Skip to main content
Due to COVID-19, CRH will continue working remotely until further notice.

Focus on Rural Health

From Volume To Value

Shift in focus enables rural healthcare organizations to provide high-quality care.

By Nikki Massmann on

There are many abbreviations and buzz words in the media when it comes to healthcare. One such initialism getting some attention in North Dakota is ACO, which stands for Accountable Care Organization.

Defining an ACO is complex, but essentially it is a specific model for healthcare organizations (generally a network of physicians or hospitals) that helps them focus on prevention of disease, in addition to care coordination to better manage the patient. The ACO is "accountable" for providing care to its patients with an emphasis on population health to lower healthcare costs. The U.S. healthcare system is changing how hospitals are paid by insurance companies, Medicare, and Medicaid for treating their patients. There is a shift occurring across the nation, led by the Centers for Medicare and Medicaid (CMS), to reduce healthcare costs. Two of the ways this can happen are by providing care that prevents chronic disease (which can be costly to treat) and by making sure chronic conditions that do develop receive appropriate follow-up care. ACOs promote quality over quantity when it comes to healthcare.

"We're moving, as we say as part of the nomenclature, from volume to value," said Brad Gibbens, deputy director of the Center for Rural Health at the University of North Dakota School of Medicine & Health Sciences. "The U.S. healthcare system has traditionally paid providers per encounter, test, or procedure. Every time something is done to us or for us as a patient, that provider is paid based on volume. The more tests you order, the more retests, etc., the more there is cost and therefore reimbursement [from insurance] to the healthcare organization for that treatment."

Several rural hospitals in North Dakota are participating in an ACO model that is providing technical assistance in adopting this new type of payment structure. For the next three years, participating rural hospitals can learn how to function as an ACO with this support in place, before fully making the change. One of the benefits to participating is access to data that they have never had access to previously. The data provide a way to identify patients who have not had their appropriate health screenings, such as mammograms, colonoscopies, and blood tests. Another tool is that the ACO participants meet regularly to discuss what they are having success with as part of the move toward value-based reimbursement. McKenzie County Healthcare Systems in Watford City is one of the facilities participating.

Dan Kelly
Dan Kelly, CEO of McKenzie County Healthcare Systems in Watford City, North Dakota

"I am thoroughly convinced that the way hospitals do business today will have to change," said Daniel Kelly, CEO. "The benefit in participating in the ACO now is that we're learning to better provide care that is cost-effective and timely. The greater benefit is to our patient population. Our country has a history of not following good preventive medical practices, and our medical providers and hospitals have been focused on caring for people once they are sick. This is not prevention."

Many factors contribute to healthcare costs. Americans spend more on healthcare than other countries but do not necessarily have the best health outcomes. According to the Centers for Disease Control and Prevention (CDC), about 86 percent of all healthcare spending was for people with one or more chronic medical conditions. Nationally, about half of all adults have one or more chronic disease conditions and about one quarter have two or more. The changes in how healthcare is delivered and how providers are reimbursed are built around a public policy goal to improve health, improve care, and to control or lower costs.

North Dakota's rural hospitals face unique challenges in adapting to changes in healthcare policy and treating their patients in a cost-effective but high-quality manner. They regularly deal with shortages in their healthcare workforce, which can be exacerbated by their rurality — recruiting and retaining healthcare workers to small communities can be difficult.

"Right now, we are faced with three overwhelming issues in the healthcare arena: costly care, physician shortages, and staff shortages," said Kelly. "Changing our reimbursement system is the one thing that, if it proves successful, can address all three of those issues. It's less expensive to prevent illness than it is to treat. It takes fewer physicians and staff if fewer patients are being admitted to the hospital. The model has allowed our facility the financial resources to hire a case manager that contacts patients for good preventive care, and proper follow-up care."

If their healthcare is managed better, then that's what it's all about.

Sakakawea Medical Center (SMC) in Hazen, North Dakota, also participates in the same ACO model as McKenzie County Healthcare Systems. SMC has a partnership with Coal Country Community Health Center in nearby Beulah that contributes to the ability to implement the requirements of an ACO. It takes an entire team to make the transition to value-based reimbursement work, and these two facilities already operate together successfully. Care coordinators from both organizations are plugged into the community and work together to help patients find support services to better manage their diseases or prevent them, such as wellness centers, services offered through public health, and health-screening events.

Darrold Bertsch
Darrold Bertsch, CEO of Sakakawea Medical Center in Hazen, North Dakota, and Coal Country Community Health Center in Beulah, North Dakota

"The partnership allows us to better close the loop on how we provide care between our clinics and hospitals," said Darrold Bertsch, CEO of Sakakawea Medical Center and Coal Country Community Health Center. "When the day is done, the most significant thing is that we are making a difference in the lives of the population we serve. If their healthcare is managed better, then that's what it's all about."

Kelly echoes this sentiment. He said, "As an administrator, we don't talk a lot about this, but it's not that great of a feeling to be focused on people when they're seriously ill. Participating in the ACO and shifting to a focus on wellness as opposed to a focus on illness makes it exciting to come to work. We are finally doing what we should have been doing all along."

We are finally doing what we should have been doing all along.

North Dakota's rural healthcare organizations are poised to successfully implement changes to their reimbursement and payment structure. They have a history of collaboration and networking that allows them to share best practices and support each other in improving the health of all of the state's residents.

This article originally appeared in the Holiday 2016 issue of North Dakota Medicine.

Nikki Krueger Nikki Krueger is the Director of Communications at the Energy and Environmental Research Center (EERC). Prior to her position at the EERC, she served as Communication Coordinator at the Center for Rural Health at the University of North Dakota's School of Medicine & Health Sciences.