Preparing Rural Communities for Managed Care: Lessons Learned

Preparing Rural Communities for Managed Care: Lessons Learned

Nancy J. Fasciano, M.P.A., Suzanne Felt-Lisk, M.P.A., Thomas C. Riclcetts, Ph.D., and Benjamin Popkin, J.D., M.P.H.

anaged care has been credited with helping curtail the rapid growth of health care costs in the United States. However, the effects of managed M care-and the market-oriented disci-

pline it imposes on health care delivery-on more frag- ile rural health care systems is not known. While health maintenance organization (HMO) penetration nationwide now stands at 27 percent (Interstudy, 1998), the growth of risk-based managed care has lagged in rural areas. In the eight states that report county-level commercial HMO data, for example, less than 8 percent of the rural population was enrolled in commercial HMOs in 1995, compared with almost 26 percent of the urban population in those states. In recent years, however, increasing numbers of urban- based HMOs have expanded their service areas into surrounding rural counties. With this expansion, con- cerns have mounted about whether rural providers are prepared to operate effectively in a market dominated by managed care.

In 1994, the Agency for Health Care Policy and Research (AHCPR) funded five university-based technical assistance projects to help rural providers in six states-Arizona, Maine, Oklahoma, West Virginia, Nebraska and Iowa (Note 1)-prepare to participate more effectively in managed care through the development of rural health networks. In some sites targeted for technical assistance, the AHCPR projects provided support to fledgling networks; in others, to loose coalitions of providers that had yet to formalize their relationships; and in others, to broad-based community groups formed to analyze local health care needs and

resources. The projects' experiences in each of these settings yield different insights about the process of health system change in rural areas and the role of technical assistance.

This paper describes the lessons learned from an evaluation of the grant program conducted in 1997 to 1998. One key conclusion that can be drawn is that technical assistance projects have little ability to spur network development; instead, developments in the sites suggest that real movement toward system integration usually requires pressure from larger forces external to the community, such as increasing market activity by national or regional managed care organizations (MCOs). Once a decision has been made to embrace managed care, however, the technical assistance needs of the providers involved are many and resource-intensive. For the rural managed care projects, differences in the pressures communities face-and in their consequent motivation to move toward managed care-transla ted into widely varying technical assistance needs, and project staff repeatedly emphasized the need to adapt their efforts to the specific require- ments of each community. In many sites, this meant scaling back expectations for network development and focusing instead on helping community members begin a strategic planning process for health care delivery in their communities.

Background

Managed care penetration is extremely low in many rural areas, and the spread of managed care

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arrangements, particularly capitated arrangements, has been slow (Ricketts, et al., 1995; Rural Policy Research Institute [RUPRI], 1995; Serrato, et al., 1995). However, there are signs that the pace of change is accelerating, as commercial plans spread outward from urban centers, state Medicaid programs continue to expand risk- based programs into rural areas, and rates set for rural areas by the Medicare program improve (Felt-Lisk, et al., 1999; McDowell, 1997).

Currently, the rural areas with the most managed care activity tend to be those relatively near urban areas, to which urban-based provider networks and managed care plans can easily expand (RUPRI, 1996; Rural Health Research Center, 1997). Elsewhere, the Medicaid program has played a key role in introducing rural residents and providers to managed care. As of 1995,10.5 percent of rural recipients were enrolled in Medicaid HMOs or prepaid health plans (Rural Health Research Center, 1997; Slifkin, et al., 1998). With the increase in Medicare capitation rates for rural areas, mandated by the Balanced Budget Act of 1997, the Medicare program is expected to play an increasing role in the expansion of managed care into rural areas, which have disproportionate numbers of elderly residents (RUPRI, 1996).

In some rural areas, provider networks have developed to support managed care arrangements. Network participation is actually fairly common in rural areas, but many networks are simply loose arrangements among providers to share provider education and a few services. Relatively few rural networks involve sharing of decision making or fiscal authority by providers (Christianson, et al., 1993; Moscovice, et al., 1996). However, there is some evidence that this is changing as providers anticipate or actually experience mounting pressure to accept managed care arrangements (RUPRI, 1996).

