How Can Rural Hospitals Move to Sustainable Health Care?

One-quarter of rural hospitals in the United States, most of which are considered highly essential to their communities, are at a high risk of closing unless their financial situations improve. As these hospitals seek to transition into more sustainable business models, it is increasingly important to understand the role of Potentially Avoidable Utilization (PAU) for hospitals, which is acute inpatient admissions and emergency department visits that might be reduced through timely primary and preventive care.

To alleviate the pressure and fill the information gap, Mathematica developed the Rural Health PAU Dashboard, which measures the proportion of Medicare revenue from PAU at each rural hospital in the United States.

“Rural hospitals often struggle to determine their current PAU levels, which makes it hard to identify opportunities that might exist to reduce them under value-based reimbursement models,” said Alex Bohl, principal data scientist at Mathematica. “This dashboard allows users to query PAU rates for a single hospital and compare a hospital’s PAU rates with its state benchmarks.”

The PAU levels are measured in the dashboard through the following metrics:

1. Admissions for ambulatory care sensitive conditions
2. Readmissions to the same hospital for any cause within 30 days of discharge
3. Potentially avoidable emergency department visits

“Having better information about PAU is especially valuable given the multitude of challenges rural hospitals face to remain open under the current fee-for-service hospital payment system,” added Sule Gerovich, senior fellow at Mathematica. “Identifying the percentage of Medicare revenue from total PAU will help hospital leaders understand how to best improve the value of care they provide to the rural communities.”

Rural hospitals can also prepare to participate in value-based alternative payment models by participating in recently initiated programs from the Center for Medicare & Medicaid Innovation: the Direct Contracting Model and the Community Health Access and Rural Transformation Model.