Advisory Committee Report

Health Care Quality:
The Rural Context
A Report to the Secretary,
U.S. Department of Health and Human Services

The National Advisory
Committee on Rural Health
and Human Services
April 2003

Acknowledgements

This report was prepared with the assistance of many people. Their time, feedback and suggestions were critical in helping the Committee meet its deadline and charge.
We wish to acknowledge the hard work of the Committee members in identifying this topic,
developing an agenda and continuously reviewing and editing the multiple drafts that led to the
final report. In particular we want to thank Mary Wakefied for chairing the Report Subcommittee and providing invaluable input. We also wish to thank Keith Mueller for excellent feedback
and timely suggestions. We wish to acknowledge former members, H.D. Cannington, Shelly
Crow, Alison Hughes, John Martin and Tom Nesbitt, for their suggestions, as they participated in
the formation of the report during the early stages. We also wish to thank the current chair,
Governor David Beasley, for keeping the Committee on track during this process.
We also wish to acknowledge the help of Tim Size of the Rural Wisconsin Health Cooperative,
Sylvia Gaudette Whitlock of the American Health Quality Association, Ira Moscovice of the
Minnesota Rural Health Research Center, Terry Hill of the Rural Health Resources Center in
Duluth, Minnesota, Amy Chanlongbutra, a HRSA Scholar, and Marcia Brand and Forrest Calico
of the Office of Rural Health Policy. The report would not have been possible without their
contributions.

Sincerely,
Tom Morris, MPA
Executive Secretary
Staff:
Marcia K. Brand, Ph.D., Director of ORHP
Michele Pray-Gibson, MHS
Emily Costich, MSPH

i

The National Advisory Committee on Rural
Health and Human Services
Chair
The Honorable David Beasley
Darlington, SC
Executive Secretary
Tom Morris, MPA
Rockville, MD

Members
James F. Ahrens
MHA…An Association of Health Care Providers
Helena, MT

Rachel A. Gonzales-Hanson
Community Health Development, Inc.
Uvalde, TX

Stephanie Bailey, BC, MD, MSHSA*
Metro Davidson County Health Department
Nashville, TN

Keith J. Mueller, Ph.D.*
RUPRI Center for Rural Policy Analysis
University of Nebraska Medical Center
Omaha, NE

David L. Berk
Rural Health Financial Services
Anacortes, WA

Senator Raymond Rawson
Nevada State Senate
Las Vegas, NE

Evan S. Dillard, FACHE
Walker Baptist Medical Center
Jasper, AL

Sally K. Richardson
Center for Healthcare Policy and Research, Robert
C. Byrd Health Sciences Center, West Virginia
University
Charleston, WV

Steve Eckstat, DO
Mercy West Medical Clinic
Clive, IA

Monnieque Singleton, M.D.
Private Practice Physician
Orangeburg, SC

Joellen Edwards, Ph.D., NP
East Tennessee State University College of Nursing
Johnson City, TN
Michael Enright, Ph.D.
St. Johns Medical Center
Jackson Hole, WY

Mary K. Wakefield, Ph.D.**
Center for Rural Health
University of North Dakota
Grand Forks, ND

Dana S. Fitzsimmons, R.Ph.*
Pfizer Clinical Consultant
Houston, TX

Glenn D. Steele, M.D., Ph.D.
Geisinger Health Systems
Danville, PA

*Member of Report Subcommittee

**Chair of Report Subcommittee

ii

About the Committee
The National Advisory Committee on Rural Health
The and Human Services is a 21-member citizens’ panel of nationally recognized experts that provides recommendations on rural health and
human services issues to the Secretary of the Department of Health and Human Services.
The Committee was chartered in 1987 to advise the Secretary of Health and Human Services on
ways to address health care problems in rural America. Chaired by former South Carolina
Governor David Beasley, the committee’s private and public-sector members reflect wideranging, first-hand experience with rural issues—in medicine, nursing, administration, finance,
law, research, business, and public health.
For the first 15 years of its existence, the Committee focused only on health issues. In 2002, the
Secretary expanded the focus of the Committee to include human service issues as an outgrowth
of the Secretary’s Rural Task Force. The Task Force spent a year examining how the U.S.
Department of Health and Human Services could better serve rural communities, and one of the
key findings of the resulting report is that health and human services are closely linked. In
recognition of this link, the Secretary added five new members, all experts in the areas of delivering human services in rural communities, to the re-named Committee (NACRHHS). These
Committee members will be appointed by June of 2003.
Each year, the Committee, which meets three times a year, submits a report on rural issues to the
Secretary. In addition to the report, the Committee may also produce white papers on select
policy issues. This report on health care quality is the result of the work of the Committee
during the past 12 months.

iii

Table of Contents
EXECUTIVE SUMMARY .................................................................................... 1
INTRODUCTION .................................................................................................. 3
HEALTH CARE QUALITY: THE RURAL CONTEXT................................... 6
Quality in the Rural Context ................................................................................ 6
Rural Quality: The Research Perspective ........................................................... 10
The Federal Role ................................................................................................ 12
A Vision for the Future ...................................................................................... 20
RECOMMENDATIONS ..................................................................................... 22
ENDNOTES .......................................................................................................... 24
ACRONYMS USED ............................................................................................. 26

iv

Executive Summary
Health quality and patient safety has been of
interest to the National Advisory Committee
on Rural Health and Human Services throughout its tenure. The Committee has issued a
series
of recommendations on this topic since
.
1988. Most recently, the Committee published
a report on Medicare reform in 2001, which
included a chapter on quality as it relates to
Medicare. The issue of health care quality,
though, has implications beyond Medicare.
Because of that, the Committee has decided to
revisit this issue in greater detail and devote its
2003 annual report to this topic.

high volume of patients with an emphasis on
inpatient care and technology-intensive services. The rural setting focuses more on
ambulatory care and features a much lower
patient volume. This is not to say that rural
residents should expect or receive a lower
quality of care. But, as the health care system
takes new action to improve patient safety and
to ensure the quality of health care services, it
is important that any interventions take into
account the unique circumstances of rural
health care providers, patients and their communities. There are examples where this has
not occurred. One is in the area of accreditation. Past efforts in this area have not recognized the simple fact that rural facilities are
less likely to take part in accreditation activities such as the Joint Commission on the
Accreditation of Health Care Organizations
(JCAHO) because of a perception that the
process is not always relevant to them. There
are many other examples as well.

This report seeks to examine the current state
of the debate over health care quality and
patient safety and how it affects rural communities. The focus on improving quality and
reducing medical errors has been gaining
momentum for the past few years thanks to the
release of the Institute of Medicine’s 1999
Report, To Err is Human, and two subsequent
reports focusing on health quality. These
reports, as well as efforts by the National
Health Quality Forum and several influential
business groups, have put the issue of quality
near the top of the nation’s health care agenda.
This has been a welcome development, but
while the Institute of Medicine (IOM) reports
have spurred an important dialogue on this
issue, there has been little attention to the rural
implications.

While health service researchers have brought
a great deal of energy to the larger global
issues of quality and patient safety, they have
given only limited attention to the rural context. The Medicare Payment Advisory Commission (MedPAC) and a small number of
rural health services researchers have tried to
shed light on the rural issues in recent years,
but more work needs to be done.

