Impacts of the Pennsylvania Rural Health Model on Health Care Access and Utilization

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PROJECT SUMMARY/ABSTRACT More than 130 rural hospitals in the U.S. have closed over the past decade, exacerbating challenges that rural communities face accessing care and contributing to rural health disparities. The Pennsylvania Rural Health Model (PARHM) is a novel alternative payment model (APM) intended to ensure the financial viability of rural hospitals, increase access to high-quality hospital services, and improve population health in underserved rural communities. The two main components of PARHM are global budgets and hospital-specific transformation plans. Global budgets are prospective payments made by payers to cover all inpatient and hospital-based outpatient services. Global budgets decouple hospital revenue from volume, as currently exists under fee-for- service payment, and therefore incentivize the efficient use of medical services and promote reduction of avoidable hospitalizations. Through transformation plans, hospitals develop plans to tailor services to the needs of the local community. The goal is to make meaningful improvements in the quality of the care hospitals provide and address the most pressing health needs in their communities to improve population health and realize future savings. Hospitals joined PARHM in cohorts over three years. We leverage variation in implementation of PARHM and a within-state control group of eligible but non-participating hospitals to evaluate the effects of PARHM using a difference-in-differences design to compare differences in trends. We propose the following aims: Aim 1. Examine the association of PARHM with rural hospitals’ provision of traditionally unprofitable service lines and patient use of those services. We hypothesize that treated hospitals will be more likely to continue offering selected hospital service lines that are of particular significance to rural areas and have traditionally been considered unprofitable (i.e., obstetrics, psychiatric, substance use disorder). Furthermore, we hypothesize that utilization rates for these services will increase more in treated vs. control groups. Aim 2. Assess the impact of PARHM on rates of potentially avoidable hospitalizations (PAHs) for ambulatory care sensitive conditions. We hypothesize that PAH rates will decrease more in treated vs. control groups as a result of improved ambulatory care coordination and financial incentives. Overall, this study will address the current gap in the literature regarding PARHM on health outcomes and global budgets on hospital service lines. This project will provide novel evidence about how global budgets affect access to hospital services and health outcomes in rural communities—critical for evaluating PARHM’s performance and informing future payment models targeted to NIHMD health disparities communities. Completion of this project and the associated training goals will provide the PI with training to become a physician-scientist with the training and skills to critically evaluate and inform payment and health care delivery policy for underserved communities in the United States.