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Rural Health in Oregon

Thirty-three of Oregon’s 62 hospitals are in small and rural communities. These hospitals provide essential health care services to more than one million Oregonians and are the cornerstones within the communities they serve. For most areas, they are the largest employer, offering family-wage jobs and economic stability in their towns, while providing essential health services. However, rural hospitals face many special operational challenges. In 2015, OAHHS partnered with EcoNorthwest to study the economic contributions of rural hospitals. Click here to view the report: "Economic Contributions of Oregon's Community Hospitals: Selected Rural Communities".
Oregon’s small and rural hospitals are experiencing unprecedented changes in health care delivery and reimbursement, as the Affordable Care Act and Coordinated Care Organizations overhaul the health care system. With Patient Centered Medical Homes and a shift to new payment systems, Oregon’s small and rural hospitals have had to rethink their health care delivery and reimbursement structures. Rural hospitals in Oregon are actively focused on the Triple Aim goals of better care, better health, and lower cost while maintaining the highest levels of quality care. To this end, all of Oregon’s rural hospitals are implementing programs to achieve these goals, including population health management education, expanding access through virtual clinics, transitioning to post-acute care models, and establishing patient and family advisory councils, among others. For information about the proactive transformation work of Oregon’s small and rural hospitals, click here.

Rural hospitals are divided into three categories – Type A, Type B, and Critical Access Hospital. These designations help determine how hospitals get reimbursed for the care they provide to Medicare and Medicaid patients. Here’s a rundown of how these programs work.

What are Type A & B designations?

The state of Oregon designates rural hospitals based on their size and location. Type A and Type B hospitals must have 50 or fewer inpatient beds, and Type A hospitals are located more than 30 miles from another acute care facility, while Type B hospitals are located less than 30 miles from another acute care facility.  As Type A and Type designation are specific to the state of Oregon, a rural hospital can be a Type A or B hospital and a Critical Access Hospital.

The state designation of Type A or B provides Medicaid reimbursement up to 100 percent of the cost of caring for a patient for some rural hospitals.  Hospitals located in sparsely populated and remote frontier counties, are guaranteed to retain cost-based reimbursement from Medicaid. In year’s past, Oregon’s Type A and B hospitals all received cost-based reimbursement from Medicaid, but changes ushered in under Oregon’s Coordinated Care Organization legislation led to 11 of our hospitals moving away from cost-based reimbursement under Medicaid. In 2017, twenty-one hospitals were determined by a state actuarial review to have high unmet need and challenging financial circumstances -- among other characteristics -- retain cost-based reimbursement for the next two years.

 These rural designations significantly improve the bottom line for many fragile community hospitals. Many rural hospitals lack the operating margins needed to replace or update facilities, purchase necessary health information technology, and make upgrades. Along with tackling financial challenges, small rural hospitals must sustain a highly trained workforce, including medical providers. Even with strong recruitment efforts, rural hospitals have difficulty attracting and retaining skilled workers. Rural hospitals provide a higher volume of Medicare and Medicaid services, and Oregon physician reimbursement rates rank near the bottom nationally.

What is the Critical Access Hospital Program?

Twenty-five of Oregon’s 33 rural hospitals are Critical Access Hospitals (CAHs), which is a federal program designed to improve rural health care access and reduce hospital closures. To be designated as a CAH, a hospital must meet certain requirements.  All CAHs have 25 or fewer inpatient beds, are located more than 35 miles from another hospital, maintain an average length of stay of 96 hours or less for acute care patients, and provide 24/7 emergency care services.

For their Medicare patients, CAHs receive cost-based reimbursement. As the name implies, cost-based reimbursement pays hospitals what it costs to care for a patient. Oregon’s rural hospitals have long depended on cost-based reimbursement from Medicaid and Medicare to remain viable. Prior to the CAH program and cost-based reimbursement, several rural hospitals around the country shut their doors as a result of inadequate reimbursement.

Oregon’s 33 Small and Rural Hospitals

  • Asante Ashland Community Hospital, Ashland (Type B)
  • Providence Seaside Hospital, Seaside, (Type B)*
  • Blue Mountain Hospital, John Day (Type A)
  • Saint Alphonsus Medical Center, Baker City (Type A)*
  • Columbia Memorial Hospital, Astoria (Type B)*
  • Saint Alphonsus Medical Center, Ontario (Type A)
  • Coquille Valley Hospital, Coquille (Type B)*
  • Samaritan Lebanon Community Hospital, Lebanon (Type B)*
  • Curry General Hospital, Gold Beach (Type A)*
  • Samaritan North Lincoln Hospital, Lincoln City (Type B)*
  • Good Shepherd Medical Center, Hermiston (Type A)*
  • Samaritan Pacific Communities Hospital, Newport (Type B)*
  • Grande Ronde Hospital, La Grande (Type A)*
  • Santiam Memorial Hospital, Stayton (Type B)
  • Harney District Hospital, Burns (Type A)*
  • Southern Coos Hospital and Health Center, Bandon (Type B)*
  • Lake District Hospital, Lakeview (Type A)*
  • St. Anthony Hospital, Pendleton (Type A)*
  • Legacy Silverton Medical Center, Silverton (Type B)
  • St. Charles Madras, Madras (Type B)*
  • Lower Umpqua Hospital, Reedsport (Type B)*
  • St. Charles Prineville (Type B)*
  • Mid-Columbia Medical Center, The Dalles (Type B)
  • St. Charles Medical Center, Redmond (Type B)
  • PeaceHealth Cottage Grove Community Health, Cottage Grove (Type B)*
  • Tillamook Regional Medical Center, Tillamook (Type A)*
  • PeaceHealth Peace Harbor Medical Center, Florence (Type B)*
  • Wallowa Memorial Hospital, Enterprise (Type A)*
  • Pioneer Memorial Hospital, Heppner (Type A)*
  • West Valley Hospital, Dallas (Type B)*
  • Providence Hood River Memorial Hospital, Hood River (Type B)*
  • Willamette Valley Medical Center, McMinnville (Type B)
  • Providence Newberg Medical Center, Newberg (Type B)