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Less staff, longer delays and fewer options: Rural America confronts a health care crisis

More than 40,000 graduating medical students learned Friday where they will spend the next three to seven years of their medical training.

With the United States grappling with a simultaneous shortage of primary care physicians and a rural health care crisis, many of the graduating students are set to enter the front lines of the country’s health care shortage.

At least 136 rural hospitals and health systems closed between 2010 and 2021, and over 40{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of rural hospitals operate with negative profit margins. Despite billions of dollars in investment in health care, hospitals throughout the United States face the possibility of shutting down.

“I would say it is probably the worst time for health care that we ever experienced,” Joanne Conroy, the chief executive officer and president of Dartmouth Health, told ABC News. She noted that increased costs, inflation, limited housing, and workforce shortages have made running rural hospitals more challenging.

Less staff, longer delays and fewer options: Rural America confronts a health care crisis — Duke students express joy on Match Day learning where they would spend the next three to seven years for their residency program.

Duke University School of Medicine

“We know what to do if we face another pandemic,” Conroy said. “The question is whether or not we have the financial resilience in order to survive it.”

Many hospitals that remain open have cut costs to survive, offering fewer services and beds.

In 2020, 47{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of rural community hospitals did not provide obstetric services, with 89 obstetric units closing between 2015 and 2019. Seven million women reside in counties with limited or no access to maternity care, impacting half a million newborns annually.

According to Conroy, patients can already feel the impact of the crisis, noting that some women in New Hampshire need to drive two hours to deliver their babies. Other effects include fewer available beds in emergency rooms, delays for elective surgery and longer wait times for prescriptions or ambulance pickups.

For new medical professionals entering their residency, especially those joining rural systems, the circumstances of the struggling health systems are out of their control.

PHOTO: Duke students express joy on Match Day learning where they would spend the next three to seven years for their residency program. — Duke students express joy on Match Day learning where they would spend the next three to seven years for their residency program.

Duke University School of Medicine

“It is not my job to fix all of the problems for an entire community, that’s impossible. When you feel like that’s your responsibility, burnout is basically inevitable,” said Katie Stevenson, a Tufts medical student. “When you feel like your goal is to do the best you can with the resources you have, you are able to right-size your expectations a bit.”

An increasing number of students are entering medical school programs that focus on rural medicine. In 2019, the Health Resources and Services Administration issued grants to create 32 newly accredited rural residency programs, supplementing the preexisting programs.

This year, Tufts School of Medicine will graduate its tenth class of students from its Maine Track MD program – a partnership with Maine Medical Center that allows students to pursue a community-based curriculum and gain financial incentives to encourage primary-care specialties.

STOCK PHOTO: A teacher gestures as she lectures a class of college students. — A teacher gestures as she lectures a class of college students.

STOCK PHOTO/Getty Images

Graduating roughly 40 students annually, 27{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of Maine Track students have been matched to programs in Maine and 47{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} have been matched into primary care programs, according to Dena Whitesell, an assistant dean for students at Tufts and psychiatrist at Maine Medical Center.

“We know that students and residents who live in an area [and] who train in an area are more likely to practice in that area in the future,” Whitesell said.

Liv Fauver, a Tufts student who matched with a University of Vermont residency program, grew up in rural New Hampshire and said she felt motivated to work in a similar community where she could positively impact the local residents.

“I think for me, my goal is to live and work in the community that I serve,” she said. “So I’m really in a place where I go home or go to the grocery store and see my patients all the time, because that’s the world that I live in and work in.”

While rural hospitals have closed in record numbers, PCPs – medical professionals who patients regularly use for checkups and other routine care – face additional challenges, especially in rural areas, according to experts.

Greg Sawin, a PCP who has practiced in Massachusetts and Maine as well as Duke University School of Medicine professor, said he worries that the goals of primary and long-term preventative care can sometimes be at odds with larger health care systems.

“We get paid to do things to people. We don’t get paid to keep populations healthy,” he said.

Moreover, he believes the costs associated with medical schools – including the high cost, the likelihood of incurring debt and substantially higher pay to pursue competitive specialties like orthopedic surgery or dermatology, for example – disincentivize primary care options like family or internal medicine.

“It can be very appealing to want to go into a specialty where you’re guaranteed to make more money and pay that debt off more easily,” Stevenson said.

