October 14, 2025 • 23 mins
In this episode, Lynn Barr of Caravan Health and John Budd of ECG Management Consultants discuss the urgent challenges facing rural hospitals, the $50 billion Rural Health Transformation Fund, and strategies to move beyond short-term fixes toward sustainable care models and new payment approaches.
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Episode Transcript
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(00:00):
Welcome to health care upside down, a podcast
by Becker's healthcare and ECG management consultants in
which we'll explore the upsides and downsides of
health care and the industry's most current trends.
I'm Molly Gamble, and today, I'm thrilled to
be joined by two guests. We have Lynn
Barr, founder and CEO of Caravan Health and
president of the Barr Campbell Family Foundation,
and John Budd, partner with ECG Management Consultants.
(00:21):
Lynn, John, thanks so much for joining me
today and being my guest. Yeah. Thanks for
having us.
Thank you.
Well, to get us started, I just shared
a bit about you, your names, and your
titles there, but I know there's more to
your professional stories. Can you share a bit
more about yourselves and your work in health
care? Lynn, can I turn you first here?
Oh, sure. Thank you. So I've been working
on rural health care since 2010
(00:44):
where I, was getting my master's in public
health and and, started working with the rural
stakeholders in the state of California.
And I found that that this is a
constituency
that is very underrepresented
in Washington and and elsewhere
and had tremendous needs, but also a tremendous
heart. And so kind of fell in love,
(01:05):
with rural America, and, I've been working with
them ever since. I under Caravan Health, I
I wanted to support their their journey to
value based care
and organize hundreds of rural hospitals and thousands
of clinics in 44 states in Guam,
saved Medicare half a billion dollars, and paid
half of it to the provider. So,
(01:26):
it's a wonderful group of people, and I
really love working with them.
Lynn, that's so well put. Underrepresented in in
many places, including DC, but, also, like you
said, tremendous heart. Couldn't agree more about the
rural
health care leaders and clinicians out there. John,
let let's turn to you and and learn
more about your background.
Yeah. Thank you. So by way of introduction,
(01:47):
my name is John Budd. I'm a a
partner with ECG Management.
I actually started my career in the back
of an ambulance. So working with some pretty
underserved populations in terms of social determinants of
health and and really thinking about understanding the
safety net that was there. From there, I
moved into trauma center administration and ultimately consulting,
where I've really grown a practice
(02:08):
of focused exclusively
on health system sustainability.
So working with health systems really constantly challenged
to do more with less,
to think about how do we thrive and
survive both strategically and then really in the
nuts and bolts operationally.
In in between there, I've been the CEO
of a medical group in a rural part
of Indiana.
So know pretty distinctly the challenges of how
(02:29):
do we care for a population in an
area that's highly reliant on,
recruiting physicians to to lesser known out of
outside of metropolis areas,
but also relies on things like the Visa
program or alternative funding streams to be successful
in that. So I'm incredibly excited to chat
with y'all today.
I love that perspective you're bringing to this,
John, and starting the career in the back
(02:49):
of an ambulance. I mean, that's a a
pretty special origin point for for this conversation.
We if we had been talking about rural
and community health systems
last year or the year before, it still
would have been a very, very important conversation.
I feel like at this time, the stakes
are even higher,
than they have been in a long time.
These organizations just continue to face financial workforce
(03:11):
access related pressures.
How can you can we just start with
some groundwork and draw the landscape for our
listeners, especially about some of the recent federal
initiatives that are influencing rural hospitals trajectory?
I'd be curious from your vantage points. Lynn,
I'll turn to you first here. What does
the future outlook
for these organizations
look like right now?
Boy, that's a really good question. It really
(03:32):
depends a lot on what the states do
in the next couple of months.
And there's a huge opportunity of $50,000,000,000
in the rural health transformation fund for them
to really
reengineer
how we deliver rural health and create a
sustainable model. But with very little time to
do it, little expertise, it's gonna be really
hard to pull
(03:53):
off. And what I I think everyone's afraid
of is that these cuts are gonna be
the end of rural rural health and that
we're gonna try to Band Aid things for
a little while, and then it's all gonna
fall apart. So we don't really know.
I know that that we really hope
that people are going to take this opportunity
to do true transformation
(04:13):
and create a sustainable path because the path
they're on right now is definitely not sustainable.
Mhmm. John, I'll turn to you here. I
mean, that that fear of this being a
Band Aid approach before things ultimately fall apart
like Lynn said. I mean, that's a it's
a pretty serious concern. What would you wanna
add about the outlook here? Yeah. I think
when you think about where rural health care
(04:34):
and I would say community health care in
general is going nationally, you gotta think about
it with kinda two different lenses. Right?
The first would be,
how do we stabilize immediately?
So the cuts are happening. You know, they're
they're real. They're there. And, honestly, these organizations
are already struggling today. So there's an element
of how do we how do we stabilize
so that we can prepare for transformation? Because
(04:56):
it's it's very hard to transform when you're
in a point where you can't staff or
you're worried about making payroll in the next
couple days. That's that's really challenging, and that
involves rolling your sleeves up and getting your
hands dirty.
I think if you work with rural health
systems, you know that's something they've been doing
for a very long time. So it's kinda
scary because if they could do it, they
probably would have already. Because I would tell
(05:17):
you,
when we talk about innovation in health systems,
oftentimes, you know, big names get that that
draw.
