Physician Specialty Practices: Strategic Survival for Rural Hospitals

“Access to health care” in rural areas usually means access to primary care. But improving access to specialty care can help rural hospitals stay alive.

A cancer patient in a rural area must drive 100 miles to an urban specialty clinic for routine administration of chemotherapy. He feels loyal to his local primary care physician and hospital, and the long drive is not only time-consuming, but also a significant effort when coupled with the physical side effects of the chemotherapy. But what choice does he have? His community has no oncologists.

Rural populations have a great need for specialty physician services. In part, this need is reinforced by high rates of chronic disease often found in rural communities. Despite the need, too little attention has been given to specialty access.

Specialty access affects the financial viability of rural community hospitals. Rural hospitals often lose patients to larger, urban facilities because of poor disease management services and limited access to specialty care locally. Furthermore, while some rural primary care physicians resist greater local access to specialty care, such access actually increases the amount and quality of rural hospital inpatient and outpatient services and helps rural primary care physicians to maintain their patient base.

Rural Practice Characteristics

Both primary care physicians and specialists usually prefer to establish and maintain their practices in urban or suburban areas. Numerous studies have found that physicians may be reluctant to locate in rural areas due to practice characteristics, such as long hours and routine on-call schedules, educational isolation, and economic disincentives.

Efforts to address physician shortages in rural areas have focused on primary care physicians. Relatively little research has addressed the issue of optimal rural specialty practice. In recent years, however, health policy analysts have determined that the United States as a whole has an oversupply of specialists and an adequate supply of primary care physicians, though neither category is well distributed geographically.^a

Some research strongly suggests that physicians, including specialists, will respond favorably to hospital initiatives related to the practice environment. For example, one study identified several strategies that improve physician productivity in rural hospitals, including giving physicians a role on the hospital board, employing them in administrative or clinical capacities, and expanding administrative issues to medical staff committees.^b Interestingly, such strategies were found to have the opposite effect at urban hospitals.

Organizational Models of Rural Specialty Practice

The issues that inhibit primary care physicians from practicing in rural areas are compounded for specialists. Professional isolation can be a great barrier. Equally important is the issue of productivity: can a physician specialist in a rural area see enough patients to make a viable practice? Conversely, can he or she perform enough procedures to remain current?

Three models of specialty practice can help overcome barriers to specialty access in rural areas: the visiting consultant clinic model, the specialty satellite model, and the rural general internist model. Any of these three models can improve rural hospital financial performance. However, each has a unique set of financial implications.

Visiting Consultant Clinic Model

Under the visiting consultant clinic model, urban specialists extend care to rural areas via a schedule of clinics, with referrals coming from local primary care physicians. Visiting consultant clinics are market-driven in that they are a market response to increased competition among specialists in urban areas. They are planned in that they are generally established by hospitals or other organized providers and are based on an assessment of need.

Visiting consultant clinics can benefit rural hospitals by increasing local availability and geographic access to needed specialty service providers, enhancing the ability of rural primary care physicians to manage more complex medical problems, expanding the range of physician services, reducing professional isolation for local physicians, and enhancing revenue from increased use of hospital resources.

Visiting consultant clinics can lead to some potential hurdles for hospitals. First, many healthcare consumers prefer to travel to urban areas for specialty services even when they are available locally.^c Second, although hospital-physician integration measures can strengthen ties with specialists offering services in rural clinics, physician joint ventures may reduce access among poor and disenfranchised populations.^d

The visiting consultant clinic model of specialty practice is prevalent among many provider systems. It generally works well as a vehicle for specialty care for communities that are relatively close to the urban or tertiary hospitals where specialists practice. It is less effective for more rural, isolated areas because of long travel times and inadequate patient numbers.

The financial downside of this model for rural hospitals can be significant. Patients of visiting specialists often end up traveling to the home base of the specialist for office-based or hospital care, which can make it difficult for the local primary care physician to communicate with the specialist regarding these patients. More significantly, patients who travel for care often end up going to the specialist (or the practice) for all their care needs. These patients no longer seek care from local primary care physicians and may not use local community hospitals even for routine services such as gall bladder or joint surgery.

Also, relying on visiting consultant clinics for specialty care, especially in hospitals without competitive access to specialists, can increase costs for local hospitals. For example, hospitals often pay high hourly fees to specialists just to see patients at the local setting, in addition to providing space and equipment. The fees generated are then billed by the practitioner directly to the patient, leaving out the hospital entirely.

Specialty Satellite Model

In the specialty satellite model, locally placed specialists are part of or are linked with a larger practice group based in a larger hospital. That is, their practice office is located in a rural area, and they may serve more than one rural hospital. Success requires that they have formal or informal affiliation with local primary care physicians. Their role is to accept referrals from the primary care physicians for the more complex diagnoses and procedures, but to refer patients not requiring specialty care back to the primary care physicians.

