Image by Tina Korsbæk Holm from PixabayOpening an ambulatory surgery center (ASC) in a rural area means significant challenges, including a shortage of skilled health care staff, geographic isolation and a smaller patient base, all of which can make it difficult to achieve high surgical volumes and maintain profitability.
Other obstacles include poor infrastructure, limited access to reliable transportation and supply chain issues that can increase operational costs.
“There has not been much new development in rural health care in the last 20 years, and one challenge facing surgery centers today is that we tend to operate them the same way we did 20 years ago,” Linda Bedwell, CEO of ASCend Specialists, told ASC News. “Twenty years ago, the landscape looked quite different. Now, our case mix is changing. People are aging. Some are actually moving to rural areas because it can sometimes be easier to live there.”
With a renewed spotlight on rural health fueled by a $50 billion federal investment, ASCs could play an increasingly prominent role.
Founded in Gillette, Wyoming, by rural health care leaders, ASCend Specialists offers management and consulting services.
‘One of the biggest challenges for rural health care’
Broadly, staffing and resource availability are pain points in rural health care delivery — and ASCs are no exception.
Bedwell recommended that when examining an area for a potential ASC, it is important to determine which surgeons are present and whether extra surgeons can be brought in.
“Bringing in surgeons is one of the biggest challenges for rural health care,” she said. “So, often surgeons are brought in by health care systems under an employment model. I think it is scary for newer surgeons coming out of residency.”
When recruiting nursing and surgical technicians for rural ASCs, a homegrown approach is often necessary, according to Bedwell.
“We need to focus on growing our own talent because we won’t be able to attract a nurse from Arizona to work in Gillette, Wyoming,” she said. “There are many nursing schools in rural areas. We should partner with them so they can start engaging students early, offer clinical opportunities and help them see the perioperative world rather than just moving into a hospital setting.”
To some extent, this is where the federal government is stepping in to lend support. The Rural Health Transformation (RHT) Fund is another way ASCs can potentially train and develop their own talent.
The fund is a $50 billion federal program, authorized by the One Big Beautiful Bill Act, that provides states with funding to strengthen rural health care access and quality.
States can use this funding over five years to improve health care delivery, support rural hospitals and providers, enhance health care technology, increase the workforce and promote long-term financial stability for rural health systems.
The Centers for Medicare & Medicaid Services (CMS) is managing the program, and states were required to submit their applications for funding through their governor’s office by Nov. 5.
As of Nov. 6, CMS revealed that all 50 states had submitted applications.
“Seeing all 50 states come forward to reimagine the future of rural health is an extraordinary moment,” CMS Administrator Dr. Mehmet Oz. said in a press release. “This program moves us from a system that has too often failed rural America to one built on dignity, prevention and sustainability.”
Submitted applications will next undergo CMS review to ensure completeness and compliance with all requirements outlined in the Notice of Funding Opportunity.
Approved awardees will be announced by Dec. 31.
Half of the funds will be distributed evenly to approved states, while the other half will be awarded based on metrics and applications that demonstrate the greatest potential impact.
States can use funds for projects such as supporting rural hospitals and essential services like emergency rooms. Funds can also be used to bolster rural medical services, invest in health technologies, improve workforce recruitment and retention, and foster strategic partnerships.
Rachel Carey, health care counsel at McDonald Hopkins in Cleveland, Ohio, highlighted a client who opened an ASC in Carlsbad, New Mexico, and required an anesthesiologist. She mentioned that one of her current technicians was interested in starting an anesthesia assistant program, and she showed willingness to help her pursue it.
“To me, that sounds like the right way to use RHT funds,” Carey said. “She has staff who are interested in education, and one of the main focuses there is training and investing in your staff.”
Bedwell suggested ASC leaders have not effectively promoted the industry or informed clinical staff that rural ASCs are a viable option. She said partnering is a way to reach new nurses even before they decide where to develop their skills.
Regulatory hurdles
Health systems can handle regulations, such as certificate of need (CON) laws, because they have more financial and staff resources to navigate the red tape, Carey said.
“I’ve worked on projects where people are interested in investing, but the main health systems in the state have significantly more money to spend on fighting the CON process; the smaller players can’t compete,” Carey told ASC News. “Traditional health systems just play the long game. They obviously don’t want ASCs taking their business. However, things change. Site neutrality is one of those changes. Still, I generally see health systems that want to open their own ASCs rather than partner with others.”
Opening an ASC in Virginia, for example, is difficult because the state doesn’t accept license applications year-round, according to Carey.
“Partnerships are critical,” Carey said. “When I say partnerships, I mean probably giving up some ownership for the betterment and lifespan of the ASC.”
Then there’s unequal reimbursement.
Looking at the wage index for Medicare reimbursement, many rural states are paid nearly 20% less than the national average. Bedwell noted that, when considering this along with the end of the inpatient-only list and the increased transfer of high-acuity cases to ASCs, the numbers don’t always match up.
“Cases are going to come over – they’re higher acuity, higher cost cases that take more man-hours,” Bedwell said. “Insurance companies are pushing cases to surgery centers and Medicare strongly desires cases to move into surgery centers for cost containment, but they have to pay attention to what they’re paying if they want to make it work. That’s the biggest barrier. We want reimbursement based on actual costs.”
Larger health systems in urban areas have greater purchasing power and leverage in contract negotiations with payers, Bedwell explained. Rural ASCs don’t have that and can’t compete.
“If Medicare is basing reimbursement on their case costing, it doesn’t reflect the reality of rural health care,” Bedwell said. “We’ve got to get our elected officials on board with that — advocacy is our only tool to make a difference. It starts at the city level and extends to county commissioners and state-elected officials.”
Making the financials work for rural surgery centers is about relationships, Bedwell said. Administrators need to educate themselves and think outside the box, exploring options like bundles and making themselves appealing to self-insured employers.
“You have to pay attention to your case costing, but you can’t make that your primary focus or you will end up limiting health care to your community,” Bedwell said. “Surgery centers are there for their community, so if we start saying we can’t do Medicare, for example, we can’t do small communities. We need Medicare volume to be part of that.”