Some rural networks have attempted to emulate integrated service delivery systems while maintaining the relative autonomy of local providers. Providers have entered into such arrangements in the hope that the network will help them to hold their own against outside MCOs and thus preserve the local health care infrastructure (Christianson and Moscovice, 1993). Some of these provider groups, including some of those in the AHCPR demonstration sites, formed with the intent of not only contracting with MCOs but also marketing their own managed care product to retain a larger share of local health care dollars.

The challenges rural providers face in developing networks capable of managed care contracting are for-

midable. These include limited resources to devote to network and product development, lack of familiarity with managed care concepts, inexperience in negotiat- ing payment arrangements and inadequate information systems. The AHCPR rural managed care grant program was intended to help rural providers over- come these barriers and participate successfully in managed care.

The AHCPR demonstration program set a broad goal of improving preparedness for managed care in rural areas, but it did not impose specific approaches on the projects. Congress, in authorizing this program of demonstrations as part of P.L. 101-239 (Omnibus Budget Reconciliation Act, 1989), called for general projects that focused on research, demonstration, and evaluation activities related to the delivery of health care services in rural areas. In creating guidelines for the grant program, the AHCPR anticipated that prob- lems and needs would vary across communities and therefore allowed for grantee-specific approaches to achieve the broad goals of the program.

The five projects were awarded annual grants of up to $250,000 a year, with the later year grants decreasing in size. Typically, the grant funds were used primarily to finance project staff salaries, with smaller outlays for consultants in some of the sites. Most of the projects were staffed largely by university faculty, many of whom were committed to the project for a small percentage of their time (in most cases, 25 percent or less). Some projects also hired additional full- or part-time staff, generally to do field work. In one case, the project hired a full-time project director. Another grantee created a collaborative arrangement with the state government, where the state contributed the time of several project staff members, including the project director.

Methods

In 1996, the AHCPR contracted with the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill and Mathematica Policy Research Inc. in Washington, D.C.,

The study discussed in this paper wasfunded by the Agency for Health Care Policy and Research (Contract No. 290-93-0038, D.O. #5). Forfur- ther information, contact: Nancy I. Fasciano, M.P.A., Mathematica Policy Research Inc., 600 Maryland Ave., S . W., Suite 550, Washington, D.C. 20024-251 2.

Fasciano, Felt-Lisk, Ricketts and Popkin 79 Winter 2999

to conduct a process evaluation of the grant program’s efforts to prepare rural areas for managed rare. One goal of the evaluation was to provide guidance to other organizations that are considering similar technical assistance efforts by summarizing lessons learned from the experiences of the five projects.

Because the projects did not have common objectives beyond the overarching goal of helping communities adapt to managed care, the evaluation focused on documenting the progress each project made toward achieving its individual objectives. The evaluation team also sought to understand how features of the local health care environment shaped both the types of technical assistance offered by the projects and developments in the demonstration sites. To gather information about projects’ objectives and activities, the researchers reviewed various project materials, including grant applications and project self-assessments, and conducted two rounds of two-day site vis- its to each project in the spring and fall of 1997. During each visit, the authors met with a series of informants knowledgeable about the projects’ goals, activities and environments, including project staff (typically, the project director and three to five other key staff), members of the provider organizations or community groups targeted for technical assistance (including hospital administrators, physicians, rural and community health center administrators, and community organiz- ers), health plan executives, and state and local policy- makers. Interview protocols were adapted for each type of informant; in general, the interviews focused on the centers’ objectives in the demonstration sites, specific activities undertaken to achieve these objectives, challenges and lessons learned, factors that shaped developments during the grant period, and perceptions as to the extent to which the centers were able to improve managed care readiness at the sites.

Types of Technical Assistance €for ts

The extent of network and managed care activity varied enormously across sites, and projects’ technical assistance efforts varied accordingly. The projects devoted staff time and grant funds to establishing community groups for health planning, coordinating existing groups, conducting surveys, analyzing data, developing tools to educate providers and others about managed care concepts, providing staff (in some cases, executive-level staff) to support provider groups, sup- plying computer equipment and software, educating

legislators, and identifying and supporting external consulting expertise (Appendix: AHCPR Rural Grantees and Demonstration Sites). In the review of the projects, the researchers observed that the technical assistance activities were clustered into three general types.