Obviously, this approach increases local access to needed specialty service providers, because the specialists are located in rural areas. This model can also address practice considerations, because specialists may share on-call schedules with the primary care physicians. Finally, the model can help minimize educational isolation, because specialists continue to maintain admitting privileges at urban facilities and retain affiliation with the larger specialty practice.

The major barriers to this model remain recruitment and achieving optimal practice size. Hospitals (and their medical staffs) may be required to take a financial role in recruiting and retention. In addition, local primary care physicians may resist such specialist practices for fear of losing patients permanently. The possible loss of patients appears to be a common concern among physicians, although our research suggests it does not happen if the local specialist has developed a good working relationship (here we mean—a well developed understanding of the roles and responsibilities of each )with the primary care practices. More often, the very real differences in practice style—due to education and experience—that the specialist introduces can improve the quality of care throughout the region.

Under the specialty satellite model, a rural hospital likely will assume some capital outlay associated with establishing the practice. However, the financial advantage to the hospital can be significant. For example, under this model, the hospital will retain inpatient and outpatient procedures that tend to be performed at a tertiary care hospital under the visiting consultant clinic model.

Rural General Internist Model

The rural general internist model takes a very different approach to the same access issues addressed by the first two specialty models. In this model, a general internist with specialty training and interest serves patients of a rural hospital. The internist is not board-certified in another specialty, but may be credentialed for certain procedures, may seek specialty consults when necessary, and may have obtained continuing education related to the specialty area.

Most often, specialty need is in the areas of oncology, cardiology, pulmonology, office gynecology, endocrinology, geriatrics, and rheumatology. With additional education and experience, internists can ably care for such patients who do not require invasive procedures. For example, much of cancer care consists of fairly routine procedures, such as blood tests and monitoring of chemotherapy regimens, that can safely and effectively be performed by a general internist with specialty training. Technology-such as telemedicinethat links rural primary care physicians with specialty physicians can play an important role in making this model work.^e

Even in the absence of such technology, this model must have specialist mentors available to the rural general internist by phone, via the Internet, or in person.

The rural general internist model keeps patients within the local service market and increases specialty access by having a local practitioner serve in lieu of the specialist. It enhances the ability of rural primary care physicians to manage more complex but clinically appropriate medical problems.

Although this model does not readily address concerns about long hours and on-call schedules, it addresses the issue of education isolation. In fact, it relies for its success on the local physician’s access to continuing education and collaboration with other physicians.

The chief barrier to the rural general internist model is identifying willing internists and specialty mentors. Because of the financial advantages to the local hospital and primary care physicians, the hospital or larger system may need to subsidize mentoring and training costs. For the larger tertiary care hospital, a downside may be fewer admissions for less complex procedures. However, the upside can be increased numbers of tertiary care admissions from the rural site, which are especially important in a competitive tertiary referral environment. Another advantage is that local community hospitals can better maintain financial viability, which is especially important for successful multihospital affiliations.

A Strategic Decision

Access to specialty care in rural areas has become an important concern for hospitals and primary care physicians. Far too often, both groups lose patients when access is poor.

Thus, improving access to specialty services is a strategic decision for hospitals and their medical staffs. After carefully examining their specialty access issues and identifying gaps in service, rural hospitals would do well to consider which models of specialty practice might be feasible and commit necessary resources to implement one model or a combination of models. Although each model has unique financial implications, careful planning can help ensure that the models chosen will result in financial gain for the hospital and associated primary care physicians.

The visiting consultant clinic model can be a financial drain on the local hospital and its primary care physicians, and can lead to lower quality of care locally. Consequently, the specialty satellite model and the rural general internist model deserve greater consideration.

Specialty access is of great concern for rural residents. Having adequate specialty physician care, especially for people with chronic disease, translates into better healthcare access and better health status for rural populations.

Footnotes

a. Wakefield, Douglas s., Tracy, Roger, and Einhellig, Julie, “Trends and Implications of Visiting Medical Consultant Outpatient Clinics in Rural Hospital Communities,” Hospital and Health Services Administration, January 1997, pp. 49-66.

b. Morrisey, Michael A., Jeffrey A. Alexander, and Robert L. Ohsfedt, “Physician Integration strategies and Hospital Output: A Comparison of Rural and Urban Institutions,” Medical Care, July 1990, pp. 586-603.

c. Borders, Tyrone F., and Rohrer, James E., “Rural Residence and Migration for Specialty Physician Care,” Health Care Management Review, March 2001, pp. 40-49.

d. Ahern, Melissa, and Scott, Elton, “Regional and Individual Differences in Physician Practices for Joint-Ventured versus Non-Joint-Ventured Physicians,” Health Services Research, June 1994, pp. 785-801.

e. “Telemedicine Project Unites Remote Region with Urban Expertise” Quality Letter for Healthcare Leaders, November 1999, pp. 10-11.