Lower costs for rural care
The study says cost per Medicare beneficiary is 3.7% lower overall for rural vs. urban beneficiaries, which would represent about $7.2 billion in annual savings if the average cost per urban beneficiary were equal to the average cost per rural beneficiary. Medicare already benefits from $2.2 billion of lower beneficiary costs for care delivered to rural beneficiaries vs. urban.
"When we look at Medicare costs per beneficiary for inpatient outpatient and physician care the cost per beneficiary we see rural costs are 2.7% lower than urban costs," Morrow says. "That doesn't include just the costs incurred in the rural setting. That is cost assigned to the beneficiary. So when the patient goes to Boston for a hip replacement those costs are assigned to his home, not where he had the care."
Access to physicians
In addition, the study found that in rural hospitals physician services payments are 18% lower, and hospital service payments are 2% lower, but outpatient service payments are 14% higher for Medicare beneficiaries. Morrow says that may be due largely to the use of the emergency department for non-emergency care.
"The big issue in rural care that people are stuck on is the access issue," Morrow says. "People talk about there not being any primary care and some of the evidence in our study points to the fact that people go to the rural emergency department during normal daylight business hours at a much higher rate than at all hospitals. We also see the severity level of patients in the rural EDs being lower than that of patients attending any emergency department. That supports the idea that in rural America people use the ED for primary care."
Efficient ED care
Morrow agrees that the ED is an expensive option for non-emergency care. But he says his study found that rural ED patients see a physician 30% faster and spend about 33% less total time in the ED than urban ED patients. In addition, rural ED visits result in less than half the hospital admissions than in other national benchmark reports of all hospitals.