Organizing Support for Fledgling Provider Networks. Three projects (Maine, Nebraska and Iowa, and West Virginia) provided organizing support for fledgling provider networks. The specific activities involved leadership development in workshops and meetings; referrals to consultants; technical assistance in data gathering, report and summary writing; and assistance in identifying and capturing other funding. Some of these newly formed or developing networks included only physicians, others included a broad range of health care providers, and still others were formal physician-hospital organizations (PHOs). All of these provider groups were motivated to some extent by an interest in participating in managed care in a way that would maintain local control of health care dollars. Most of the networks-the Southeast Rural Physicians Alliance and the Nebraska Independent Practice Association in Nebraska, the Southern Virginias Rural Health Network and the Partners in Health Alliance in West Virginia-focused initially on creating the network structures needed to contract with MCOs. But two networks-the Western Maine PHO and the Eastern Panhandle Health Alliance in West Virginia-had either developed their own managed care product in partnership with an insurer or were exploring the possibility of doing so.

Community Development. The second general type of assistance was community development. The rural managed care centers actively supported the formation of new local groups (Arizona, West Virginia, Nebraska, Iowa) or recruited existing community groups (Arizona, West Virginia, Nebraska, Iowa, Oklahoma, Maine) to analyze their communities‘ health care needs and resources. In areas where managed care penetration was low and provider activity was limited (multiple sites in Oklahoma, and Grundy and Monroe Counties in Iowa), project staff viewed community development as a first step toward network development and managed care. In other areas, where managed care had long been a part of the health care landscape (the various Arizona sites), project staff focused on enhancing access by gathering information and organizing a local group to determine if there were

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unmet needs in the communities. Where those needs suggested state-level policy intervention, the project acted as a broker with state agencies or the legislature.

Support for Loose Provider Coalitions. One project provided support for loose provider coalitions in two of its sites. The groups targeted for technical assistance by the Maine project (in Washington and Aroostook counties) had formed to explore opportunities for cooperation and collaboration but had not for- malized ties and, hence, were not able to participate in managed care as a network. In both sites, managed care had made relatively few inroads, and the provider groups had made few strides toward active collaboration by the time the AHCPR grant was awarded.

Lessons Learned

Ten key lessons were drawn from the projects’ experiences at the sites selected for technical assistance. 1. Technical assistance must be tailored to the

stage of health system development a community has reached. The overarching goal of the grant program was to

promote the establishment of managed care institu- tions and development of rural health networks. How projects pursued this goal in particular demonstration sites largely depended on staff members’ assessment of the areas’ infrastructure, attitudes and knowledge base. A key factor was the level of managed care activity in and around the site and the extent to which network development had already begun.

In sites such as Farmington, Maine, where many providers were contracting on an individual basis with MCOs, and a group was already exploring the possibility of contracting as a single entity, network development was a realistic goal. However, in other areas, such as the sites in Iowa and Oklahoma, where providers and community members had little or no experience with managed care, project staff concluded that network development was unlikely to occur within the time frame of the grant program.

In these more isolated rural areas, staff confronted widespread bias against managed care. Providers and the public alike voiced fears that managed care would constrain health care choices, imperil local facilities and undermine the local health care infrastructure. According to project staff in Oklahoma, the central finding of their survey assessing public attitudes toward managed care was, ”People don’t know what it

is, but they don’t like it.’’ Faced with these attitudes, the projects scaled back their initial expectations for network development and instead concentrated on helping community members begin to analyze their health care needs and resources as a first step toward building provider networks. 2. Technical assistance must be ongoing to maintain

community and provider involvement. In some cases, the technical assistance process

required only intermittent contact between center staff and community members. This was particularly likely to be true of community development efforts. When community members felt abandoned by the project, they lost focus and commitment and were difficult to remotivate. When project staff lost touch with developments in the site, their help became less useful to the organizations they had targeted for assistance. Follow- through also was an issue in some sites. Although some communities that participated in the community development process went on to pursue objectives identified in their strategic plan, others did not, and both project staff and outside observers in one state think the development process would have been more effective if the project had maintained a presence in the sites and had been more proactive in helping community members follow through on their plan. 3. Future technical assistance efforts might benefit

from more systematic planning. The experiences of the five projects highlight the