Rural hospitals are some of the most innovative
hospitals that you will ever encounter because they've
had to solve for problems that nobody else
has that's pushed them out of there. So
I think from a a stabilization
perspective,
I think we're asking rural health leaders to
(05:37):
to reach into their bag of tricks one
more time for the next couple months to
say, how do we how do we hold
on long enough to transform? And I think
that's a an existential and really also tactical
question, so we're flipping back and forth. I
think the second piece is exactly where Lynn
is going. I think if you look, there's
no nothing left in the tricks after this.
Right? We can't keep going back to the
well for the same opportunities, the same $3.40
(05:58):
b savings, workforce savings, those types of
things. So now is the time that once
we're there, we have to change the model
of care. And I think that means changing
from an acute care centric model of rural
care delivery to something different.
So I think
now is the time that has to happen
because I don't think these communities really have
the choice anymore in this. And I don't
(06:19):
think that they made the choice to to
lose health care either. So I think when
we look forward, it's it's gonna be critical.
John, I love that point you made about
how these organizations are incredibly innovative. They might
not have the the whiteboards and the centers
of innovation that we saw about ten years
ago really proliferate
among some of the bigger AMCs. But to
your point, the leadership
(06:40):
usually has to wear numerous hats. There's this
concept of frugal innovation that's always humming through
their organizations
and how they're thinking.
So I I really appreciate you making that
distinction. Lynn, was there something you wanted to
add there?
You know, I just think that what John
said is really important about about thinking about
the sustainability
of of where all of this is going.
(07:01):
We can't you know,
one of the comments I've heard from policymakers
is that in all this money, no one's
talking about sustainability.
And it and what what we need is
a different payment model. Alright? We're paying them
99%
of cost, and and and and there's no
commercial. So so we know we're starving them,
and we and we and and we continue
(07:22):
to starve them with sequestration,
which disproportionately has affected critical access hospitals and
rural health clinics.
So so
how do we change the payment model? And
what I'm afraid of is that people are
gonna come out and say, hey. We'll adopt
this technology, and we'll do all this work.
And you guys just do it in addition
to what you already do.
(07:44):
And, you know, we failed with that ten
years ago, you know, when we came out
and said, hey, everybody. Just do electronic health
records on top of everything else
and watched access just
disintegrate
because of the extra because there were no
extra clinicians.
There was no ex you know, there was
an incentive payment, but not an ongoing payment.
(08:05):
So in order for us to fix the
future of health care, of rural health care
in particular, and I would say say all
health care in America, we have to pay
for health. We can't keep paying only for
sickness,
and we have to have a new workforce
that's going to be able to do this
work. So we can't just put this on
these people that are already stretched as thin
(08:25):
as they possibly can be and then ask
them to do more with less money. So
so that's really, I think, what people need
to think about. What I'm not seeing a
lot of coming from The States
is how do we change the payment model,
and that's what we should really be thinking
about. Mhmm.
Lynn, are there any examples or strategies or
(08:47):
or models that you have seen that you
would highlight for listeners when when you're describing
this?
Yeah. So I you know,
so population based payment models are are more
amenable to paying for health than they are
for for paying for sickness.
However, you need a lot of scale. Right?
So you need a you need a big
(09:07):
n. And and in these in these, rural
communities, you don't have that scale. So there's
a kind of a push and pull here.
But, what what I've been thinking about is
is trying to think how would you apply
these funds to create a new payment model.
And I think it would be an all
population payment model. So I kinda worked from
(09:28):
a fee for service backwards perspective and did
a whole budget of what what would the
services have to look like to create health
in these communities.
And this means a whole new workforce of
people that kinda mod modeled on on both,
you know, community health workers and US army
medics. Right? You know, these these people that
have been have been,
(09:49):
you know, trained in, you know, high school
graduates that have been trained and given protocols
and flowcharts
and know how to triage people, but also
can interact individually
and help people get where they need to
go. And so I what I've been thinking
about is a all population payment model, a
$150
per person per year to get this thing
(10:10):
off the ground that that attacks health with
every member of the population,
works on diet, works on nutrition, works on
exercise,
works on processed foods and
and chemicals that maybe we don't really wanna
have in our body and we should be
asking questions about. And so this this sort
of of of approach
(10:31):
would then bring up the health of the
entire population,
particularly in an area where where the health
is worse than the rest of the country,
bring down the total cost of care, bring
down the cost of the state Medicaid budgets,
but also I priced it at a point
that would
create profit for the rural community
that could then sustain the health system going
(10:53):
forward.
So I've created this model called carpe diem,
which I, you know, I'm happy to I've
I've put on LinkedIn. I'll it's open source,
and it's something that based on my experience
in working on payment models
would be a sustainable model for rural America
that could really change the health care of
of of our communities.
(11:14):
Mhmm. Lynn, thanks for sharing that with us
and walking us through that carpe diem.
Is what you've you've titled this, and it
sounds like if listeners are interested, they can
find more information on it.
Great.
But, John, I I wanna turn to you
here because what Lynn just described, I mean,
that's no small feat. When we talk about
changing the cure model, what are some of
the biggest
(11:34):
sticking points of this effort? You know, when
you think about redesigning cure models,
what is is usually where things start to
hit a wall from what you've seen?
