EP470: Continuing the ER and Primary Care Through Line Over to Rural Hospitals and Healthcare, With Nikki King, DHA

So, the show today, it’s sort of an encore but not really an encore because I recorded this whole new introduction that you are currently listening to. And I also did a few inserts that we popped into the show itself. Inserts from the future, you might say.

For a full transcript of this episode, click here.

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But why did I pull this episode from 2021, you might be wondering, as an immediate follow-on to the show from last week (EP469) about possible Medicaid cuts?

Well, for one thing, the show last week about Medicaid cuts was about how the cuts might impact plan sponsors. And it left me feeling a little bit like part of the story was going unsaid. So much of what happens in healthcare, we see numbers on a spreadsheet but can easily lose track of human beings.

I was reading something the other day. It reminded me of the people behind these numbers. I don’t know if this happened in rural America, but it easily could have. Here’s the link. Someone could not get a needed surgery. This surgery had all of the medical necessity boxes checked, except the hospital would not perform the needed surgery without cash up front in prepayment.

This patient, he did not have enough money to cover the prepayment. So, somebody in the hospital finance department gave him a solution: Just wait until the situation becomes life-threatening, and then I guess you can go to the ER with your newly life-threatening condition, and they will have to perform the surgery without the money up front.

And here we have the theme of people not being able to afford or not being able to access primary care or, in this case, I guess something more than that—a surgery—and they wind up in the emergency room.

As John Lee, MD, put it, the healthcare system in this country is like a balloon. And the way we are currently squeezing it, everybody is getting squeezed into the emergency room—which is the very most expensive place to obtain care, of course, especially when that care is non-emergent. In rural America, this is particularly true.

Now, by no means am I suggesting any kind of magic bullet to this Medicaid situation. As we all know, health and healthcare are not the same thing as health insurance; and we all know enough about the issues with Medicaid. That is not what the show is about.

The episode that follows with Nikki King, who is my guest today, offers some great advice when there’s just such a scarcity of clinicians available; and she does a great job of it.

So, I am going to spend my time with you in this intro talking about rural hospitals in rural areas—the place where many patients wind up when they cannot get primary care in their community, just exacerbating all of the issues we have with Medicaid and affording Medicaid. But yeah, even if there is adequate or even great primary care, you still kind of need a hospital.

The thing is, if an economic situation emerges where, say, for example—and this is the case in a lot of rural places—let’s just say a factory or two or a mine or whatever closes down. It might mean the local hospital also closes down if that local hospital was dependent on commercial lives and cost shifting to those commercial lives. Like, this is not higher math or anything. It’s easy to see how a doom loop immediately gets triggered.

Recall that one big reason—and Cynthia Fisher (EP457) talked about this in an episode from a few months ago—one reason why employers in rural areas are choosing to move facilities somewhere else or overseas is that hospital costs are too high in the USA in these rural areas.

So, they are closing their factory down because the hospital is charging too much. The lower the volume of commercial lives, the higher the hospital winds up raising their prices for the other employers in the area.

Now, there’s a point that comes up a lot in 2025 in conversations about rural hospital financials or just hospital financials in general, I guess. I had a conversation with Brad Brockbank about this a while back, and I’ve been mulling over it ever since.

There are many who strongly suggest the reason why rural and other hospitals are in trouble is squarely because they don’t have enough patients with commercial insurance in their payer mix.

As Nathan Kaufman wrote on LinkedIn the other day, he wrote, “The ‘tipping point’ is the percent of commercial gross revenues. When most hospitals hit 25%, if they don’t have commercial rates in the high 300% [over Medicare] range, things begin to unravel.”

And look, I’m not gonna argue any of the points here. How would I know? For any given hospital, it could be a financial imperative to try to get 300% over Medicare out of the local employers. I don’t doubt it.

The question I would ask, if someone knows that hospital finances are currently dependent on cost shifting, especially in a rural area with unstable industry, what are the choices that are made by hospital boards or leadership?

Is this current dependency used as a justification to level up the cost shifting to local employers just as volume diminishes keep charging more, which is ultimately going to cause even more employers to leave the area?

Which seems to be kind of a default. It’s like the safety valve is, charge the local employers more. The point I’m making here is not all that profound, actually. It’s just to point out that safety valve, taking advantage of it, comes with downstream impact that actually worsens a situation. So, what do we do now?