challenges involved in designing and targeting technical assistance and underscore the importance of devot- ing sufficient time to the planning process, to determine the key issues facing rural communities and identify the communities and groups most likely to benefit from technical assistance. In one state, the project was initially unaware of the network development underway in one area of the state and, hence, failed to select this area as a demonstration site. In other cases, project staff had to abandon their original technical assistance strategy because the provider groups targeted for assistance proved to be less cohesive than staff had thought. The grant program requirement that projects identify demonstration sites in their proposals almost certainly contributed to these difficulties. 4. Technical assistance is most effective when deliv-

ered in response to needs articulated by community or provider organizations. Project staff almost uniformly emphasized the

need to allow community groups to set the technical assistance agenda. Although projects offered some general assistance, such as seminars on managed care concepts, as well as suggestions to guide the planning

Fascianu, Felt-Lisk, Ricketts and Papkin 81 Winter 1999

process, staff said they thought generalized help was less useful to the targeted groups than assistance explicitly requested by the groups themselves and that a more directive approach on the part of the project would have met with resistance.

Providers that had already formed fledgling networks were generally best able to articulate their technical assistance needs. These providers were motivated and moving toward common objectives and had clear- ly defined needs. In these circumstances, the projects could assist, rather than attempt to direct, the process of health system change and provide the specific resources the provider groups requested, rather than having to guess what their needs might be. 5. Providers were most strongly motivated to

form networks when faced with an immediate external threat. Fledgling networks were most likely to have

formed in areas where providers faced an external threat, such as increasing market activity by large regional or national MCOs or efforts by large regional facilities to expand their markets by drawing rural providers into ”hub-and-spoke“ arrangements. Fears that these outside facilities and MCOs would siphon patients out of the area, force providers to accept dis- advantageous contracts, and compel local hospitals to reduce services seem to have spurred much of the network activity in the demonstration sites.

For many providers, particularly struggling rural hospitals, the formation of a local network was a defensive maneuver designed to protect their market share and autonomy-or even their very existence. Providers said they feared that if they did not band together, they would be ”nickel-and-dimed to death” by large, highly sophisticated MCOs. Networks were typically structured to ensure the survival of the system as a whole, and in some cases, with the explicit goal of keeping large MCOs out of the area.

cal assistance, providers have been largely shielded from the pressures that are driving health system change in areas closer to active urban markets. In the Oklahoma, Iowa, and two northern Maine sites, for example, purchaser pressure for health system change has been minimal. To date, the state Medicaid agencies have mandated only primary care case management in these areas, and the few large employers with a presence in these sites have shown little interest in local managed care products because they generally prefer to offer the same health care coverage to their employ- ees in all locations. Although the expectation of increasing use of managed care arrangements by the

In the more isolated rural areas targeted for techni-

Medicare program has caused some consternation, providers in these sites face no immediate threat and, therefore, feel little urgency about preparing for managed care. 6. The extent to which system integration occurs in

the absence of an immediate threat seems to depend on such factors as the level of competition among local providers, the presence or absence of strong leadership by individual physicians or hospital administrators, and the extent to which physicians are inclined to cede some independence to gain security or to free themselves from increasing paperwork. Some demonstration sites were described as hav-

ing a ”culture of cooperation,” fostered by a long history of working together to achieve common goals. Farmington County, Maine, for example, was the site of one of the country‘s first rural HMOs, Rural Health Associates, a community-oriented plan formed in the 1970s by a group of local physicians. After the plan folded in 1983, the community hospital took the lead in organizing a health care network, whose components were later spun off into sub-corporations governed by large community boards. The community’s broad- based involvement in health planning, as well as its early experience with managed care, was cited by respondents as a key factor in the formation of the Western Maine PHO. Providers in the West Virginia sites have a less extensive history of working together, but respondents in these sites also cited earlier cooper- ative efforts, such as grant-funded training, as having laid the groundwork for the network development supported by AHCPR funds.

In other sites, competition among providers and the lack of strong motivation or resources to alter existing patterns of health care have discouraged cooperation. In almost all of the sites, respondents reported increasing provider interest in central purchasing, shared services, joint recruiting, and other collective action, and some provider groups, including those in the two northern Maine sites, had begun to pursue such opportunities. One Maine group, for example, had secured access to discounts available to hospitals managed by Quorum Health Resources (a hospital- management corporation based in Nashville, Term.) and had begun to explore the possibility of shared lab services and joint recruiting for mental health providers. However, for the most part, sharp competition among providers tended to undermine efforts by the project or individual coalition members to promote closer cooperation.

