RHI Takes the Guesswork Out of REH Conversions
After years of study and planning, Medicare officially launched its new Rural Emergency Hospital (REH) model on Jan. 1. Experts can debate the model’s strengths and weaknesses, but for rural hospitals facing financial disaster, it all boils down to this question: Would an REH conversion improve the odds of keeping our doors open?
Unfortunately, there’s never been a quick and easy way to know what the numbers look like in a specific community – until now.
Rural Healthcare Initiative is pleased to introduce a first-of-its-kind data analysis tool for rural hospitals weighing an REH conversion. Developed by our partners at Ascendient, the REH Conversion Calculator is a powerful, free tool that uses hard data to assess a hospital’s likely success with the new model.
How does it work? What can it really tell you? And why is it free? We put those questions and more to Dawn Carter, Ascendient’s senior partner and RHI co-founder.
RJ: Let’s start with the most obvious question: What’s the point of this Conversion Calculator?
DC: We’re trying to save rural hospitals from going down an expensive rabbit hole, essentially.
For a huge decision like REH conversion, you want to rely on data rather than guesswork – but data analysis isn’t cheap. The problem is, after reviewing the data, a number of hospitals will find that the REH model isn’t a good fit, anyway. Basically, they’ve invested a bunch of money only to maintain the status quo.
The Conversion Calculator eliminates that up-front financial risk. We’ve standardized the initial analysis so that hospitals can make a data-informed decision without spending scarce resources. If REH isn’t a good fit, you’ve wasted no money to reach that conclusion. If an REH conversion looks like a viable option, then you have some actionable data to inform your next steps.
RJ: What’s the output from all this data analysis?
DC: First, there’s a numerical “suitability score” that ranges from 1 to 10. That’s telling you how well the REH model suits your particular circumstances. Or to put it another way: What’s the likelihood that an REH conversion will help you keep the doors open? That’s really the question that’s driving most hospitals considering a conversion.
Second, there’s a red/yellow/green signal to suggest next steps. Red tells us that the REH model probably doesn’t fit this hospital; they should stick to what they’re doing and try to do it better. If a hospital is red for REH conversion, going any further is likely to be an expensive rabbit hole, as I mentioned earlier.
Green is the opposite. Green says that the status quo is likely unsustainable, and the REH model is worth serious consideration. REH conversion isn’t a silver bullet, but it just might be the thing that keeps the doors open in this case.
Yellow is somewhere in between, and a specific numerical score might fall closer to red or closer to green. In these cases, we might recommend additional analysis that uses internal data for a more detailed understanding of the REH option.
RJ: Can you talk a little about the data itself? What numbers are you looking at and where do they come from?
DC: We use publicly available sources like the American Hospital Directory to pull about a dozen specific datapoints on any hospital that contacts us. Without being too specific, we’re mostly looking at operational and financial data – revenue, utilization, performance measures, market share, that kind of thing.
We then weight the data to emphasize the strongest indicators of operational sustainability. REH conversion can drastically change a hospital’s cost centers and revenue streams, so those things figure prominently in the calculation of a suitability score.
RJ: What’s the cost of all this? And what’s the time commitment?
DC: The cost is zero. We developed this tool to support RHI’s nonprofit mission. And the time commitment is practically zero. All we need is contact info, then we take care of pulling all the data.
RJ: So, a hospital fills out a form, and about a week later, RHI delivers a custom report with a suitability score and directional indicator. What happens then?
DC: After delivering the initial report, we offer a free, 30-minute call to explain the data, answer questions, and think about next steps.
RJ: And by next steps, you mean … ?
DC: In most cases, there won’t be specific next steps with regard to REH. Hospitals that get a red signal – and maybe even a yellow – should probably look for other ways to improve their finances and operations. REH conversion definitely isn’t for everyone.
For hospitals with a green signal, we believe it’s a “go” for further study of the REH model. In those cases, the key data would indicate a good match to the REH model, and it’s worth investing some resources to drill down a little more.
RJ: Just to be a clear, you’re not saying that every hospital with a green signal should convert to a Rural Emergency Hospital?
DC: Absolutely not. REH conversion isn’t a decision that you make based on 12 datapoints alone. You need to think about your mission, your community, your strategic opportunities. That’s all part of a much bigger conversation, and Rural Healthcare Initiative would love to be a part of it.
That’s literally what we’re here for. We have specialized expertise in strategy, operations, facilities, staffing, community relations, regulation – all the areas that inform your decision to convert or to stay the course.
Short of a full consulting engagement, we can also offer much deeper strategic and business analysis based on a hospital’s proprietary data. Sometimes that’s the most budget-friendly way to proceed, especially for hospitals in the “yellow” range.
But I want to emphasize that a number of hospitals won’t need to think about any of that. We found plenty of “red” facilities in our testing with rural hospital candidates – and that’s a good thing. If we can offer a quick, free diagnostic that says, “REH probably won’t solve your problems,” then we believe we’ve done a real service.
If you're a rural hospital executive considering REH status for your facility, please click below to get your REH suitability score and free, custom report. You will be directed to a registration form on the Ascendient website, and your results will be available in about one week.