Well,
I wanna start by saying it's a huge
feat, but
Lynn is probably not doing herself a a
do of service in the sense that she's
actually done this before. And I think when
you look at the numbers of what Caravan
was able to do on a national scale
(11:56):
and the ability of impacting lives in those
communities with small ends, I think there's there's
certainly,
a proof case as to how you could
apply an alternate payment model and also an
alternative care model to support that.
I think,
you know, we think about the workforce. I
know I've been on podcast with Becker's even
talking about the workforce.
I I think we talk about the workforce
(12:17):
shortage
pretty extensively and how are we gonna solve
it through recruiting, retention, and those types of
things. I think while that's absolutely part of
the strategy of how do we grow our
own in these communities that we have people
who are you know, fully vetted and invested
because I think they're more likely to stay.
I think there's an underlying assumption there that
the work stays the same.
And to me, that's where the problem really
(12:39):
lies. And I think Lynn touched on it
with this idea of, you know, paying for
wellness and moving away from an acute care
based model.
When you look at it on a workforce
basis and you say, what is the need
for caregivers in these communities?
What you see is in the acute care
setting, it's more resource intensive.
So the more that we have patients that
have acute care demands,
(13:00):
the more specialties, the more subspecialists, the more
high training individuals that we have to bring
to those communities to sustain that. And with
volumes being low, you're never gonna get the
scale that Lynn was talking about. So I
think the challenge becomes,
how do you reduce the need for acute
care? And this is true in every single
market, but especially true in rural. So I
think when we look at this, the question
(13:21):
has to become, how do we change the
acute care model? And if we can move
that more towards a care management model that's
more community focused,
that's less focused on how do we deploy
the money associated with the rural transformation funds
to fixing hospitals to how do we deploy
that to building an effective community safety net
to manage this care, I think you're gonna
(13:42):
see a much larger change. And I think
that's gonna change the mix of the workforce
that you need in the future to better
mirror what's available in those communities today and
actually allow you, to Lynn's point, to reinvest
in the communities that are there.
Mhmm. Mhmm. Thank you, John. And I think,
Lynn, what you just described in carpe diem,
I mean, that is sustainability.
I John just mentioned the health the rural
(14:03):
health transformation program, which I wanna get to
next. This is slightly different from what you
described with the redesigned care model. But CMS,
on September 15, announced states can now apply
for funding from the rural health transformation program.
It looks like states have until November 5
to apply. CMS will announce the recipients by
December 31 at the start of 2026.
(14:24):
But, Lynn, let's talk about this because there's
50,000,000,000 available to rural providers
from 2026
to 2030,
and I imagine there is a long priority
list for a lot of these organizations.
How do you think that
states and providers should be thinking about this
fund? How do you think the collaboration between
(14:45):
the states and the providers should be really
structured to
get towards sustainability and the greatest long term
success? So it's not the band aid that
you had voiced before.
Yeah. It's a it's a great question.
So so if you look at the rural
health transformation
program
and the scoring of it,
(15:05):
about half the points, is so there's the
first 25,000,000,000. We're not you know, and that's
that's you got your application in. Right? There's
the next 25,000,000,000.
And about half those points are for these
transformation
activities.
And if you don't apply for any of
those transformation activities, which a lot of them,
you know,
and, like, their their example on page, I
(15:26):
think it was 98 or 99
of the highest scoring possible program you could
put in there was population health models very
similar to what I just described.
And so if you want maximum points on
this and you want maximum funding, you're gonna
have to move into some sort of
value based care population health model that a
(15:48):
lot of a lot of states are like,
I I can't do that. It's too hard,
but it's not as hard as it looks.
I mean, you have to have some basic
principles of how you put this together
in in terms of simplicity for the state,
in terms of the payments,
in simplicity for the providers, in terms of
what they have to do, and also a
(16:09):
a, a way of measuring what you're doing
that allows you to know that you're being
successful. And so, you know, having process measures
along the way and having a rigor in
your program are all gonna score very high.
And I think that when where a lot
of people are going to struggle, a lot
of states are gonna struggle, is they've got
(16:30):
a month,
basically, to come up with a model like
this. They weren't really thinking along these lines.
They weren't understanding
how much of the funding is gonna go
towards these population health models. And if only
a few states apply for some of these
categories, then only a few states will get
the money. Right? And it will only be
divided amongst them. So any category
(16:50):
the states don't apply for is money they
forfeit.
Right?
And if they don't try to get their
heads around how they can do something in
population health and sustainability,
then this is just a Band Aid for
their states. And five years from now, they're
gonna be in serious trouble.
So I really encourage the states to go
deep
and to look at at at these models
(17:12):
and to try and,
in the Carpe Diem model that I put
out there for for states to look at,
this is a framework for you to look
at and go, okay. There is a way
to do this simplistically.
Now Mhmm. I'm the queen of oversimplification.
So when I say simple, it ain't that
simple.
Right? But it's but it there is a
way to do this and to do this
(17:33):
effectively and to actually make a difference in
your communities. And I just
really pray that the the states have the
time and the wherewithal to try to think
through
what they can do to really make a
difference in the future.