Local leadership also was critical to network devel-

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opment. Experience with and receptivity to managed care on the part of physicians or hospital administrators seemed to be a strong determinant of whether networks began forming before providers faced an immediate threat. In several sites with fledgling networks, local hospitals or physician groups had recently hired administrators who had extensive managed care experience in other settings. (The medical director of the Martinsburg/ Jefferson PHO in West Virginia, for example, had recently relocated from Kansas, where he had participated in the development of a community- based health plan; the subsequent sale of this plan to an outside MCO motivated his move to West Virginia.) Some respondents mentioned that physician leadership was particularly important in network development, as many rural physicians regard hospital-backed networking efforts with suspicion.

Physicians’ willingness to cede some independence also played a role. In some of the demonstration sites selected by AHCPR projects, physicians were described as ”fiercely independent” and unwilling to form group practices, while in others, physicians had begun to network with, or even sell their practices to, local hospitals. Why physician attitudes differ so dra- matically from site to site is not entirely clear, but managed care penetration-and the extent to which physicians have been forced to deal with increasing admin- istrative burdens-seems to be a factor. 7. Experience in the demonstration sites suggests that

technical assistance projects have little power to spur more rapid change in rural health care delivery systems. The limitations of technical assistance-and the

difficulties projects face in judging the extent to which specific suggestions and guidance will be welcomed by the targeted communities-were particularly evident in the two sites where only loose provider coalitions had formed. Project staff involved in these sites (the two northern Maine counties) concluded rather quickly that, as outsiders, they could not direct the communities toward a managed-care-related outcome or, for that matter, any outcome community members had not selected themselves. Although some observers in Washington County think the project could have taken a more directive role and moved the provider group toward a strategic planning process more quickly than it did, staff thought it necessary to proceed cautiously and focus only indirectly on network building. To facil- itate more effective working relationships among providers who could eventually form an organized system of care, the project provided a part-time staff member for the coalition, helped conduct a health

needs assessment, and funded an analysis of providers’ information systems.

These efforts helped encouraged greater cooperation among coalition members, but the group did not begin seriously discussing its role in managed care until members were approached by the Maine Health Alliance. (A large network of rural PHOs, or hospitals and their associated physicians, the alliance has established contracts with HMOs and recently launched a risk-based product of its own.) Even then, providers in the coalition were inclined to respond individually rather than as a group. 8. It is difficult to assess the long-term effects of the

technical assistance provided to groups that did not have immediate managed care goals. Neither the loose provider coalitions in the two

northern Maine sites nor the community development committees in Arizona, Iowa and Oklahoma made real progress toward network development during the time frame of the grant program. Project staff and other informants argue that improved communication among stakeholders in the health care system and experience taking action as a cohesive group will prove helpful if and when coordinated action is needed to respond to managed care. However, it remains to be seen whether even the loose provider coalitions, which were not formed around a particular managed care strategy, will ever be appropriate vehicles for managed care contracting.

Project staff involved in community development argued that the success of their efforts should be mea- sured in terms of the extent to which community members established a forum and process for health care planning and designed and implemented a strategic health care plan. They also think that the full benefits of the planning process will not be realized for several years because of the time required to build consensus to address issues raised by the planning committee. In Oklahoma, for example, none of the communities had fully implemented its strategic plan by the time the researchers visited, but some had addressed specific objectives, such as recruiting physicians to meet identified needs. Projects that worked with loose provider coalitions also were able to point to some immediate tangible benefits of their technical assistance, such as shared services and joint purchasing. Staff think these activities will benefit the communities regardless of whether managed care ever has a large presence there. 9. The technical assistance needs of fledgling

provider networks are extensive. Experience in sites where networks had formed or

were forming highlights the considerable staff time,


expertise and expense required to form a network capable of managed care contracting. Informants fre- quently observed that most rural providers do not

'

have the "organizational slack or capital needed to support the intense activity involved in launching such a network and noted that many providers that do have the resources are reluctant to assume a disproportionate share of the burden. In some sites, the AHCPR projects were able to fill the gap.

