Tennessee General Assembly to support state’s rural hospitals

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Rural Hospital Transformation Act advances in Tennessee General Assembly to support state’s rural hospitals

NASHVILLE – Legislation to support Tennessee’s rural hospitals so they can continue to foster greater quality of care in the state’s rural communities is advancing in the General Assembly. The Tennessee Rural Hospital Transformation Act of 2018, sponsored by Senator Bo Watson (R-Hixson) and Representative Kelly Keisling (R-Byrdstown), would help struggling hospitals develop economic plans to ensure they are financially viable and continue to provide needed healthcare services.

“While hospitals are certainly part of the healthcare continuum, they are also a critical part of the economic infrastructure of basically every community in which they exist,” said Senator Watson. “This bill seeks to use their economic standing in the community as a way of providing consulting assistance to those distressed hospitals which need to change their operational models so they can be financially successful in an ever-evolving healthcare marketplace.”

The legislation requires the Department of Economic and Community Development (ECD) to establish and manage a rural hospital transformation program to assess viability, identify new delivery models, develop strategic partnerships, and implement operational changes. It also requires ECD to identify contractors to provide consultations to “target hospitals” for the creation of transformation plans. A transformation plan is a strategic plan developed by contractors in close collaboration with target hospitals and community stakeholders to provide recommendations and actionable steps for preserving healthcare services.

“The individuals that work at rural hospitals work extremely hard, but are limited in their assets and ability to seek outside counsel about how best to navigate the complicated world that is healthcare,” said Sen. Watson. “This would provide the ECD and the Hospital Association with a tool to work with those hospitals in order to help them create an economic plan that would make them viable in the communities in which they exist.”

According to the Tennessee Hospital Association, there are 66 acute-care, rural hospitals in Tennessee. Approximately, 20 of these will receive a consultation with a contractor from ECD in order to develop a transformation plan.

Each transformation plan will include:

  • Focused strategies for transitioning the hospital into a sustainable business model in order to avoid or prevent closure;
  • Recommendations for utilizing transformation funding to offset transition costs;
  • Recommendations for funding remaining transition costs with hospital or community resources;
  • Recommendations for ensuring that appropriate and viable services are provided in the target hospital community, serving the best interests of the patients and caregivers;
  • Recommendations for strategic partnerships and alliances where practical; and,
  • Where partnerships are not practical, recommendations for coordination with the surrounding healthcare community including safety-net providers and tertiary hospitals.

Senate Bill 2646 is currently pending action in both the Senate and House Finance, Ways and Means Committees after approval by the General Assembly’s health committees. Senate co-prime sponsors of this bill are Chairman of the Senate Health and Welfare Committee, Rusty Crowe (R-Johnson City), Senator Becky Massey (R-Knoxville) and Senator Ed Jackson (R-Jackson).

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