Mhmm. Lynn, what I'm hearing you say is
that time is not abundant with this effort.
But to your point too, it sounds like
(17:53):
you're encouraging rural health system leaders
to not be unnecessarily
intimidated by this.
That's right. And I'm I'm sending a copy
of my model to every state. So then
with budgets and everything else, and they can,
you know, take it, blow it up, do
something with it. But I just wanted to
look at it as, like, a starting point
of how you can really make a difference
(18:15):
and how you can score
extremely well on your application. So that's the
other thing is is, you know, 40% of
the fund of the, scoring on this is
about sustainability
and measurement, and this is something that states
you know? I mean, CMMI has not been
able to do this very effectively. So asking
states to come up with this very quickly
is hard.
(18:36):
Look at the model. There's
very concrete ideas that they could follow and
just use it as their own platform to
come up with something
meaningful to get in their application so they
don't forfeit this money to other states. Mhmm.
I'm sure your blueprint will be going a
long way in those states that receive it,
Lynn. That's that's excellent that you're
sharing that and making that accessible.
(18:57):
John, I I wanna turn to you. Is
there anything else you wanna add following Lynn's
remarks on the rural health transformation program?
Yeah. I think so. When you look at
some of the numbers put out by any
NRHA
in this space specifically,
it's important to note that the transformation program
doesn't come back to filling the funding levels
that were there before.
So when you think about innovative models that
(19:18):
need to be there, they need to be
self sustaining beyond the period of the transformation
grants and what's available to them. So you're
gonna see a lot of systems and states,
I think, say, how do we use this
for shiny new capital or potentially how do
we repeat, you know, meaningful use acts and
some of those types of things that are
gonna drive adoption of technology.
I think that's probably a little bit shortsighted
(19:38):
and won't have the effects that need to
be there. So when you look at strategies
as a state to how to address this,
I I think the question is gonna become,
how are you gonna build a model that
when this money runs out in a couple
years,
is going to be constantly refilling that bucket
so that we're keeping being able to invest
in the care in these communities that are
there? So I think when you think about
models that like Lynn is proposing,
(19:59):
the idea that we can actually bend the
cost curve at the end of this and
that we can move away from that acute
care model over time, which I I think
has been elusive in some instances, but many
communities have actually been able to be successful
in it. I think that's the direction from
a sustainability lens you have to take.
I'm just just seconding what John said.
You know, we need to create profit streams
(20:21):
in rural America. We we we our payment
model for rural America has no profit in
it. If there's no profit, there can't be
innovation and sustainability.
And so as you're as the states are
thinking about these models,
create a profit stream
that also reduces the total cost to care
for Medicaid
and for Medicare, and everybody
(20:42):
wins. And that's the goal.
Mhmm. I wanna thank each of you because
I think as we wind down here, this
is a topic that it can be really
challenging. Obviously, there's no easy answers. That's why
rural health is in the position it's in
in the first place. But I think as
you both help me better appreciate from your
remarks, it takes a great amount of ambition
right now, but also a great amount of
common sense,
(21:03):
and and really thinking through so it's not
throwing your hands up and saying, oh, well,
we've gotten here. We have to completely transform,
and
where where do we begin? It sounds like,
Lynn, there are some really effective blueprints in
existence as you've helped us better understand with
Carpe Diem. John, to your point, this is
probably not the best time to start thinking
about shiny new objects with these funds. You
(21:24):
need to focus on sustainability
still. Is there anything that we didn't touch
on in our conversation? Any final thoughts you'd
like to leave our listeners with on this
big topic?
Molly, I just wanna double down on what
you just said.
Use existing payment models.
Use existing codes,
use existing Medicare shared savings program.
(21:46):
Don't try to invent a new new mechanisms,
you know, other than, like, big checks. Right?
Don't don't create new codes.
Don't just stay away from from that type
of innovation and try to use what we
have
to create sustainability.
It's there. We have all the elements.
We just need to organize it.
Yeah, man. I love what you just said.
(22:07):
I think as a health system leader and
and working in sustainability
for for a number of years, I think
the thing that can be disheartening sometimes
is you look at the policy landscape and
how things constantly change. And when you think
about how are we really gonna address what's
in front of us, it's kinda like taking
a crystal ball and you're at best guess
10% likelihood you're gonna get what you need.
(22:27):
And I think that's kind of a glass
half empty way of thinking about it. The
reality is just like rural health systems have
been doing for a long time,
innovation starts within the constraints that we have.
And if you stop kind of waiting for
the answer to change in a federal level
or a macro level, there are tons of
opportunities to use the systems that we have
to care for patients differently.
(22:48):
And what this money is is while by
no means enough to replace what was in
Medicaid,
it is an opportunity to use this in
the near term to say, how do we
how do we redeploy what we have in
a way that's better suited to the communities
we have? So it's it's just an exciting
time and a little bit scary, but I
think exciting opportunity for health systems to do
things differently.
Mhmm.
(23:08):
I appreciate the realism, John, and also the
the half glass full
outlook that you just ended
on. Lynn, John, this has just been a
a really interesting conversation. I wanna thank you
so much for your time and your insights
today. We also wanna thank our podcast sponsor,
ECG Management Consultants.