Providers in newly formed or forming networks generally reported that the projects were instrumental in keeping providers actively engaged in the planning process, in some instances by providing direct staff support that providers might not have been able to afford on their own. In the Farmington, Maine, site, for example, a senior project staff member was assigned to provide almost full-time support to the provider group forming the PHO. Projects also provided grant-writing expertise. Staff of the West Virginia project, for example, helped one PHO, the Eastern Panhandle Health Alliance, prepare its successful grant proposal to the Office of Rural Health Policy for a Rural Network Grant, which was awarded in October 1997.

costly legal and management consulting services providers needed to establish their networks and provided or purchased information systems consulting to help providers assess their capabilities and needs. In West Virginia, for example, the project planned to purchase information system hardware and wrote a successful grant application to fund the system. 10. A guaranteed pathway to success in managed care

contracting is not known. The fledgling networks targeted for technical assis-

tance adopted different strategies to participate in managed care. In some sites, the providers involved in PHO formation concentrated on creating an entity for managed care contracting, while in others, providers aimed to market their own managed care product, either with a partner, as in the case of the Western Maine PHO, or on their own, as in the case of Comanche County Memorial Hospital in Lawton, Okla., which first partnered with an MCO before launching its own product.

Which approach will prove most effective remains to be seen. Providers may reap large rewards from developing a managed care product, but experience in the demonstration sites suggests the risks are great. At the time of the researchers' second visit, Comanche County Memorial Hospital had yet to recoup the considerable cost of launching its managed care product two-and-one-half years earlier. However, the hospital

Projects also used their grant funds to purchase the

remained committed to its strategy. The success of the Western Maine PHO's strategy also was uncertain. The PHO was having difficulty marketing its large-group product to employers because of the small size and regional nature of the network. In addition, the new plan had been hit hard by the unexpected entry of other plans into the market. PHO staff and their partners at Health Source Maine, an HMO, were more hopeful about the prospects of their small-group product, which had not yet been marketed at the time the researchers visited. However, some individuals involved in establishing the PHO and developing its managed care products wondered whether the organization had erred in not focusing first on simply contracting with MCOs as a provider network.

Conclusions

The experiences of the AHCPR projects highlight the many challenges involved in promoting managed care readiness through network development in rural areas. The initial challenge for the projects was to identify communities and groups within those communities that could benefit from the kinds of technical assistance the projects were prepared to offer. In many cases, projects targeted provider groups that appeared to have managed care goals and to be moving toward closer cooperation. Some of these groups made sub- stantial progress toward system integration during the three years of the grant program, but others did not, which underscores the difficulties projects face in try- ing to identify sites that are genuinely poised for change, as well as the limitations of technical assistance to bring about change in communities where stakeholders are not strongly motivated to alter patterns of care.

The sites that saw the most progress toward system integration were those in which providers per- ceived some sort of threat from outside their community, in the form of increasing market activity by regional or national MCOs or efforts by large regional hospitals in nearby urban areas to draw rural providers into their networks. In these sites, providers had strong incentives to band together and were able to articulate specific technical assistance needs the AHCPR projects could fill to further their integration efforts.

and their goals less clear. In these sites, projects seemed to focus primarily on providing the support needed to hold the groups together, in an effort to sustain dia- logue that might eventually lead to closer cooperation.

In other sites, provider groups were less cohesive

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These groups, as the least prepared for managed care, were arguably most in need of technical assistance, but because members were not strongly motivated to coop- erate, the technical assistance had few immediate impacts on the health care delivery system. Some observers, including project staff in Oklahoma and Iowa, argue that the more ”managed” forms of managed care, such as HMOs, will never take hold in some areas because the population is too sparse to support an actuarially sound capitated system. It remains to be seen whether providers in the more isolated rural areas of these states will ever face the sort of managed care threat or opportunity that would demand the unified response the AHCPR program was intended to promote.

Source Maine. The project provided the near full- time assistance of a senior staff member (who was asked by the PHO to serve part time as executive director) and helped finance the consulting and legal assistance needed to develop the PHO and managed care product.