The Committee believes that there are important distinctions between the rural health care
delivery system and its urban and suburban
counterparts, and that those distinctions are
important to understand within the larger
debate. The difference is driven primarily by
scale and scope. The urban setting features a

The Federal government continues to play a
strong role in any activity relating to health
quality and patient safety. The Centers for
Medicare and Medicaid Services (CMS), the
Agency for Health Research and Quality
(AHRQ) and the Health Resources and Services Administration (HRSA) all administer

1

programs that have a direct role in ensuring
quality of care and patient safety. The Medicare conditions of participation and other
regulatory requirements are among the more
visible policy levers for ensuring patient safety
and promoting health quality. This is particularly true for rural communities, which are
more dependent on Medicare and Medicaid
revenue than their urban counterparts. CMS’
Quality Improvement Organizations (QIOs) are
charged with helping Medicare providers
across the country improve the quality of care
delivered to beneficiaries. AHRQ’s ongoing
research and demonstration work in health
care quality is relevant for the entire health
care system. HRSA, through a number of its
grant programs for community health centers
and rural hospitals, provides needed resources
at the community level for specific quality
activities.
Although all of these programs play a key role,
there is also considerably more they could do
to meet the needs of rural communities. The
Committee provides a series of recommendations to begin that process. The Committee
also offers a framework for improving quality
in our health care system in a way that includes
rural providers and patients in a fair and
equitable manner. The Committee believes
that rural communities may provide the best
starting point for identifying and testing new
strategies for improving health care quality and
protecting patient safety. The Committee
hopes this report will support a renewed focus
on quality improvement activities within the
Department that engages rural communities
and providers, and that also ensures that these
efforts permeate throughout all of the relevant
parts of the health care system.

2

Introduction
Improving the quality of health care delivered
across America is neither a rural or urban issue
but rather a concern that touches all providers
and consumers of health care services. The
country stands at a crossroad on health quality
issues. The findings of the IOM’s 1999 report
To Err is Human and its follow-up 2001 report,
Crossing the Quality Chasm: A New Health
Care System for the 21st Century, are a call to
action for the entire health care system. In
2002, IOM released a third report, Leadership
by Example, which challenges the Federal

government to take necessary legislative and
administrative measures to serve a leadership
role for the nation in improving quality and
safety.
IOM’s reports have put a new spotlight on the
issue of quality and been part of a larger
awakening across the spectrum of stakeholders. The Leapfrog Group, a consortium of
more than a hundred Fortune 500 companies,
other large private and public healthcare
purchasers and some hospital members, has
also gotten involved in the emerging health
care quality debate. This business group has
identified three initial patient safety standards
for urban hospitals as the focus for health care
provider performance and hospital utilization
by beneficiaries of Leapfrog members. They
would purchase care from facilities utilizing
the following criteria:

Six Dimensions of Quality
As reported in the IOM report, Crossing
the Quality Chasm, there are six aims to
strive for in order to improve the quality
of care. These aims are neither urban nor
rural, but universal, and provide orientation for where rural communities need to
focus. However, working to achieve these
goals may require different approaches,
considerations, etc. They are the following:

• Computerized physician order entry of
medications
• Intensive care unit physician staffing by
specialized intensivists
• Evidence-based hospital referrals
It is important to recognize, however, that
there is concern about requiring an intensivist
at every facility. Other alternatives such as
having a regional intensivist who can monitor
patients in the ICU via telehealth technology
may be appropriate. Likewise, a regional
approach would be reasonable for computerized physician order entry. The challenge lies
in understanding what these kinds of quality
standards mean for rural communities and
whether they are relevant. While the Leapfrog
Group initially focused on urban measures, the
Group has recently devoted attention to consideration of patient safety standards for rural

· Safe Care—avoiding injury to patients
· Effective care—providing services
based on scientific knowledge
· Patient-centered care—providing care
that is responsive to individual patient
preferences
· Timely care—reducing waits and
harmful delays
· Efficient care—avoiding waste
· Equitable care—permitting no variation
in quality because of geographic
location, etc.

3

An E-ICU: A New Quality Initiative?
in widely scattered hospitals. Each patient
in the eICU has a computer screen which
displays vital signs (heart and respiratory
rates, BP and temperature), oxygenation,
lab tests, etc. When the measures or lab
tests deviate from the patient’s baseline, it
triggers a visual alarm. This allows the
specialists to be able to respond to the patient in a timely manner. In addition to
being able to monitor patients from offsite,
specialists also have access to a database
of clinical guidelines to help guide treatment. The eICU is only closed from 7 am
– 12 pm (when the specialists are making
rounds).

New and emerging technologies are often
cited as a way to improve quality of care
and a Virginia-based health care system
believes it has harnessed technology to reduce staff demands and improve quality of
care in its intensive care units.
For years, Sentara Healthcare has been
dealing with a shortage of both critical care
physicians and nurses. As a result, some
hospitals have been forced to staff ICUs
with less experienced nurses. Research has
shown that ICUs staffed by critical care
specialists have lower mortality rates than
those staffed by other providers. Because
an estimated 500,000 out of the four million people admitted to ICUs die, proponents are claiming that approximately
54,000 can be saved if the ICUs are staffed
by critical care physicians.1

One eICU affiliated with Norfolk General
showed a decrease in mortality rates by
28% and the other eICU showed a decrease
of 21% during the six month period after
connecting to the eICU. When comparing
to the total number of patients admitted to
all four units the previous year, statistics
suggest 90 patients survived who would
have previously died.

Sentara created an electronic ICU (eICU)
where specialist physicians and nurses
monitor and help treat critically ill patients

These private, pay base initiatives are important steps. Most quality experts believe that
any movement toward improving quality has to
be a joint public-private effort. However, as
Leapfrog, NQF and related regional business
alliances move toward “report cards”, they
must also remember the rural context. The
rural infrastructure is much more vulnerable in
its private pay base than it is with public
programs such as Medicare or Medicaid. The
private-pay insurance population is often more
mobile, ready to seek care elsewhere if doubts
are raised locally as a result of report card type
activities.

hospitals, realizing that their focus needed to
be system-wide.
The National Quality Forum (NQF) has also
been a national leader on health care quality
issues. NQF has brought together a diverse
membership that includes consumers, public
and private purchasers, employers, health care
professionals, provider organizations, health
plans, accrediting bodies and labor unions. The
members of NQF are working to promote a
common approach to measuring health care
quality and fostering system-wide capacity for
quality improvement.

4

The promise of this technology is as true for
the small hospitals and other providers in the
country’s rural areas as it is for the large
tertiary care centers, teaching hospitals and
specialty care providers in urban areas. There
can be no compromise related to geography in
ensuring the delivery of high quality care. The
challenge is in answering the charge from IOM
and others by responding to and addressing the
very different challenges faced by health care
providers. This must take into account varying
financial, technological and human resources,
and different mixes and volumes of patients.
The current health care system and its ability
to ensure high quality health care delivery is
quite variable across rural communities, and a
richer understanding of that variability is
needed.

Training and Technology
Telehealth and other health care technology-focused applications continue to gain
greater acceptance and use by health care
practitioners, particularly as a way to improve quality of care. In general, health
care professional training programs have
failed to incorporate this into training curriculum in any meaningful way. That has
forced practitioners to learn and adapt
health care technology on the job, which
greatly slows the diffusion of skills needed
to take advantage of new technologies and
the potential they hold for improving quality of care.

This variability, if continued, has the potential
for putting rural America at a disadvantage by
failing to identify, study, apply and develop
approaches that account for the special circumstances of providing quality care in sparsely
populated rural areas. It may also result in a
failure to provide the means with which to
ensure some degree of equity in terms of
resources for all providers and patients.

The Federal Government, through its administration of health programs such as Medicare
and Medicaid as well as the Department of
Veteran Affairs and a host of other programs
has a definite stake in ensuring quality across
the health care system. And, as the IOM’s most
recent report notes, the Federal Government,
by virtue of its size and breadth, may be in the
most advantageous position for driving that
change.2 Together, the various public and
private sectors are focusing on how to improve
health quality in a more coordinated and
sustainable fashion. In so doing, they are
responding to a rapidly changing health care
environment.