Owen Foster lives in rural Vermont and has felt the impact of the decreased number of available PCPs, spending six months to book an appointment with a doctor. Living in a rural area, Foster shares his dilemma with millions of Americans in rural areas impacted by the shortage of PCPs.

“You need basic things at certain intervals in your life,” he told ABC News. “If you don’t have a primary care provider, you can’t get that and you can’t get the referrals you need, so it’s really, really difficult.”

What makes Foster’s experience unique is his position as the state of Vermont’s top health care regulator. As chair of Vermont’s Green Mountain Care Board, he oversees the quality and cost of the state’s health care system.

Learning about the shortage of primary-care physicians in Vermont, Foster decided to use the opportunity to find a PCP as a chance to examine the market as a “secret shopper.”

“What I found was I was completely incapable of getting a doctor,” he said. “I called eight places and the best I got was on an indefinite wait list, which never came to fruition.”

Rural areas comprise about two-thirds of the primary care health professional shortage areas nationwide, even though only 20{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of Americans live in rural areas.

The problem is also likely to worsen over time. Projections indicate that the United States will likely suffer a shortage of between 17,800 and 48,000 PCPs by 2034.

Moreover, health care professionals believe that the shortage of PCPs can make other elements of health care more expensive and worsen overall patient outcomes. Sawin gave the example of a person getting strep throat. Without a PCP, the person might go to a local hospital emergency room, which is significantly more expensive than other treatment options.

“In terms of mismatch of resources, you know, a kid with strep throat showing up in the ER is like cutting butter with a chainsaw,” Sawin said.

Foster added that primary care providers are “critical to controlling the costs of a health care system” due to their role in the early identification of issues, their ability to diagnose mental health issues, and their approach to preventative medicine.

According to Foster, PCPs in rural areas, however, struggle to find and retain staff, negotiate with insurance companies and prevent burnout. The shortage of PCPs, combined with the increased health care needs of the older population in rural areas, creates a concerning combination.

STOCK PHOTO: A group of medical students discussing some work while huddled around a whiteboard at the lab together. — A group of medical students discussing some work while huddled around a whiteboard at the lab together.

STOCK PHOTO/Getty Images

Despite these issues, Foster said he was optimistic about some approaches to make primary care more financially feasible, including adding a floor for PCP spending within health plans and government involvement in rate setting.

A new generation of students graduating from rural track programs also has the potential to reverse the tide of the PCP shortage in rural areas, with 571 additional primary care matches this year. Stevenson, for example, matched with the Swedish Cherry Hill rural program in Washington state.

“I think we have an opportunity in this country to do a much better job of taking care of our patients if we do a better job of funding primary care and preventative care and creating healthy environments,” Stevenson said.

How major retailers are trying to change how America consumes health care

Illustration of a price tag in the shape of a red cross

Illustration: Sarah Grillo/Axios

Amazon, Walmart, CVS, Dollar General and other big retailers are elbowing their way into health care delivery, pushing a customized consumer experience driven by digital health products.

What’s happening: At its core, these companies are pulling together different tech-enabled services — urgent, primary, home and specialty care, pharmacy, and, in some cases, full integration with an insurer.

“Convenience is really front and center to those plays. They are trying to capture the attention of the patient when they already own that consumer,” Caroline Hofmann, head of emerging businesses at virtual specialty care company Thirty Madison.

Why it matters: A more user-friendly portal to the health system could lead to more engaged patients and better access to care in underserved areas. It could even yield a sustainable model for profitably offering better care for less money.

But the retailers’ forays are prompting growing anti-trust and privacy concerns, as well as fears of further erosion of the doctor-patient relationship once considered central to coordinated care.

What they are saying: “If you fast forward 10 years from now, people are not going to believe how primary care was administered,” said Amazon CEO Andy Jassy in a recent announcement about the company’s $3.9 billion acquisition of concierge medicine provider One Medical.

With that deal, which closed last month, Amazon brought in an on-demand virtual care services platform, more than 125 locations and a piece of the Medicare Advantage business.

Driving the news: Yesterday, Best Buy Health launched a hospital-at-home program with North Carolina-based Atrium Health. The tech retailer bought the remote patient monitoring company Current Health in 2021. Best Buy said it will provide patient education, its at-home care platform and devices, and technical support via specially-trained Geek Squad agents.