And similar to the Medicaid, what I just said about Medicaid, I’m not showing up with any silver bullet here. And running a hospital is ridiculously hard. So, I do not wanna minimize that. And I certainly do not wanna minimize Medicare advantage paying less than Medicare going on and the mental health crisis and the just crippling issues that a lot of rural hospitals face.

Here's a link to a really interesting report by the Center for Healthcare Quality & Payment Reform (CHQPR) about the ways hospitals can restructure and rethink how they deliver services, but I will take a moment to point out some case studies of success for what happens when people crossed off go get more money from the local employers off the list.

Then there’s also FQHCs (Federally Qualified Health Centers) doing some amazing things even in rural areas. Listen to the episode a while back with Doug Eby, MD, MPH, CPE (EP312) about the Nuka System of Care in Alaska, serving areas so rural, you need to take a prop plane to get to them.

Their patients, their members have some of the best outcomes in the entire country. Their secret: yeah … great primary care teams that include behavioral health, the doctor, the nurse, a whole crew.

And look at us. We’ve come full circle. Primary care (good primary care, I mean) is an investment. Everything else is a cost.

Lastly, let me just offer a very large update: Today, you cannot just say rural hospital anymore and automatically mean a hospital in dire financial straits struggling to, like, make the rent.

Large consolidated hospital systems have bought up so many rural hospitals for all kinds of reasons that may (or maybe not) have less to do with mission and more to do with all the things I discussed with Brennan Bilberry (EP395) in the episode entitled “Consolidated Hospital Systems and Cunning Anticompetitive Contracts.”

Here is the original episode with Nikki King. Nikki, let me just mention, has gotten a new job since she was on the pod. She is now the CEO of Alliance Health Centers in Indiana.

Also mentioned in this episode are Alliance Health Centers; John Lee, MD; Cynthia Fisher; Patient Rights Advocate; Brad Brockbank; Nathan Kaufman; Doug Eby, MD, MPH, CPE; Nuka System of Care; and Brennan Bilberry. 

You can learn more at Alliance Health Centers and by following Nikki on LinkedIn.

Nikki King, MHSA, DHA, is the chief executive officer for Alliance Health Centers, Inc. Her work serves both urban and rural populations and is focused on substance abuse, communities underserved in healthcare, affordable housing, and economic development. Before working in the healthcare industry, she worked for the Center of Business and Economic Research studying models of sustainability in rural communities. Growing up as a first-generation college student in Appalachia, she brings lived experience of rural communities and approaches her work in healthcare as pivotal in breaking the cycle of poverty. Nikki completed her DHA at the Medical University of South Carolina and her MHSA from Xavier University.

08:14 How dire is the rural hospital situation right now?

08:33 How could freestanding ERs be a potential solution for rural hospitals?

09:56 Advice from CHQPR: Rural hospitals should not be forced to eliminate inpatient care.

11:22 Why is broadband a roadblock to telehealth as a solution for rural health access?

14:52 What are other potential rural health access solutions?

15:37 The “hot potato” of nurse practitioners in the healthcare world.

16:34 “The number of residencies for physicians each year is not increasing, but the population … is increasing.”

20:28 EP312 with Douglas Eby, MD, MPH, CPE, of the Nuka System of Care.

22:00 What’s the issue with maternity care in rural America?

24:09 “As healthcare becomes more and more specialized, [the] ability to treat high-risk cases is better, but access gets worse.”

27:57 How is mental health care affected in rural communities?

28:29 “Rural communities are trying very hard to hang on to what they have.”

29:52 “When you look at the one market plan that’s available in a rural community, you probably can’t afford it.”

31:37 What’s the single biggest challenge to moving to a model that incentivizes keeping people healthy?

32:32 “The easiest low-hanging fruit … is having national Medicaid and have that put under the same hood as Medicare.”

Recent past interviews:

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James Gelfand (Part 2), James Gelfand (Part 1), Matt McQuide, Stacey Richter (EP467), Vivian Ho, Chris Crawford (EP465), Al Lewis, Betsy Seals, Wendell Potter (Encore! EP384), Dr Scott Conard, Stacey Richter (INBW42)