The Committee seeks to ensure this does not
happen. This report is an attempt to inform the
broader debate about quality by providing the
rural context. That requires an examination of
how health care is delivered in rural communities and what that means within the larger
discussion of health care quality. The report
will examine some of the current quality
activities underway within the U.S. Department of Health and Human Services and how
those initiatives affect rural communities, and
will make recommendations on those issues to
the Secretary. It will then close with a vision
for how future quality efforts can be as useful
in rural communities as they are in urban and
suburban communities across the country.

The introduction of new and more affordable
technology, the rapidly expanding use of
pharmaceutical drugs to treat an ever-growing
number of diseases and conditions, along with
the great potential of using modern technology
to share information and improve decision
making, hold great potential for improving the
way we treat illness.3

5

Health Care Quality: The Rural Context
they do impact the system’s ability to produce
quality care.

1. Q
uality in the R
ural
Quality
Rural
Context

None of these factors, in and of themselves,
means that rural residents should expect or
receive a lower quality of care. Many sectors
of the health care system face unique challenges. At the same time, all of these factors
have an impact on rural health care providers
and the communities they serve.

The general concept of health care quality does
not change from urban to rural settings. The
focus remains on providing the right service at
the right time in the right way to achieve the
optimal outcome. The only rural-urban variable within that equation is the context. While
the notion of quality remains constant, the
settings in which the care is provided—including their structures and processes (e.g., transferring patients to larger facilities vs. being
able to keep them for observation)—can be
quite different.

Many rural advocates believe that the reimbursement system, with its emphasis on administered pricing and inpatient care that centers
on the use of new medical technologies and
procedures, is designed for a high-volume
healthcare environment with a large population. Few of these characteristics apply in the
rural environment. Added to this is the paradox that many rural providers, particularly
small hospitals, tend to have positive overall

The most elementary differences have to do
with scope and scale. The urban setting
features a high volume of patients with an
emphasis on technology-intensive and inpatient services. The rural setting focuses more
on ambulatory care and features a much lower
patient volume. Rural health care systems tend
to take care of more elderly patients and
patients with more advanced or chronic conditions possibly due to the delays in getting
health care. Rural residents, particularly those
located in more isolated and sparsely populated communities, have higher risk factors
than the general population.4 Rural areas also
face greater shortages of health care providers
such as radiology technicians, pharmacists,
nurses and, particularly, specialists. In addition, reimbursement for providers who practice
in rural areas tends to be less than their urban
counterparts, particularly for Medicare patients.5 While issues of workforce and reimbursement are not explicitly quality issues,

Volume and Errors
When looking at errors in rural hospitals,
it is important to focus on not only the number of errors, but also the type. As noted
in the working paper, “The Environmental Context of Patient Safety and Medical
Errors,” a possible connection between
volume and error type is noted. The authors infer that different types of errors are
made at low-volume versus high-volume
facilities. For instance, lower volume facilities tend to have more errors due to
“under-learning” while higher volume facilities have more errors due to “over-learning.”6

6

Rural Medical Error Study Offers a Framework
Initial findings from a study of medication
errors in four rural hospitals in Nebraska
show that these facilities had error rates
similar to those found in prevailing national
medication error reports.

Specifically, 98% of the errors reported by
the four pilot hospitals and 96% of errors
reported to MedMARx did not result in
patient harm. The majority of reported errors in both databases occurred during the
administration and documentation phases
of the medication administration process.
The three most frequent error types in both
databases were omission, wrong dose, and
wrong drug.

The Nebraska Center for Rural Health Research at the University of Nebraska Medical Center is piloting a project to evaluate
a system of data collection and analysis regarding medication errors in four small
rural hospitals in southeast Nebraska. The
purpose of the project is to determine if
pooled data and shared resources can overcome rural barriers to patient safety and
quality. An interim evaluation of 225 error reports completed seven months after
the project was implemented shows that
the severity and nature of the medication
error reports from the four pilot hospitals
were similar to those in the U.S.
Pharmacopeia’s national MedMARx database of medication error reports.

The authors emphasize two emerging lessons from the interim evaluation. First, aggregation of data with resource sharing and
a common reporting form can overcome
barriers in small rural hospitals so that the
baseline measurement and monitoring of
patient care processes necessary for patient
safety and quality improvement initiatives
is provided. Second, the overall quality
and systems problems present in medication administration in four small rural hospitals are similar to those in the larger, urban facilities represented in the MedMARx
database.

margins, but negative Medicare margins. Even
so, rural hospitals are highly dependent on
Medicare revenue and although private payers
pay them above cost, this represents a smaller
proportion of their payment base when compared to urban hospitals. A resource disparity
for many rural health care providers exists
because of scale and an inability to build
reserves for special investment purposes such
as expensive information systems, which can
be a means toward quality improvement.
Some rural advocates point to Medicare policy
that pays rural providers at a lower level than
their urban counterparts as contributing to the
resource gap.

Rural providers have also struggled to fit into
urban-based quality measures. For example,
the Joint Commission on the Accreditation of
Health Care Organizations (JCAHO) accredits
hospitals, and that stamp of approval has
become a proxy for quality health care.
JCAHO accreditation, however, is another
example of the rural-urban difference. While
the JCAHO accreditation is a staple of urban
facilities, some rural advocates or rural
providers themselves question the value of the
process in terms of the relevance of the
measures. Of the approximately 2,200 rural
hospitals in the United States, 58 percent are
currently accredited by the JCAHO.7

7

The reasons for this moderately low participation rate are varied. The JCAHO process is
expensive and time consuming. Rural facilities with minimal financial and staffing resources often opt not to seek JCAHO accreditation. Still other rural hospital administrators
say the process has little relevance for rural
providers and is primarily geared toward urban
providers. Many rural providers complain that
the process diverts valuable resources in both
personnel and associated computer costs.

state licensing regulations and pressure from
commercial payers. In the special case of
Critical Access Hospitals, there is a full on-site
review for certification as a CAH, with a
second review one year later. JCAHO has also
developed an accreditation process for CAHs.
In 1997, JCAHO began an initiative named
ORYX to build performance-based outcome
measures into its accreditation process. While
numerous vendors stepped forward to supply
hospitals with JCAHO-approved performance
measurement systems, only a few catered to
smaller rural facilities. Rural hospitals not
participating in the JCAHO accreditation
default to the state survey and certification

Nonetheless, rural hospitals and other
healthcare providers meet standards of care as
related to quality, for the purpose of complying
with Medicare conditions of participation,

Technology Can Alter Local Perceptions of Care
dents were asked about their perception of
the quality of their local health care system, understanding of telemedicine, use of
community and non-community primary
and specialty medical services, and reasons
why they would travel outside their community for health care services. Between
April 2000 through September 2001, 182
consultations from 16 clinical specialties
occurred with the help of telemedicine.
Results of the questionnaire surveys
showed that residents’ opinions towards
the quality of local health care increased
favorably after the introduction of
telemedicine. In addition, the survey
found that residents who perceived their
local health care services to be of poor
quality tend to leave their communities in
search of services. Perception of health
care quality is associated with patient satisfaction, which can have an impact on the
financial viability of the community.