It came on the heels of Walmart Health announcing last week that it plans to nearly double the footprint of its in-store clinics, which offer primary, behavioral health vision and dental care. In the fall, Walmart also inked a 10-year Medicare Advantage deal with UnitedHealth Group.
In January, CVS Health announced a plan to buy Oak Street Health, a primary care group focused on Medicare patients. The pharmacy giant already owns insurer Aetna, pharmacy benefit manager CVS-Caremark, home health company Signify Health and health care service brands MinuteClinic and HealthHUB.
Also in January, Walgreens-backed primary care company VillageMD, scooped up more primary, specialty and urgent care investments, augmenting plans to open more than 500 full-service doctors’ offices in Walgreens locations,
Other companies like Rite Aid, Albertson’s, and Dollar General have launched programs in health care delivery.

Between the lines: Amazon, CVS and Walmart have made some of the most consequential moves by combining their massive retail footprints with assets like primary or urgent care sites, pharmacies and some sort of relationship with insurers, experts say.

“They’re all acquiring every piece of medicine,” Robert Pearl, a Stanford University professor and former CEO of The Permanente Medical Group, told Axios.
“Medicine as we know it will be very very different assuming they’re successful. They’re big companies, they’re smart companies.”

Be smart: Depending on the retailer, patients might have access to virtual care services, book appointments and fill prescriptions via an app.

They could get same-day care, get preventative services like vaccines and pick up their drugs in-store. A health worker might walk them down store aisles and guide them to healthy food purchases and wellness products.

In the first wave of this trend, retailers were more focused on urgent care or one-off visits for vaccines, said Jacob Effron, a principal at Redpoint Ventures.

“The criticism that could’ve been levied at that is that patients could just go for that ad hoc care and not have an ongoing relationship with a primary care doctor,” he said.
In recent months, retailers are investing in end-to-end primary care. “That’s what gets me increasingly excited about their role because there’s only so much you can do as the urgent care provider and much much more you can do when you have that longitudinal relationship between the doctor and a patient over time,” Effron said.

Between the lines: Each of these businesses also are clearly eyeing a very lucrative segment of health care: Medicare Advantage. More than half of eligible seniors are now covered by privately-run Medicare.

Medicare Advantage is attractive because its payment models are geared toward rewarding providers for wellness and prevention care. Payments are capped so there’s an incentive to use integrated care to keep people healthy rather than providing services when they are sick.
For some retailers, it’s similar to the Kaiser Permanente model, where the payer and provider are completely aligned, Pearl said. But the retailers could create an HMO on steroids.
“Why has Kaiser Permanente never really expanded nationally? It’s very hard to get enough of a population in a local area to provide it. You can’t hire enough specialists, enough doctors,” he said. “The beauty of the retail giants is how big they are. If you get every Amazon Prime member to join, they immediately have enough volume they need to put in place a high-functioning system.”

What to watch: How these businesses evolve.

Amazon until now has been mostly virtual in its offerings, Effron said. “It begs the question, will they do a similar model to what some of these others have done and put clinics in Whole Foods?”

The bottom line: This still makes up a very small segment of health care delivery — and may not solve the medical system’s biggest problems.

“These players ultimately have to deliver the same or better outcomes at a lower cost in order to be in-network and get recommended by payers as well as picked by the employers,” Hofmann said.
And, she said, they can certainly increase access. “It remains to be seen if they can really bend the cost curve,” she said.

Editor’s note: This story has been updated to correct the spelling of Caroline Hofmann’s name.

How health disparities map out across America

Targeting solutions

Healthcare organizations have leaned on several strategies to address access gaps.

Tools meant to connect to patients virtually, like telehealth, took off as the government relaxed regulations in response to the COVID-19 pandemic, and are now commonplace. Yet many in rural and low-income communities lack broadband internet service.

Major healthcare providers and other companies have expanded into alternative care sites such as retail stores and mobile clinics. Dollar General and CVS Health, for example, have the reach to thrive in underserved markets. However, only 10{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of patients used retail clinics last year, according to a Deloitte survey. And some consumers have trouble navigating the healthcare system without guidance.

In Mamou, Louisiana, a town of approximately 3,000 people in Evangeline Parish, an independent drugstore open since 1975 is struggling to provide for its longtime customers. In the past year, Reed’s Pharmacy has terminated long-standing contracts with insurers and pharmacy benefit managers and has transferred patients’ prescriptions to a Walmart in the next parish.