Listeners, you can tune in to more podcasts
from Becker Healthcare by visiting our podcast page
@beckershospitalreview.com.
(23:29):
Lynn, John, thanks again. Thank you, Molly. Great
job.
Thank you.
Welcome to health care upside down, a podcast
by Becker's healthcare and ECG management consultants in
which we'll explore the upsides and downsides of
health care and the industry's most current trends.
I'm Molly Gamble, and today, I'm thrilled to
be joined by two guests. We have Lynn
Barr, founder and CEO of Caravan Health and
president of the Barr Campbell Family Foundation,
and John Budd, partner with ECG Management Consultants.
(00:21):
Lynn, John, thanks so much for joining me
today and being my guest. Yeah. Thanks for
having us.
Thank you.
Well, to get us started, I just shared
a bit about you, your names, and your
titles there, but I know there's more to
your professional stories. Can you share a bit
more about yourselves and your work in health
care? Lynn, can I turn you first here?
Oh, sure. Thank you. So I've been working
on rural health care since 2010
(00:44):
where I, was getting my master's in public
health and and, started working with the rural
stakeholders in the state of California.
And I found that that this is a
constituency
that is very underrepresented
in Washington and and elsewhere
and had tremendous needs, but also a tremendous
heart. And so kind of fell in love,
(01:05):
with rural America, and, I've been working with
them ever since. I under Caravan Health, I
I wanted to support their their journey to
value based care
and organize hundreds of rural hospitals and thousands
of clinics in 44 states in Guam,
saved Medicare half a billion dollars, and paid
half of it to the provider. So,
(01:26):
it's a wonderful group of people, and I
really love working with them.
Lynn, that's so well put. Underrepresented in in
many places, including DC, but, also, like you
said, tremendous heart. Couldn't agree more about the
rural
health care leaders and clinicians out there. John,
let let's turn to you and and learn
more about your background.
Yeah. Thank you. So by way of introduction,
(01:47):
my name is John Budd. I'm a a
partner with ECG Management.
I actually started my career in the back
of an ambulance. So working with some pretty
underserved populations in terms of social determinants of
health and and really thinking about understanding the
safety net that was there. From there, I
moved into trauma center administration and ultimately consulting,
where I've really grown a practice
(02:08):
of focused exclusively
on health system sustainability.
So working with health systems really constantly challenged
to do more with less,
to think about how do we thrive and
survive both strategically and then really in the
nuts and bolts operationally.
In in between there, I've been the CEO
of a medical group in a rural part
of Indiana.
So know pretty distinctly the challenges of how
(02:29):
do we care for a population in an
area that's highly reliant on,
recruiting physicians to to lesser known out of
outside of metropolis areas,
but also relies on things like the Visa
program or alternative funding streams to be successful
in that. So I'm incredibly excited to chat
with y'all today.
I love that perspective you're bringing to this,
John, and starting the career in the back
(02:49):
of an ambulance. I mean, that's a a
pretty special origin point for for this conversation.
We if we had been talking about rural
and community health systems
last year or the year before, it still
would have been a very, very important conversation.
I feel like at this time, the stakes
are even higher,
than they have been in a long time.
These organizations just continue to face financial workforce
(03:11):
access related pressures.
How can you can we just start with
some groundwork and draw the landscape for our
listeners, especially about some of the recent federal
initiatives that are influencing rural hospitals trajectory?
I'd be curious from your vantage points. Lynn,
I'll turn to you first here. What does
the future outlook
for these organizations
look like right now?
Boy, that's a really good question. It really
(03:32):
depends a lot on what the states do
in the next couple of months.
And there's a huge opportunity of $50,000,000,000
in the rural health transformation fund for them
to really
reengineer
how we deliver rural health and create a
sustainable model. But with very little time to
do it, little expertise, it's gonna be really
hard to pull
(03:53):
off. And what I I think everyone's afraid
of is that these cuts are gonna be
the end of rural rural health and that
we're gonna try to Band Aid things for
a little while, and then it's all gonna
fall apart. So we don't really know.
I know that that we really hope
that people are going to take this opportunity
to do true transformation
(04:13):
and create a sustainable path because the path
they're on right now is definitely not sustainable.
Mhmm. John, I'll turn to you here. I
mean, that that fear of this being a
Band Aid approach before things ultimately fall apart
like Lynn said. I mean, that's a it's
a pretty serious concern. What would you wanna
add about the outlook here? Yeah. I think
when you think about where rural health care
(04:34):
and I would say community health care in
general is going nationally, you gotta think about
it with kinda two different lenses. Right?
The first would be,
how do we stabilize immediately?
So the cuts are happening. You know, they're
they're real. They're there. And, honestly, these organizations
are already struggling today. So there's an element
of how do we how do we stabilize
so that we can prepare for transformation? Because
(04:56):
it's it's very hard to transform when you're
in a point where you can't staff or
you're worried about making payroll in the next
couple days. That's that's really challenging, and that
involves rolling your sleeves up and getting your
hands dirty.
I think if you work with rural health
systems, you know that's something they've been doing
for a very long time. So it's kinda
scary because if they could do it, they
probably would have already. Because I would tell
(05:17):
you,
when we talk about innovation in health systems,
oftentimes, you know, big names get that that
draw.