The perception of quality often plays a selffulfilling role in rural communities.
A recent study by the University of California-Davis8 looked at the role technology played in local perceptions of quality
of care. The study, “Perceptions of Local
Healthcare Quality: The Impact of
Telemedicine on Seven Rural Communities,” looked at seven Northern California
rural communities. UC-Davis surveyed
them over the phone before telemedicine
was introduced into their community and
then again, approximately one year after
initiation of the technology. Each participant community was chosen because it is
considered a medically underserved area
(MUA), a medically underserved population (MUP), or a health professional shortage area (HPSA). A randomized, controlled design study was implemented to
obtain 500 completed pre- and posttelemedicine surveys, respectively. Resi-

8

process which is the Federal Government’s
vehicle (through Medicare) for assuring quality. This is, however, a very weak vehicle
since some states lack the expertise and resources. JCAHO, however, has indicated an
interest in working with rural providers to
address their concerns and some progress has
been made. In recognizing the unique characteristics of some rural healthcare providers,
JCAHO is reaching out to provide an accreditation process specifically tailored to Critical
Access Hospitals, as is the American Osteopathic Association. While these are positive
signs for the future, it remains to be seen
whether these efforts are relevant and positively impact quality across the rural spectrum.

offices of small group practices or individual
clinicians, settings for which very little quality
measurement exists.”9 This would allow the
focus to also include quality measures for
common conditions ranging from diabetes to
depression.
By expanding the focus of quality activities,
experts could also begin examining how new
technologies are incorporated and how different levels of providers can work together. For
example, patients needing extended stays in
intensive care units (ICUs) should be treated
by intensivist physicians, either locally or at a
distance, as recommended by the Leapfrog
Group. However, given the cost related to
staffing ICUs in that manner, small ICUs
treating few patients for short stays (presumably transferring others to larger institutions)
as well as those treating patients for longer
stays, need to provide quality care without
intensivists on site. It is important to provide
appropriate care regardless of the length of
stay. This may mean using telecommunications to connect the intensivists to the staff on
site (see Textbox on Tele-ICU on page 4).
Other rural hospitals that are unable to treat
patients in their ICUs (if they have them), will
nonetheless need to be prepared to treat, or at
least to stabilize, patients with conditions
normally treated in an ICU. Appropriate
standards would specify how that should be
done.

Collecting and analyzing data is fundamental
to quality improvement, and clinical data
reporting requirements help accomplish this
objective. However, the infrastructure (human
resources with quality knowledge, and technical resources such as information systems)
necessary for making this happen require
financial investments that rural facilities with
fairly fragile financial circumstances will have
trouble meeting. This is supported by the IOM
report Leadership by Example: Coordinating
Government Roles in Improving Health Care
Quality which states that “a similar substantial
grant program should be considered to assure
the proliferation of an information technology
infrastructure that can ultimately support
clinical care and enable performance measurement as a seamless process.”
New initiatives are needed which develop
measures relevant to the types and characteristics of providers found in most rural communities. To date, the emphasis has been on the
inpatient setting; most rural experts believe
that the emphasis eventually needs to include
the ambulatory setting. As IOM notes, “a large
proportion of care, particularly in the management of chronic illness, is delivered from the

9

2. R
ural Q
uality: The
Rural
Quality:
R esear
ch P
erspectiv
erspectivee
esearch
Perspectiv

A Rural-Urban Difference?
A study conducted by the University of
Washington finds that smaller hospitals
may be less likely to follow a standard of
care for heart attack victims.

The body of literature focusing on quality of
care in rural areas is relatively modest.
Rosenblatt and Moscovice wrote one of the
first major pieces that focused exclusively on
the rural context of quality.10 Subsequent
research has focused on JCAHO accreditation
for rural hospitals and disease-specific quality
studies with an eye toward teasing out rural
and urban differences. Few of these studies
have been national in scope.

The study reviewed the records of 135,759
Medicare beneficiaries age 65 and above
from February 1994 to July 1995 and examined the quality of care provided to
Acute Myocardial Infarction (AMI) patients. It concluded that patients discharged from rural hospitals were less
likely to receive several of the recommended AMI interventions than those discharged from urban hospitals. However,
in no geographic classification (urban,
large rural, small rural, remote small rural) were all hospitals adhering to all guidelines (for example, the percentage of patients receiving aspirin during the first 24
hours ranged from a high of 55.9% in urban areas to a low of 47.8% in remote small
rural areas). The proportion of hospitals
in urban and rural locations with complete
adherence to all recommendations was
nearly identical.13

In 2001, MedPAC produced its first-ever report
focused exclusively on rural Medicare issues
that devoted a chapter to the issue of quality.11
The report noted that quality of care delivered
to Medicare beneficiaries and the beneficiaries’ use of recommended services was similar,
with the only exception being those rural
beneficiaries in the most isolated areas. Rural
researchers and experts generally supported the
points raised in MedPAC’s discussion of rural
Medicare quality issues.
There was, however, one notable exception.
The primary difference of opinion centered on
MedPAC’s concern about low patient service
volume in rural areas given what the Commission cites as mounting evidence that shows a
link between higher volume furnished by
acute-care hospitals and improved clinical
outcomes. An analysis of the MedPAC report
noted that the majority of services where the
volume-outcome association has been made
are for services not routinely provided in rural
facilities, such as coronary artery bypass graft
surgery, and are procedures for which rural
populations are usually referred to urban
facilities.12
The Committee’s previous work on this issue
concurs with findings of RUPRI as it relates to

concerns about volume. While volume is a
commonly cited influence for factors that
differentiate urban and rural settings, the
Committee is concerned about relying strictly
on volume-outcome measures of quality. It is,
however, a proxy for a variety of other things
that may be occurring, including the mix of
providers available, their clinical background,
the level of technical support for clinicians, the
health status and usage patterns of the population, the availability of resources, and the
access to services, to name a few. Furthermore, there is a significant need to expand

10

quality measurement and improvement beyond
the inpatient setting.
The questions are how to ensure high quality
for frequently performed interventions and
how to address procedures that may not be
frequently performed but still must be done in
a time-sensitive way to achieve optimal patient
outcomes. For example, the administration of
clot-dissolving drugs in the event of myocardial infarction or stroke must be done promptly
and cannot wait for transportation. Quality of
care is compromised with a potential impact
on patient outcomes if these procedures are not
performed in a timely manner. Given the low
volume of this procedure in a rural setting, it is
unlikely it would stand up against an urban
tertiary care center if assessed only through the
standard volume-outcome relationship. For
any individual patient, including those in a
rural setting, the ability to provide that service
is critical. In these situations, it isn’t so much
a question of volume versus outcome but
rather an issue of measuring services that are
either performed or not performed. The
Committee believes that when volume-outcome measures are applied for rural facilities,
they should reflect common rural procedures.
The Committee believes the infrastructure of
rural health care delivery systems and the
financial reimbursement system that supports
it must assure that the system is able to provide
quality care in those instances when time is
critical. This would include the cost of stocking pharmaceuticals, having trained emergency
medical technicians, maintaining diagnostic
equipment, and having sufficient inpatient
capacity. In many ways, there is a comparative
link to what is being learned as the nation
responds to the bioterrorism threat. Sometimes, the system has to accept “waste” or
“inefficiency” because it needs the capacity to
deliver a service when it is needed.

Given the infrequent demand and limited
resource base, rural residents do not expect to
have immediate access to the full range of
clinical services that are available in most
urban areas. However, people in smaller rural
communities should have a base level of
services available locally that includes, for
example, the ability to stabilize patients prior
to transfer to a distant facility. Several services
should also include telehealth links that allow
for the provision of some vital services via
telehealth technology (such as teleradiology)
that are not available locally. In the end there
are standards of care that must be universally
applied by which all providers should be
judged. For instance, of those services provided in rural facilities, the quality of care and
related patient outcomes should not vary by
rural versus urban facilities or within rural
facilities themselves. Rather, quality improvement efforts should be designed so that where
performance does not measure up, rural facilities have the infrastructure and assistance
within quality improvement programs to
achieve the needed improvement in quality of
care with the expectation that quality meets the
established standard across the range of routine
services. There are other standards that can be
met only when there are sufficient resources
(dollars and expertise) to do so.