The drugstore couldn’t get by on what pharmacy benefit managers—often part of the same corporate families as insurers and chain drugstores—charge for the medications and pay for dispensing them, said Rebecca Cormier, pharmacist and co-owner.

“Grocery stores aren’t expected to buy bread for $1 and sell it for 50 cents, but that’s what they’re expecting us to do,” Cormier said.

Reed’s is one of two drugstores in Mamou. The other is on the campus of the 60-bed Savoy Medical Center on the edge of town.

Many of Reed’s customers have patronized the store their entire lives and lack the health literacy to navigate the healthcare system without help, Cormier said. Only 12{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of the town’s population has a college degree and one-quarter has disabilities, according to census data.

“Some of these people can’t maneuver a phone tree,” which are used by large companies, including chain drugstores, Cormier said. “We’ve been serving third and fourth generations of families over here. If you pick up the phone, you’re talking to a pharmacist and a person—you’re not pressing ‘one’ to talk to so-and-so.”

For some drugs, Reed’s managed to keep the cash price within $20 of what patients were paying with insurance, Cormier said. But for other medicines, including those treating the many locals with asthma and diabetes, the drugstore couldn’t solve the affordability problem.

The recent contract disputes leave those customers with fewer options, especially those without access to transportation, Cormier said.

“They don’t have a way to get out of town to get their medicine,” she said. “They’re going without their medicine because we can’t fill it. No one else in town is going to do it at a loss either, so they will just go without.”

Incentivizing transformation

Emerging market forces are shaping a framework of accountability and financial incentives that aim to close gaps in care. Government agencies and third-party accreditors are imposing standards for data collection, governance and quality research.

The Centers for Medicare and Medicaid Services now evaluates how providers incorporate health equity into strategic plans, data collection and analysis, and leadership. The agency also created a “birthing-friendly” designation to encourage hospitals to close maternal morbidity gaps. The Joint Commission, which accredits about 3,800 hospitals, has devised guidelines that include designating officers to lead efforts focused on eliminating disparities and screening patients for social determinants of health.

Health equity advocates also see promise in value-based payment models, but the transition has been slow and the arrangements are not deployed in the locations where they could make the greatest difference. The Medical Group Management Association reports that value-based care accounts for just 5.5{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} to 14.74{bf0515afdcaddba073662ceb89fbb62b6b1bf123143c0e06b788e1946e8c353f} of physician office revenue. CMS is pushing to increase participation, especially for Medicare Advantage members.

Value-based arrangements pay providers a fixed amount of money per person, per month, and allow them to decide how to spend the money. The upfront investment enables providers to build teams based on patient needs and fund community health programs. That includes hiring community health workers, dietitians and social workers or offering screenings and mobile vaccination clinics.

To make it work, providers and payers have to coordinate data and care plans, negotiate risk levels and overhaul revenue models. This would mark a major shift from the fee-for-service model, and it presents significant financial and logistical challenges to providers that benefit from the status quo. Healthcare organizations also have to reach beyond medical care and invest in other interventions to be successful.

“Old habits die hard,” said Dr. Chris Dodd, chief medical officer at Franklin, Tennessee-based home health provider Emcara Health. “Health systems have been traditionally focused on building more hospitals and hiring more specialists and using [primary care providers] to just funnel patients to higher-cost services.”

CMS’ Center for Medicare and Medicaid Innovation reported in 2021 that pilot programs testing new payment models aren’t being implemented in low-income areas. The agency is working to mitigate this by experimenting with novel payment arrangements under Medicaid and prioritizing interventions in locales identified as underserved by the Center for Health Disparities Research at the University of Wisconsin-Madison.

More flexibility for spending money on social interventions is needed and the federal government should be specific about what kinds of risk-sharing arrangements are proper and what populations should be targeted, said Hugh Lytle, founder and CEO of Equality Health, a population risk management company that enables value-based care arrangements among Medicaid and Medicare beneficiaries.

“There’s more than enough money in the system to get better results, but the incentives, even under the current value-based care systems, really encourage cherry-picking of the healthy patients and dumping of the less healthy patients,” said Dr. David Ansell, senior vice president for community health equity at Rush University Medical Center in Chicago and co-founder of the Healthcare Anchor Network.