Rural Able & Willing Providers
by Tim Size on behalf of the Rural Wisconsin Health Cooperative
This statement was written as part of a larger paper, Medicare & Rural Health (7/95)
Policy Recommendation: Protect rural community choice of local providers and local access to care by requiring HMOs to contract with those rural providers who are able and willing to meet specific managed care organization standards for quality, utilization, license and cost.
As managed care systems move to capture local markets, conflict is naturally developing with rural communities who wish their local providers to develop or retain relationships with multiple systems. The growing economic power of large HMOs to threaten the lock-out of local providers from the insured population can be used to force de facto exclusive relationships.
"Managed care plans may cause a de-stabilizing influence on the rural health delivery system. For example, they may threaten the survival of the rural hospital because of the financial incentives to keep patients out of hospitals or funnel them into urban hospitals. Second, the plans may not include some local practitioners in the network. If these practitioners then decide to leave the area, access to care may be severely impaired. This access problem could be magnified if at some later time the managed care plan decides to withdraw from the area because it is not meeting its profit and enrollment goals. Because of lower volume, managed care plans in rural areas may not be as profitable as urban areas. As a result, more resources may be located in urban settings, causing rural residents to travel longer distances to receive many of their services." (Managed Care As A Service Delivery Model In Rural Areas, The National Rural Health Association, May 19th, 1995).
Notwithstanding the uncertain protection of federal antitrust laws, the widespread rural strategy of maintaining multiple system relationships is specifically meant to reduce the likelihood of a single HMO gaining local monopoly power. Rural providers who are able and willing to meet specific managed care organization standards for quality, utilization and cost should be allowed to work with multiple managed care systems and not be forced into exclusive relationships.
As Medicare begins to encourage beneficiaries to enroll in managed care plans, this issue takes on a new and immediate importance. The implementation of this recommendation will facilitate the development of rural managed care systems that work collaboratively rather than cohercively with rural providers and which are sensitive to local and rural population needs. It should promote managed care systems that enhance local access, quality and value in health care delivery for rural communities.