11

3. The F
ederal R
ole
Federal
Role
The Congress has pushed DHHS to take a
leadership position on health care quality, and
rightfully so. The reauthorizing and redirection of the Agency for Health Research and
Quality (AHRQ) in 1999 from what used to be
known as the Agency for Health Care Policy
and Research is, perhaps, one of the most
visible signs of a newfound focus on health
care quality within DHHS. The agency has
been designated as the lead Federal agency on
quality of care research, with new responsibility to coordinate all Federal health care quality
improvement efforts and health services
research.14
In addition to AHRQ’s work, several other
DHHS agencies and operating divisions play a
key role in promoting and ensuring quality
health care services. The Centers for Medicare
and Medicaid Services (CMS), through its
administration of Medicare, Medicaid and the
State Children’s Health Insurance Program (SCHIP) has a number of ongoing activities
focusing on quality improvement, although
none of these programs has an express rural
focus.
The Health Resources and Services Administration (HRSA) also has a stake in the ongoing
push to ensure health quality, which includes
the reduction of medical errors. HRSA administers a wide range of grant programs from
community health centers and rural health
outreach to large block grant programs such as
Maternal and Child Health and the Ryan White
program. While these programs affect all
providers, rural communities are most directly
impacted by the community health center
program and those programs operated by the
Office of Rural Health Policy (ORHP).

Federally qualified health centers, about half
of which are either in rural areas or serve rural
populations, have been involved in a number
of HRSA-sponsored quality initiatives for the
past few years. ORHP runs two small grant
programs that focus on improving quality in
rural settings. One focuses on quality activities as they relate to Critical Access Hospitals.
The other focuses on small hospitals with 50
beds or less.
All of these agencies and offices play a key
role in ensuring the quality of health care
services and this report touches only briefly on
the broad scope of quality activity that is going
on across the Department. The Committee,
however, believes that some of the specific
quality activities within CMS, AHRQ, NIH
and HRSA bear further attention.

CMS: Lost Opportunities for Rural?
CMS attempts to ensure quality through its
survey and certification of clinicians and
facilities, the use of conditions of participation
regulations for health care providers and the
ongoing efforts of the Quality Improvement
Organizations (QIOs, which used to be known
as Peer Review Organizations or PROs). Over
the years CMS has invested in quality-focused
demonstration programs, such as coordinated
care demonstration programs, which may
include rural participants. They have not
initiated any rural-specific demonstrations. In
each of these areas, CMS policies affect all
providers but the policies have particular
relevance for rural providers that serve a
disproportionately higher percentage of Medicare beneficiaries than their urban and suburban counterparts.

12

RHCs: New Quality
Guidelines
CMS also certifies and oversees the operations of more than 3,448 rural health
clinics (RHCs), which are key access
points across rural America and which are
located in rural areas that are either health
professional shortage areas (HPSAs) or
medically underserved areas (MUAs).
RHCs were authorized in 1977 to improve
access to care for Medicare and Medicaid beneficiaries and receive reasonable
cost reimbursement under Medicare. Approximately 70 percent of the RHC patient population is insured through Medicaid or Medicare.15
CMS is finalizing regulations that will
create an expanded quality orientation for
RHCs that was mandated in the Balanced
Budget Act of 1997. That provision required that RHCs establish performance
improvement measures through a Quality Assessment and Performance Improvement (QAPI) program and the final
rule implementing that provision is expected to be issued early in 2003. The
new rules will formalize what many RHC
experts say these clinics have been doing
all along. However, as noted earlier, Congress and DHHS need to also provide adequate resources and guidance to help
providers respond to that charge.

The CMS program that most directly reaches
out to providers to work on quality improvement at the community and state level is the
QIO program. Participation with the QIO is
voluntary on the part of the provider. Both this
Committee and MedPAC have noted that the
structure of the QIO program does not contain

strong enough incentives to encourage QIOs to
work with rural providers to improve quality of
care across a range of clinical conditions.20
The QIOs are evaluated based on their ability
to improve state-wide averages on a range of
disease indicators. MedPAC notes in its June
2001 report that the QIOs face incentives to
focus their national quality improvement
activities on high-volume providers that tend
to be in urban areas because that gives them
the best chance for showing state-wide improvement.21 Consequently, QIOs, which
operate on a fixed budget under contract to
CMS, are less likely to focus their efforts on
small low-volume environments.
The QIOs’ new Seventh Scope of Work, issued
in 2002, was very ambitious. It included, for
the first time, a specific task for focusing on
rural populations, paired with an option to also
focus on underserved populations. In addition
to the ongoing quality improvement projects
that were similar to the prior scope of work,
the new scope of work also included significant new activities in public education and
reporting. The first phase of the public reporting began in November of 2002 with the
release of comparative quality data for the
17,000 nursing homes across the country.
Future plans call for similar releases of data for
home health agencies and hospitals and physicians offices. CMS, through the QIOs, is
currently field testing some hospital reporting
measures on a voluntary basis in Maryland,
New York and Arizona.
Although public reporting is positive, there are
some inherent challenges that face rural
hospitals, home health agencies and physicians’ offices. The demand for public reporting puts extra resource demands on small rural
providers and they may need assistance in
complying with the requirements.

13

Final Quality Assessment and
Performance Improvement Condition of Participation for Hospitals
CMS published a new rule for hospitals
instructing them to develop and implement quality assessment and performance
improvement programs (QAPI) that will
identify patient safety issues and aid in
the reduction of medical errors. The rule
also allows the implementation of information technology as part of the QAPI
program.
Medicare Conditions of Participation
for hospitals:
· Establish, implement, maintain and
evaluate a QAPI program
· Have a QAPI program that reflects the
complexity of the hospital’s organization and services
· Have a QAPI program that is hospitalwide and focuses on maximizing
quality of care outcomes
· Include preventive measures that
foster patient safety, such as reducing
medical errors
The final rule was published in the January 24, 2003 Federal Register and will
be effective 60 days after publication.

While some consumer advocates welcomed
the release of the data, it caused concern in the
nursing home community. The move to public
reporting put a great deal of pressure on the
QIOs to offer assistance to these facilities to
prepare them for this reporting process. The
QIOs were thus under pressure to do more than
they had previously done and to do so with less
money than they received under the Sixth
Scope of Work. CMS provided $744 million

to QIOs under the Sixth Scope of Work but
then considered providing only $666 million
under the Seventh Scope of Work. Subsequent
negotiations between CMS and OMB resulted
in an agreement to provide additional funds to
support the work burden on the QIOs.22
The requirements for public reporting are a
step in the right direction, provided CMS
works with the provider community and offers
QIOs the financial support to make the process
a success. The initial funding shortfall in the
first year of the Seventh Scope is not a good
start but the subsequent agreement to provide
additional funds for QIOs to aid nursing homes
in their public reporting offers some hope for
the future. It is also important that in moving
forward on public reporting that CMS focus on
more than just outcome measures.
Outcome measures are helpful barometers, but
for most patients in most situations, assurances
that the process of care is of the highest possible quality is more important than specific
outcomes. A health care provider might be
tempted to focus on achieving publicly reported outcomes (“teaching to the test”) while
not devoting sufficient resources to improving
the process of care.
The move toward public reporting by hospitals
has created some concern, particularly among
hospital administrators, about which measures
will be reported on and how the data will be
used. One of the chief complaints is that
simple reporting of outcome measures fails to
capture the full range of quality activities such
as the prevention of errors, and any corrective
actions taken after an error to ensure it doesn’t
happen again. In other words, there is little
context given to the reported numbers.
Some rural administrators are concerned that
hospitals (as well as nursing homes and home
health agencies) with low volumes of patients

14

may have statistics that are skewed. For
example, if a hospital sees just a few patients
with a specific condition and just one outcome
is bad, the percentage reported will be deceptively high. Others say simple objective
measures fail to take into account health status
and co-morbidities, both of which tend to be
worse in rural areas. Finally, some providers
are worried that a good faith effort at reporting
the data may then be used against them in
court. Any of those scenarios could potentially
have a chilling effect on data reporting. The
Committee believes that all of these issues
need to be discussed and taken into account
before the first public reporting takes place.
This is not to say that rural hospitals should not
be a part of any reporting process. In fact, they
should. However, CMS should consult with
rural experts to address questions related to
whether the posting of that data should be
voluntary or mandatory or if it might be
grouped together among similarly situated
facilities.
To its credit, the hospital industry has taken a
proactive approach to the planned reporting
requirements. Late in December of 2002, the
American Hospital Association (AHA), the
Federation of American Hospitals (FAH) and
the Association of American Medical Colleges
(AAMC) announced plans to work toward
having all U.S. hospitals voluntarily report
outcomes of 10 quality measures relating to
the care provided to patients, including millions of Medicare beneficiaries
The 10 measures in three disease areas to be
initially reported in the joint program are in the
areas of heart attack, heart failure and pneumonia. The measures adopted by AHA, FAH and
AAMC are process measures rather than
outcome measures and should work well
across both large and small settings.

