical doctor participating in the forum, “we need to revolutionize and transform a very dysfunctional system of health care.”  He is right and the Rural Medical Facility Investment and Improvement Act (RMFIIA) can help in the transformation.

Rural Medical Facility Investment and Improvement Act (RMFIIA)

The RMFIIA, http://www.thelifecaregroup.com/federal-legislation.html, affords over 2,000 rural communities a unique option to develop a new, hybrid, business-acclimated healthcare facility where replacement of an antiquated hospital is required. These new medical campuses will integrate the latest in 21st century medical innovations, facilities, and palliative and preventative programs while simultaneously providing care to a growing senior market; all of which work to ensure its financial sustainability and lower overall healthcare costs. Most importantly, at the end of the RMFIIA’s development, these facilities will be locally owned and operated without any financial risk to local governments or the community’s tax payers.

The justification for RMFIIA is based on the challenges faced by most rural communities needing to replace an antiquated healthcare facility. Currently, existing public and private financing often requires substantial matching or other unattainable financial requirements to build the type of healthcare facility truly needed to be successful. Moreover, with current budget constraints Congress will soon address Medicare and other entitlement programs that are likely to significantly impact rural healthcare’s funding baseline and limit available dollars to address infrastructure. The RMFIIA provides the financial incentives to attract private investors to fill this gap.

Encourage Healthcare Investors

To entice private and institutional investors, the RMFIIA provides financial incentives including tax-free interest on the funds advanced by the investors in the creation and development of these facilities.  In consideration of these incentives, the investors are required to sell the facility at its developed costs allowing the local community to purchase a financially viable healthcare facility at a currently unachievable cost. A safety net provision allows for a facility to be sold at below its developed costs to match its revenue capabilities by investors receiving federal tax credits equal to the discounted sale amount ensuring both community and investor security.

Create Jobs

Another peripheral benefit is the economic stimulus and jobs provided by the RMFIIA. As the U.S. is experiencing its worst economic downturn in recent history with persistently high unemployment, the RMFIIA will create over 250,000 jobs sustained over a six year period in the development and support of rural healthcare campuses developed under this legislation in addition to the 35,000 permanent new healthcare positions required to sustain them. The RMFIIA will become the single largest private investment in our nation’s ailing economy at a critical time.

The RMFIIA is presented as a completely pay-as-you-go qualifying legislation. Given CBO’s policy of scoring legislation without consideration of future economic impacts, the legislation will cost an estimated $3.8 billion over the 10-year CBO budget projection period.  However, the reduction of dependence on government programs, Medicare Unit Cost savings and increased revenue generation from these hybrid healthcare facilities coupled with a significant increase in GDP from the jobs created will generate an economic stimulus of over $34 billion during this same period using U.S. Housing and Urban Development calculations.

The RMFIIA is building support and already enjoys the support of rural communities across the nation and rural advocates like Wyoming, Colorado, and Nevada Farm Bureaus, two of our nation’s leading health care consulting and CPA firms, Stroudwater (www.stroudwater.biz ) and WHIPFLI Accountancy Corporation (www.whipfli.com).

The status quo has resulted in 20% of our rural hospital closing over the past decade. This failure rate is increasing and Congress needs to act immediately. Given our current economic situation our federal government can no longer afford to meet today’s rural healthcare demands let alone address the future costs we face as our rural healthcare infrastructure continues to deteriorate. The Rural Medical Facility Investment and Improvement Act addresses the capital needed to preserve and build a sustainable rural healthcare system with private financing in lieu of governmental programs we can no longer afford.

To learn more about the RMFIIA, please contact Cansler Consulting. Cansler Consulting is an experienced lobbying firm in Food and Drug Administration, budgeting, agriculture, rural healthcare, and energy policies and through our Congressional relationships we can help you influence the policy makers on Capitol Hill. You can contact us at info@canslerconsulting.com or at (202) 220-3150.

Tim Cansler
Share
Share