Rural hospitals are some of the most innovative
hospitals that you will ever encounter because they've
had to solve for problems that nobody else
has that's pushed them out of there. So
I think from a a stabilization
perspective,
I think we're asking rural health leaders to
(05:37):
to reach into their bag of tricks one
more time for the next couple months to
say, how do we how do we hold
on long enough to transform? And I think
that's a an existential and really also tactical
question, so we're flipping back and forth. I
think the second piece is exactly where Lynn
is going. I think if you look, there's
no nothing left in the tricks after this.
Right? We can't keep going back to the
well for the same opportunities, the same $3.40
(05:58):
b savings, workforce savings, those types of
things. So now is the time that once
we're there, we have to change the model
of care. And I think that means changing
from an acute care centric model of rural
care delivery to something different.
So I think
now is the time that has to happen
because I don't think these communities really have
the choice anymore in this. And I don't
(06:19):
think that they made the choice to to
lose health care either. So I think when
we look forward, it's it's gonna be critical.
John, I love that point you made about
how these organizations are incredibly innovative. They might
not have the the whiteboards and the centers
of innovation that we saw about ten years
ago really proliferate
among some of the bigger AMCs. But to
your point, the leadership
(06:40):
usually has to wear numerous hats. There's this
concept of frugal innovation that's always humming through
their organizations
and how they're thinking.
So I I really appreciate you making that
distinction. Lynn, was there something you wanted to
add there?
You know, I just think that what John
said is really important about about thinking about
the sustainability
of of where all of this is going.
(07:01):
We can't you know,
one of the comments I've heard from policymakers
is that in all this money, no one's
talking about sustainability.
And it and what what we need is
a different payment model. Alright? We're paying them
99%
of cost, and and and and there's no
commercial. So so we know we're starving them,
and we and we and and we continue
(07:22):
to starve them with sequestration,
which disproportionately has affected critical access hospitals and
rural health clinics.
So so
how do we change the payment model? And
what I'm afraid of is that people are
gonna come out and say, hey. We'll adopt
this technology, and we'll do all this work.
And you guys just do it in addition
to what you already do.
(07:44):
And, you know, we failed with that ten
years ago, you know, when we came out
and said, hey, everybody. Just do electronic health
records on top of everything else
and watched access just
disintegrate
because of the extra because there were no
extra clinicians.
There was no ex you know, there was
an incentive payment, but not an ongoing payment.
(08:05):
So in order for us to fix the
future of health care, of rural health care
in particular, and I would say say all
health care in America, we have to pay
for health. We can't keep paying only for
sickness,
and we have to have a new workforce
that's going to be able to do this
work. So we can't just put this on
these people that are already stretched as thin
(08:25):
as they possibly can be and then ask
them to do more with less money. So
so that's really, I think, what people need
to think about. What I'm not seeing a
lot of coming from The States
is how do we change the payment model,
and that's what we should really be thinking
about. Mhmm.
Lynn, are there any examples or strategies or
(08:47):
or models that you have seen that you
would highlight for listeners when when you're describing
this?
Yeah. So I you know,
so population based payment models are are more
amenable to paying for health than they are
for for paying for sickness.
However, you need a lot of scale. Right?
So you need a you need a big
(09:07):
n. And and in these in these, rural
communities, you don't have that scale. So there's
a kind of a push and pull here.
But, what what I've been thinking about is
is trying to think how would you apply
these funds to create a new payment model.
And I think it would be an all
population payment model. So I kinda worked from
(09:28):
a fee for service backwards perspective and did
a whole budget of what what would the
services have to look like to create health
in these communities.
And this means a whole new workforce of
people that kinda mod modeled on on both,
you know, community health workers and US army
medics. Right? You know, these these people that
have been have been,
(09:49):
you know, trained in, you know, high school
graduates that have been trained and given protocols
and flowcharts
and know how to triage people, but also
can interact individually
and help people get where they need to
go. And so I what I've been thinking
about is a all population payment model, a
$150
per person per year to get this thing
(10:10):
off the ground that that attacks health with
every member of the population,
works on diet, works on nutrition, works on
exercise,
works on processed foods and
and chemicals that maybe we don't really wanna
have in our body and we should be
asking questions about. And so this this sort
of of of approach
(10:31):
would then bring up the health of the
entire population,
particularly in an area where where the health
is worse than the rest of the country,
bring down the total cost of care, bring
down the cost of the state Medicaid budgets,
but also I priced it at a point
that would
create profit for the rural community
that could then sustain the health system going
(10:53):
forward.
So I've created this model called carpe diem,
which I, you know, I'm happy to I've
I've put on LinkedIn. I'll it's open source,
and it's something that based on my experience
in working on payment models
would be a sustainable model for rural America
that could really change the health care of
of of our communities.
(11:14):
Mhmm. Lynn, thanks for sharing that with us
and walking us through that carpe diem.
Is what you've you've titled this, and it
sounds like if listeners are interested, they can
find more information on it.
Great.
But, John, I I wanna turn to you
here because what Lynn just described, I mean,
that's no small feat. When we talk about
changing the cure model, what are some of
the biggest
(11:34):
sticking points of this effort? You know, when
you think about redesigning cure models,
what is is usually where things start to
hit a wall from what you've seen?