Managed Care and Quality
Programs
Much of the quality improvement
projects are done through managed care,
which requires quality efforts through
Medicare+Choice (M+C). Interestingly
enough, Medicare fee-for-service (FFS)
participation in quality improvement (QI)
projects is purely voluntary, and that is
where a lot of rural beneficiaries receive
their care. The special task required for
M+C is more focused and is not helpful
to rural communities.

At one time, rural advocates were hopeful that
the Seventh Scope of Work would include
stronger incentives for QIOs to work with rural
populations. The MedPAC report in June of
2001 generated considerable attention to the
need for QIOs to do more with rural providers.
Despite that promising backdrop, the Seventh
Scope of Work has failed to address some of
the substantive rural concerns in how it is
structured. Although CMS did add a task that
allowed QIOs to work with rural populations,
the task was combined with underserved
populations. While the Committee applauds
CMS’ intent in trying to reach out to rural
populations, it is concerned that including rural
in the underserved population task will dilute
this much-needed effort. For example, CMS
relies on QIOs showing improvement on
statewide averages and a QIO will find it much
more cost effective to focus on a high-volume
urban underserved population rather than
reaching out to several isolated rural areas.
The pairing of rural and underserved in one of
the QIO tasks also reflects, at best, a failure to

15

AHA, FAH, AAMC
Voluntary Measures
Heart attack (Acute Myocardial
Infarction)
· Was aspirin given to the patient when
admitted to the hospital?
· Was aspirin prescribed when the
patient was discharged?
· Was a beta blocker given to the patient
when admitted to the hospital?
· Was a beta blocker prescribed when
the patient was discharged?
· Was an ACE Inhibitor given for the
patient with heart failure?
Heart failure
· Did the patient get an assessment of
his or her heart function?
· Was an ACE Inhibitor given to the
patient?
Pneumonia
· Was an antibiotic given to the patient
in a timely way?
· Had a patient received a Pneumococcal vaccination?
· Was the patient’s oxygen level assessed when admitted?

understand why QIOs have had difficulty
reaching out to rural communities. At worst,
this pairing undermines work in reaching
underserved populations and looks more like
an attempt to deflect criticism from rural
advocates that the QIOs framework is biased
against rural providers and the communities
they serve.

The reality is the Seventh Scope of Work
serves to ensure that the status quo continues.
Preliminary findings of a study by the University of Minnesota shows that the Seventh
Scope of Work appears to have only modest
potential to increase QIO activities with rural
hospitals.23 In those states that are predominantly rural such as Montana, Wyoming or
Maine, the QIOs will reach out to rural populations because they have to do so. However, in
those states where there are both sizable rural
areas and highly populated urban areas, the
QIOs will still have powerful incentives to
concentrate their work where the greatest
numbers of people are located. The result is
continuation of an unmet need and an opportunity lost for CMS to reach out and work with
rural providers to improve quality in a substantive way. Those that nevertheless reach out to
rural providers should be recognized and
rewarded.
Should CMS seek to improve the ability of the
QIOs to reach out to rural populations, the
agency might also consider coupling this with
renewed support for the survey and certification process. In its June 2001 report, MedPAC
noted that the infrequency of surveys of facilities may affect rural providers more directly.
These providers are most likely to rely on the
survey and certification process to ensure
quality as opposed to outside accreditation.
The surveys for many types of facilities are
performed infrequently for several reasons
including inadequate funding levels.24 Any
effort to improve the ability of the QIOs and
the survey and certification process would
provide needed support for rural facilities as
compared to their urban counterparts.

16

AHRQ: Increasing the Focus on
Rural Health
The AHRQ has been very productive in supporting research and dissemination related to
health care quality and, in the process, has also
contributed significantly to elevating quality
on the nation’s health care agenda. The
agency strives to achieve a balance between its
ongoing research mission and its work on
quality while also administering an evergrowing number of Congressionally earmarked
projects.
The bulk of the agencies’ quality activities
have been global in scope. For example,
AHRQ has worked with CMS to convene a
meeting with other Federal agencies and
interested groups to begin developing a public
survey (patient satisfaction) tool to assess
hospital performance. These kinds of activities have implications for both rural and urban
communities. The agency has a Congressional mandate to support research, evaluation
and demonstration projects in inner city and
rural areas.17 Toward that end, AHRQ has
supported some rural-focused activities and is
currently funding several rural projects, including three rural quality projects. One study in
Montana looks at the relationship between
working conditions of health care providers
and the quality of care in rural hospitals.
Another study at the University of Colorado is
developing and testing a patient safety reporting system that will be examined in several
rural settings. The agency also is funding a
study at the University of New Mexico that
looks at diabetes prevalence among Native
Americans.18 The Agency also worked with
ORHP in HRSA to convene a meeting of rural
experts in 2002 to examine issues related to
quality and patient safety in rural communities.
There are plans for a follow-up meeting and a
joint paper by the participants.

Some rural advocates would like to see a more
explicit emphasis on rural-specific quality and
patient safety studies, but others are less
critical. They point out that AHRQ has attempted to build a body of knowledge on
quality that should be helpful to all of the
health care delivery system, including rural
providers. To this end, the Committee believes
it may be helpful to have rural clinicians at the
table with AHRQ to discuss the relevance of
AHRQ projects and how to make them more
applicable to rural areas.
One of the primary challenges faced by AHRQ
is allocating its funding between its research
mission and its quality mission in a way that
supports analysis across the health care system.

Disparities Research at
AHRQ
The Agency for Healthcare Research and
Quality (AHRQ) has focused its funding
on disparities in health care over the past
several years. These investments have led
to an increase in research that includes investigator-initiated research, new training
programs and projects building on previous AHRQ-supported projects.
The current investments for minority and
vulnerable populations are as follows16:
· Minorities - $60 million
· Low Income - $20 million
· Children - $14 million
· Special Health Care Needs - $14 million
· Urban - $11 million
· Women - $7 million
· Elderly - $5 million
· Rural - $3 million

17

Currently, the agency can fund only a small
percentage of studies that are submitted. The
Committee believes the real challenge is
increasing the amount of resources available
for quality-focused projects. The Committee
does not believe the number of urban-focused
projects should necessarily be reduced and
redirected to rural projects. Rather, the
Agency needs enough resources to meet its
ambitious charge and to ensure that rural
interests are adequately represented. To date,
that has not happened. However, the
President’s 2004 budget includes a $50 million
initiative in AHRQ’s patient safety line around
hospital-based information technology solutions, which includes an emphasis on small
community and rural hospitals.19

NIH
The National Institutes of Health (NIH) funds
research projects that focus on health care
delivery systems. Although a small portion of
the NIH portfolio, these projects represent a
big amount of funding given the recent increase in NIH funding. There are opportunities for NIH to work with AHRQ and thus to
build a significant body of research focused on
improving quality of care through improvements in the delivery system. For NIH this
activity would be considered putting the best
services into practice. This research would
need to account for the unique nature of rural
practice locations, which are influenced by
fewer cases. Analyzing specific interactions
may not present a valid portrayal of the quality
of care in that institution because of low
volume. The reality of limited volume and the
limited range of care settings in rural areas
may influence the practices used by rural
providers. That context needs to be accounted
for in any analysis of best practices.