In the two more remote sites, the project worked with more loosely organized provider groups to facili- tate community development efforts. In Washington County, the project funded a part-time staff member for the Sunrise Health Care Coalition (SHCC), a group of hospital and health center representatives and physicians who were exploring opportunities for collaboration; conducted a county health needs assessment; and funded an analysis of SHCC members’ information systems.

Appendix: The Agency for Health Care Policy and Research Grantees and Demonstration Sites

University of Arizona. The University of Arizona project set a goal of expanding access to primary care by increasing the availability of managed care in rural areas. This general goal was cast in the context of an existing statewide Medicaid managed care system, the Arizona Health Care Cost Containment System.

The project targeted Pinal and Cochise counties for initial activity, which included developing county- wide task forces, conducting community health needs assessments, and helping develop distance information linkages to a Tucson, Ariz., medical center. The project subsequently expanded into Graham County for a third focused analysis, to inform a community- based task force of options for developing a local managed care product. In addition, the project worked closely with the legislature to adjust statewide projects to direct resources to rural communities throughout the state.

University of Southern Maine. The project based at the University of Southern Maine worked with provider groups in three sites: Farmington County, a community about 90 miles due north of Portland; Washington County, on the central coast; and Aroostook County, on the Canadian border.

In Farmington County, the project provided intensive technical assistance to Farmington Memorial Hospital as it developed the Western Maine PHO and then to the PHO itself as it developed a new managed care product in partnership with an insurer, Health

University of Iowa at Iowa City and the University of Nebraska at Omaha. The project jointly operated by the University of Iowa at Iowa City and the University of Nebraska at Omaha targeted its technical assistance to two sites in each state.

In Grundy and Monroe counties in Iowa, where managed care penetration is low, the project focused on building awareness of community needs and managed care principles by forming community steering committees, conducting needs assessments, and lead- ing workshops on managed care. The project also helped a struggling community hospital develop ties with a larger regional facility.

Project activity in Nebraska focused on a 21-county area in the southeastern part of the state. The project conducted community surveys and funded consultants to support the Southeast Rural Physicians Alliance, a loose alliance of primary care providers, and the Nebraska Independent Practice Association, a provider group composed mainly of specialists, as the two groups worked to develop networks capable of marketing their own managed care products. Activities in the second Nebraska site, in the northwestern panhandle, were curtailed because of lack of provider interest.

University of Oklahoma. The University of Oklahoma project selected two types of sites for technical assistance: “alpha” sites, where vertical integration of the health care system had already begun, and “beta” sites, where managed care had made few inroads. The targeted provider groups in the two alpha sites were the Cherokee Nation, which man- ages its own health care system in northeastern Oklahoma, and Lawton/First Health West, a network


of hospitals, clinics and physicians that serves 13 south- western counties.

When project activities in the alpha sites stalled, partly because of community politics and legal challenges to network development, project staff focused on community development in the dozen or so beta sites. To help community members begin analyzing their health care needs and resources, the project helped form strategic planning committees, conducted health needs assessments and provided targeted research to guide the groups toward the development of strategic plans.

West Virginia University. The West Virginia University project targeted its technical assistance to three provider networks: the Eastern Panhandle Integrated Delivery System (EPIDS); the Southern Virginias Rural Health Network (SVRHN), which includes two PHOs and other providers in five West Virginia and two Virginia counties; and the Partners in Health Network, which includes one tertiary care hospital, 13 community hospitals, and 11 primary care centers in south-central West Virginia.

helped develop structures through which providers could begin to explore collective working arrangements, and funded consultants to advise providers. For EPIDS, which includes a PHO called the Eastern Panhandle Health Alliance, as well as other hospitals and primary care centers across nine counties, the ulti- mate goal is direct contracting with large purchasers. SVRHN has focused on developing a shared electronic patient record system. The Partners in Health Network, which has single signature authority for its 19 members, has taken the first steps toward assuming risk.

Development Institute to encourage mid-career development of physicians, many of whom are involved in network building, and developed the Coalition for Managed Care Options to serve as an educational body on rural health care issues.

The project conducted health needs assessments,

The project also supported a Physician Leadership

Notes

1. Iowa and Nebraska are served by a single project, jointly operated by the University of Iowa in Iowa City and the University of Nebraska in Omaha.

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Documents

Preparing Rural Communities for Managed Care: Lessons Learned