Well,
I wanna start by saying it's a huge
feat, but
Lynn is probably not doing herself a a
do of service in the sense that she's
actually done this before. And I think when
you look at the numbers of what Caravan
was able to do on a national scale
(11:56):
and the ability of impacting lives in those
communities with small ends, I think there's there's
certainly,
a proof case as to how you could
apply an alternate payment model and also an
alternative care model to support that.
I think,
you know, we think about the workforce. I
know I've been on podcast with Becker's even
talking about the workforce.
I I think we talk about the workforce
(12:17):
shortage
pretty extensively and how are we gonna solve
it through recruiting, retention, and those types of
things. I think while that's absolutely part of
the strategy of how do we grow our
own in these communities that we have people
who are you know, fully vetted and invested
because I think they're more likely to stay.
I think there's an underlying assumption there that
the work stays the same.
And to me, that's where the problem really
(12:39):
lies. And I think Lynn touched on it
with this idea of, you know, paying for
wellness and moving away from an acute care
based model.
When you look at it on a workforce
basis and you say, what is the need
for caregivers in these communities?
What you see is in the acute care
setting, it's more resource intensive.
So the more that we have patients that
have acute care demands,
(13:00):
the more specialties, the more subspecialists, the more
high training individuals that we have to bring
to those communities to sustain that. And with
volumes being low, you're never gonna get the
scale that Lynn was talking about. So I
think the challenge becomes,
how do you reduce the need for acute
care? And this is true in every single
market, but especially true in rural. So I
think when we look at this, the question
(13:21):
has to become, how do we change the
acute care model? And if we can move
that more towards a care management model that's
more community focused,
that's less focused on how do we deploy
the money associated with the rural transformation funds
to fixing hospitals to how do we deploy
that to building an effective community safety net
to manage this care, I think you're gonna
(13:42):
see a much larger change. And I think
that's gonna change the mix of the workforce
that you need in the future to better
mirror what's available in those communities today and
actually allow you, to Lynn's point, to reinvest
in the communities that are there.
Mhmm. Mhmm. Thank you, John. And I think,
Lynn, what you just described in carpe diem,
I mean, that is sustainability.
I John just mentioned the health the rural
(14:03):
health transformation program, which I wanna get to
next. This is slightly different from what you
described with the redesigned care model. But CMS,
on September 15, announced states can now apply
for funding from the rural health transformation program.
It looks like states have until November 5
to apply. CMS will announce the recipients by
December 31 at the start of 2026.
(14:24):
But, Lynn, let's talk about this because there's
50,000,000,000 available to rural providers
from 2026
to 2030,
and I imagine there is a long priority
list for a lot of these organizations.
How do you think that
states and providers should be thinking about this
fund? How do you think the collaboration between
(14:45):
the states and the providers should be really
structured to
get towards sustainability and the greatest long term
success? So it's not the band aid that
you had voiced before.
Yeah. It's a it's a great question.
So so if you look at the rural
health transformation
program
and the scoring of it,
(15:05):
about half the points, is so there's the
first 25,000,000,000. We're not you know, and that's
that's you got your application in. Right? There's
the next 25,000,000,000.
And about half those points are for these
transformation
activities.
And if you don't apply for any of
those transformation activities, which a lot of them,
you know,
and, like, their their example on page, I
(15:26):
think it was 98 or 99
of the highest scoring possible program you could
put in there was population health models very
similar to what I just described.
And so if you want maximum points on
this and you want maximum funding, you're gonna
have to move into some sort of
value based care population health model that a
(15:48):
lot of a lot of states are like,
I I can't do that. It's too hard,
but it's not as hard as it looks.
I mean, you have to have some basic
principles of how you put this together
in in terms of simplicity for the state,
in terms of the payments,
in simplicity for the providers, in terms of
what they have to do, and also a
(16:09):
a, a way of measuring what you're doing
that allows you to know that you're being
successful. And so, you know, having process measures
along the way and having a rigor in
your program are all gonna score very high.
And I think that when where a lot
of people are going to struggle, a lot
of states are gonna struggle, is they've got
(16:30):
a month,
basically, to come up with a model like
this. They weren't really thinking along these lines.
They weren't understanding
how much of the funding is gonna go
towards these population health models. And if only
a few states apply for some of these
categories, then only a few states will get
the money. Right? And it will only be
divided amongst them. So any category
(16:50):
the states don't apply for is money they
forfeit.
Right?
And if they don't try to get their
heads around how they can do something in
population health and sustainability,
then this is just a Band Aid for
their states. And five years from now, they're
gonna be in serious trouble.
So I really encourage the states to go
deep
and to look at at at these models
(17:12):
and to try and,
in the Carpe Diem model that I put
out there for for states to look at,
this is a framework for you to look
at and go, okay. There is a way
to do this simplistically.
Now Mhmm. I'm the queen of oversimplification.
So when I say simple, it ain't that
simple.
Right? But it's but it there is a
way to do this and to do this
(17:33):
effectively and to actually make a difference in
your communities. And I just
really pray that the the states have the
time and the wherewithal to try to think
through
what they can do to really make a
difference in the future.
Mhmm. Lynn, what I'm hearing you say is
that time is not abundant with this effort.
But to your point too, it sounds like
(17:53):
you're encouraging rural health system leaders
to not be unnecessarily
intimidated by this.