HRSA: Small but Targeted Quality
Efforts for Rural Hospitals
While AHRQ and CMS have the more visible
Federal roles in promoting health quality and
quality improvement, there are two small
programs administered by HRSA that are
reaching out to rural hospitals. These programs, the Rural Hospital Flexibility Grant
program (Flex) and the Small Hospital Improvement Program (SHIP)25, are relatively
new, having been in existence for three years
and one year, respectively. These two programs are but a small part of the overall HRSA
portfolio which focuses more on programs that
reach out to vulnerable communities such as
the poor, the uninsured, those with HIV-AIDS
and those reliant on maternal and child health
programs.
The Flex Program provides approximately $25
million to 47 eligible states for activities
related to helping hospitals convert to Critical
Access Hospital status, promoting rural health
networks, integrating EMS and improving
quality. The states get an average of about
$300,000 each to focus on any of the four
program objectives. In several cases, the Flex
funding has been used to create state-wide
quality improvement networks that set benchmarks on common indicators to measure
quality improvement. In FY 2002, approximately $2.9 million of the Flex funding was
used for quality improvement.
The SHIP program has provided $15 million to
rural hospitals to support quality improvement
projects and/or to address issues related to
transitioning to the new Medicare prospective
payment systems and complying with the
Health Insurance Portability and Accountability Act. A total of 1,400 hospitals received
grants of slightly less than $10,000 each in FY

18

Montana Uses Flex Money to Create a Quality Network
Montana is the birthplace of the Critical
Access Hospital (CAH), so it’s only natural
that the state would be taking the lead on
quality issues facing these small hospitals.

education, medical staff credentialing and
reporting. The facilities have worked with
the State hospital association and the Flex
program to pool data on key indicators and
use those findings to set benchmarks for
quality improvement. The Montana Quality Improvement Network has also worked
with the Montana-Pacific Quality Health
Foundation to promote the use of performance data for nursing homes, home health
agencies and hospitals.

The State has used some of its grant funding from the Medicare Rural Hospital Flexibility Grant program to create a state-wide
quality network among its CAHs. The network has allowed CAHs across the state to
collaborate with each other on a variety of
quality improvement activities, provider

2002 with 28 percent of the hospitals using
their funds specifically for quality improvement.
Respectively, the Flex and SHIP programs
have supported approximately $5 million in
quality improvement projects in rural America
in 2002. While that figure is encouraging, it
also pales in comparison to the QIO program
funding. More help may be on the way, however. The Congress created another grant
program to address quality concerns in rural
communities in the Safety Net Bill that passed
late in 2002. This program, the Small Health
Care Provider Quality Improvement Program,
which will provide small grants to rural health
clinics and small hospitals, has been authorized but has not yet received an appropriation.

but quality is one of only several program
priorities areas as outlined in the original
legislation. These grant programs have been
enormously helpful, yet they have barely begun
to address the larger resource needs facing
rural health providers.

While these activities have been a step in the
right direction, they are but a small step. For
example, the SHIP program’s 2002 funding
level of $15 million resulted in an average
award of just under $10,000 for each of the
1,420 eligible hospitals. The Flex Program has
played the role of a catalyst for rural activities

19

4. A Vision for the F
utur
Futur
uturee
The Committee believes that any new strategies which emerge to address concerns over
health quality need to have broad input and
participation from the health care system. To
date, the rural voice has not always been a part
of those discussions. The history of the health
care system has been dominated by a top-down
diffusion strategy that has often served to
isolate or ignore rural concerns. This has been
true on the reimbursement side and the clinical
side of health care where patterns of care,
clinical research, and new technologies are
often introduced and designed only with large
tertiary care centers in mind. This model,
unfortunately, has served to delay the introduction of new knowledge and practice patterns in
rural areas given the time it takes for innovation to trickle down into smaller, often geographically isolated environments that are
often resource challenged. Some rural advocates believe that when it comes to quality
improvement, a “trickle down” strategy to
rural areas will never work without addressing
the existing resource inequities that exist
between urban and rural providers. In addition, the ability to bring about real change and
improved quality in rural environments requires a focus beyond inpatient care to also
include the ambulatory and post-acute care
setting and preventive elements of health. So
far, the inpatient sector has received the bulk
of the attention.
To date, the discussion has been largely global
in nature. This runs the risk of assuming that
rural communities are simply a subset of urban
communities and that what works in urban
areas will automatically be appropriate for
smaller settings. This pattern has been true
from the IOM studies to the bulk of the quality
work done by AHRQ and CMS. It speaks to a
fundamental failure to take into account how

rural health care delivery often has characteristics different from urban systems, including
challenges in acquiring content on quality
improvement for practicing professionals and
in upgrading information systems. There are
also differences in providers with different sets
of skills and a different mix of patients, services and potential sample size. This is not to
say that quality is lower now in rural areas, nor
that patients treated by rural providers should
not expect the highest possible quality care.
Rather, the reality is that the environment is
different. Quality improvement activities
predicated on 500-bed tertiary care hospitals
that focus on high-tech and resource intensive
procedures have little relevance for small rural
hospitals. Unfortunately, the majority of the
quality discussion to date has failed to acknowledge urban-rural differences.
The ongoing debate and focus on quality,
however, offer a new opportunity for the health
care system in general and rural communities
in particular. The rural setting may, in fact, be
the optimal location to introduce new quality
and patient-focused activities. In fact, in this
instance, the entire health care system might
be better served by a reversal of this typical
diffusion model. As we look at ways to improve the quality of primary and ambulatory
care and chronic care management (issues that
resonate across the health care system regardless of geography), rural settings offer a unique
laboratory. By testing new strategies in these
communities and then allowing the successes
to diffuse toward larger volume environments,
we can ensure that we develop common sense
solutions that can be translated to multiple
environments.
The Committee believes it is time for a more
inclusive examination of health quality that
ensures improvement for each sector of the
health care world. The debate should focus

20

Rur
al as a Test Bed
ural
There are some inherent advantages in
using rural communities as a test setting
for quality improvement efforts. Many
rural areas have geographically disparate
patient populations that are fairly static,
often with multiple generations living in
relatively stable settings. This stability
could allow researchers to analyze quality-focused innovations with a longitudinal focus more easily in rural areas than
in more fluid suburban or urban areas. In
fact, if one takes the approach championed by Don Berwick and other leading
quality experts and begins focusing on
disease-specific outcome questions, the
assessment of quality is not near-term but
long-term. That kind of longitudinal
analysis of chronic care may be easier to
conduct in rural settings.

more on what the future will bring rather than
trying to retrofit past strategies that have
served only to perpetuate the status quo. That
lesson is true across both rural and urban
settings.
The continuing debate over how to ensure
access to high-quality health care services
across the health care system is a unique
opportunity to affect change, especially for
rural providers and the patients they serve.
They have often been left out of the discussion
in the past and it is imperative that this does
not happen again. As the Federal government
and the private sector discuss ways to improve
care, it is essential that rural interests be a part
of that larger discussion.
To date, that is not happening. As the IOM
notes in its most recent report, the Federal
Government occupies an incredibly influential

position for promoting quality across the
health care system and should use that position
of authority to set the standard for improving
quality of care in the health care system26. The
Committee would take that one step further.
The Federal Government, and the Department
of Health and Human Services in particular,
have a responsibility for ensuring that its
quality improvement activities work as well in
rural communities as they do in urban communities. The Committee would further propose
that the Federal Government and DHHS urge
the key players in the private sector to take the
same approach.
The Federal policy levers for promoting
quality improvement in the health care sector
are tied most directly to CMS and AHRQ. By
and large, these activities have not proven very
adaptable to rural providers. DHHS’ quality
efforts sometimes reflect an unintentional but
very real urban focus that often is not relevant
for rural communities. CMS’ QIO program
and AHRQ’s current efforts are examples of
this phenomenon.
The current pace of quality activities, initiatives, studies and findings continues to increase. That, overall, is one of the more
positive developments in the health care
system in the past few years. One of the
challenges facing rural communities is reacting
to so many possible directions all at once.
NQF and DHHS can play a unique role in
helping to link all the parties together. More
discussion is needed to help rural leaders
survive and grow in a world where people are
increasingly “steered” from one provider to
another based on “report cards”. The Committee believes the health care system at large
needs to move from this positive but somewhat
chaotic state to some alignment where it can
invest in improvement in a way that is relevant
to all levels of care.