That's right. And I'm I'm sending a copy
of my model to every state. So then
with budgets and everything else, and they can,
you know, take it, blow it up, do
something with it. But I just wanted to
look at it as, like, a starting point
of how you can really make a difference
(18:15):
and how you can score
extremely well on your application. So that's the
other thing is is, you know, 40% of
the fund of the, scoring on this is
about sustainability
and measurement, and this is something that states
you know? I mean, CMMI has not been
able to do this very effectively. So asking
states to come up with this very quickly
is hard.
(18:36):
Look at the model. There's
very concrete ideas that they could follow and
just use it as their own platform to
come up with something
meaningful to get in their application so they
don't forfeit this money to other states. Mhmm.
I'm sure your blueprint will be going a
long way in those states that receive it,
Lynn. That's that's excellent that you're
sharing that and making that accessible.
(18:57):
John, I I wanna turn to you. Is
there anything else you wanna add following Lynn's
remarks on the rural health transformation program?
Yeah. I think so. When you look at
some of the numbers put out by any
NRHA
in this space specifically,
it's important to note that the transformation program
doesn't come back to filling the funding levels
that were there before.
So when you think about innovative models that
(19:18):
need to be there, they need to be
self sustaining beyond the period of the transformation
grants and what's available to them. So you're
gonna see a lot of systems and states,
I think, say, how do we use this
for shiny new capital or potentially how do
we repeat, you know, meaningful use acts and
some of those types of things that are
gonna drive adoption of technology.
I think that's probably a little bit shortsighted
(19:38):
and won't have the effects that need to
be there. So when you look at strategies
as a state to how to address this,
I I think the question is gonna become,
how are you gonna build a model that
when this money runs out in a couple
years,
is going to be constantly refilling that bucket
so that we're keeping being able to invest
in the care in these communities that are
there? So I think when you think about
models that like Lynn is proposing,
(19:59):
the idea that we can actually bend the
cost curve at the end of this and
that we can move away from that acute
care model over time, which I I think
has been elusive in some instances, but many
communities have actually been able to be successful
in it. I think that's the direction from
a sustainability lens you have to take.
I'm just just seconding what John said.
You know, we need to create profit streams
(20:21):
in rural America. We we we our payment
model for rural America has no profit in
it. If there's no profit, there can't be
innovation and sustainability.
And so as you're as the states are
thinking about these models,
create a profit stream
that also reduces the total cost to care
for Medicaid
and for Medicare, and everybody
(20:42):
wins. And that's the goal.
Mhmm. I wanna thank each of you because
I think as we wind down here, this
is a topic that it can be really
challenging. Obviously, there's no easy answers. That's why
rural health is in the position it's in
in the first place. But I think as
you both help me better appreciate from your
remarks, it takes a great amount of ambition
right now, but also a great amount of
common sense,
(21:03):
and and really thinking through so it's not
throwing your hands up and saying, oh, well,
we've gotten here. We have to completely transform,
and
where where do we begin? It sounds like,
Lynn, there are some really effective blueprints in
existence as you've helped us better understand with
Carpe Diem. John, to your point, this is
probably not the best time to start thinking
about shiny new objects with these funds. You
(21:24):
need to focus on sustainability
still. Is there anything that we didn't touch
on in our conversation? Any final thoughts you'd
like to leave our listeners with on this
big topic?
Molly, I just wanna double down on what
you just said.
Use existing payment models.
Use existing codes,
use existing Medicare shared savings program.
(21:46):
Don't try to invent a new new mechanisms,
you know, other than, like, big checks. Right?
Don't don't create new codes.
Don't just stay away from from that type
of innovation and try to use what we
have
to create sustainability.
It's there. We have all the elements.
We just need to organize it.
Yeah, man. I love what you just said.
(22:07):
I think as a health system leader and
and working in sustainability
for for a number of years, I think
the thing that can be disheartening sometimes
is you look at the policy landscape and
how things constantly change. And when you think
about how are we really gonna address what's
in front of us, it's kinda like taking
a crystal ball and you're at best guess
10% likelihood you're gonna get what you need.
(22:27):
And I think that's kind of a glass
half empty way of thinking about it. The
reality is just like rural health systems have
been doing for a long time,
innovation starts within the constraints that we have.
And if you stop kind of waiting for
the answer to change in a federal level
or a macro level, there are tons of
opportunities to use the systems that we have
to care for patients differently.
(22:48):
And what this money is is while by
no means enough to replace what was in
Medicaid,
it is an opportunity to use this in
the near term to say, how do we
how do we redeploy what we have in
a way that's better suited to the communities
we have? So it's it's just an exciting
time and a little bit scary, but I
think exciting opportunity for health systems to do
things differently.
Mhmm.
(23:08):
I appreciate the realism, John, and also the
the half glass full
outlook that you just ended
on. Lynn, John, this has just been a
a really interesting conversation. I wanna thank you
so much for your time and your insights
today. We also wanna thank our podcast sponsor,
ECG Management Consultants.
Listeners, you can tune in to more podcasts
from Becker Healthcare by visiting our podcast page
@beckershospitalreview.com.
(23:29):
Lynn, John, thanks again. Thank you, Molly. Great
job.
Thank you.
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