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Recommendations
CMS
• The Secretary should work with CMS to promote demonstrations that examine how reimbursement might be used to promote quality improvement in the rural setting.
• The Secretary should increase funding for state survey and certification activities. The survey
and certification agencies are consistently underfunded and this has a disproportionate effect
on rural providers given their heavier reliance on using the survey and certification program
and less reliance on accreditation compared to their urban counterparts.

Quality Improvement Organizations
• The Secretary should amend the Seventh Scope of Work for the Quality Improvement Program to make this program more relevant for rural communities. This would include creating
a stand-alone task focusing on rural health. It would also include a new evaluation methodology for reviewing the work of the Quality Improvement Organizations that includes more
localized measures of areas with populations that suffer health disparities. The sole reliance
on measures of state-wide improvement acts as a disincentive for working with harder-toreach populations.
• The Secretary should work with OMB to increase funding for the QIOs to encourage QIOs to
reach out more meaningfully to rural communities and to help providers prepare for public
reporting in hospital, home health and individual ambulatory provider settings.

Health Care Provider Reporting
• The Secretary should solicit (via Federal Register notice) input from rural health care entities
in identifying which measures shall be used for public reporting for all healthcare providers
and include not only outcome measures but also process measures. This activity should
promote appropriate benchmarking that compares organizations with similar characteristics
such as geography, size, and volume. This is very important as outcome measures require
statistical significance frequently not available in a typical rural facility due to lower volumes
or that may not be appropriate for rural facilities.

AHRQ and NIH
• The Secretary should work with AHRQ and NIH to ensure that each Agency’s efforts to
translate research to practice include a focus on rural health care quality issues as well as
translation of findings to rural practice, dissemination and adoption of recommendations.
AHRQ and NIH should also identify and examine “models that work” in rural areas.

HRSA
• The Secretary should work with the Congress to fund the new Small Health Care Provider
Quality Improvement Program authorized in Public Law 107-251.
• The Secretary should support re-authorization of the Medicare Rural Hospital Flexibility
Grant program in a manner that strengthens the program’s orientation to promoting quality in
Critical Access Hospitals.

Endnotes
1. Brown, David. “Intensive Care, From A Distance, ‘Electronic ICU’ Helps Cut Mortality
Rates.” Washington Post. June 2, 2002.
2. Corrigan, Janet M.; Greiner, Ann; Erickson, Shari M. Institute of Medicine, National Academy of Sciences. Fostering Rapid Advances in Health Care: Learning from System Demonstrations. November 19, 2002.
3. Committee on Quality of Health Care in America, Institute of Medicine, National Academy of
Sciences. Crossing the Quality Chasm: A New Health Care System for the 21st Century. March
2001.
4. The Centers for Disease Control, National Center for Health Statistics. Health, United States,
2001. Urban and Rural Health Chartbook. August, 2001.
5. The National Advisory Committee on Rural Health. Medicare Reform: A Rural Perspective.
May 2001.
6. Size, Tim, Executive Director, Rural Wisconsin Health Cooperative. Personal correspondence. January 31, 2003.
7. Medicare Payment Advisory Commission (MedPAC). Report to Congress: Selected Medicare
Issues. June 2000. Table 2-2, p. 44.
8. University of California-Davis. Perceptions of Local Healthcare Quality: The Impact of
Telemedicine on Seven Rural Communities. In progress.
9. Corrigan, J.M.; Eden, J. and Smith, B.M. Leadership by Example: Coordinating Government
Roles in Improving Healthcare Quality. The Institute of Medicine of the National Academies of
Science, Committee on Enhancing Federal Healthcare Quality Programs. 2002.
10. Moscovice, I. and Rosenblatt, R. “Quality of Care Challenges for Rural Health”. Journal of
Rural Health 16(2), Spring 2000. p.168-176.
11. MedPAC. Medicare in Rural America.” June 2001. p. 42.
12. The Rural Policy Research Institute Health Panel. Comments on the June 2001 Report of the
Medicare Payment Advisory Commission: Medicare in Rural America. September 28, 2001. p.
11-12.

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13. Baldwin, Laura-Mae; MacLehose, Richard F.; Hart, L. Gary; Beaver, Shelli K.; Every,
Nathan; Chan, Leighton. WWAMI. Quality of Care for Acute Myocardial Infarction in Rural and
Urban U.S. Hospitals. June 2002.
14. S. 580, “The Healthcare Research and Quality Act of 1999,” enacted in the 106th Congress
and signed into law by the President on December 6, 1999.
15. Ricketts et al., p. 5 and 8.
16. Agency for Healthcare Research and Quality (AHRQ). AHRQ Resources for Research on
Reducing Ethnic and Racial Inequities in Health Care, December 2001. AHRQ Pub. No. 02P009.
17. S. 580, “The Healthcare Research and Quality Act of 1999”, Section 901(c )
18. AHRQ. Fact Sheet. AHRQ Focus on Research: Rural Health Care. March 2002.
19. President’s 2004 Budget.
20. MedPAC, Report to the Congress: Medicare in Rural America and the National Advisory
Committee on Rural Health, Medicare Reform: A Rural Perspective.
21. Ibid.
22. “CMS and OMB Strike Deal On Three-Year Budget for 7th Scope of Work.” Inside CMS.
Nov. 21, 2002.
23. Moscovice, Ira. Presentation to the American Health Quality Association National Conference, Orlando, Florida. Feb. 7, 2003.
24. MedPAC, Medicare in Rural America.
25. Section 1820(g)(3) of the Social Security Act authorizes these two grant programs. Although
statutorily based in the Social Security Act, the programs are administered by HRSA rather than
CMS.
26. Corrigan, et al. Leadership by Example: Coordinating Government Roles in Improving
Healthcare Quality.

25

Acronyms Used in this Report
AAMC - Association of American Medical
Colleges

M+C - Medicare Plus Choice
MUA - medically underserved areas

ACE (Inhibitor) - angiotensin-converting
enzyme inhibitor
AHA - American Hospital Association
AHRQ - Agency for Health Research and
Quality

MUP - medically underserved population
NACRHHS - National Advisory Committee
on Rural Health and Human Services (also
known as NAC)
NIH - National Institutes of Health

AMI - Acute Myocardial Infarction
NQF - National Quality Forum
CAH - Critical Access Hospital
ORHP - Office of Rural Health Policy
CMS - Centers for Medicare and Medicaid
Services
DHHS - Department of Health and Human
Services

PROs - Peer Review Organizations (now
known as Quality Improvement Organizations
or QIOs)

eICU - electronic intensive care unit

QAPI - Quality Assessment and Performance
Improvement

FAH - Federation of American Hospitals

QI - quality improvement

FFS - fee-for-service

QIOs - Quality Improvement Organizations
(formerly Peer Review Organizations or PROs)

HPSA - health professional shortage area
RHC - rural health clinic
HRSA - Health Resources and Services Administration

S-CHIP - State Children’s Health Insurance
Program

ICU - intensive care unit
SHIP - Small Hospital Improvement Program
IOM - Institute of Medicine
JCAHO- Joint Commission on the Accreditation of Health Care Organizations

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