RURAL HEALTH NETWORK DEVELOPMENT - PUBLIC-POLICY ISSUES AND STATE INITIATIVES

Rural health networks are a potential way for rural health care system s to improve access to care, reduce costs, and enhance quality of care . Networks provide a means for rural providers to contract with manage d care organizations, develop their own managed care entities, share r esources, and structure practice opportunities to support recruitment and retention of rural physicians and other health care professionals. The results of early network development initiatives indicate a need for state officials and others interested in encouraging network devel opment to agree on common rural health network definitions, to identif y clearly the goals of network development programs, and to document a nd analyze program outcomes. Future network development efforts need t o be much more comprehensive if they are to have a significant impact on rural health care. This article analyzes public policy issues relat ed to integrated rural health network development, discusses current e fforts to encourage network development in rural areas, and suggests a ctions that states may take if they desire to support rural health net work development. These actions include adopting a formal rural health network definition, providing networks with alternatives to certain r egulatory requirements, and providing incentives such as matching gran ts, loans, or technical assistance. Without public sector support for networks, managed care options may continue to be unavailable in many less densely populated rural areas of the country, and locally control led rural health networks are unlikely to develop as an alternative to the dominant pattern of managed care expansion by large urban entitie s. Implementation of Medicare reform legislation could provide signifi cant incentives for the development of rural health networks, dependin g on the reimbursement provisions, financial solvency standards, and a ntitrust exemptions for provider-sponsored networks in the final legis lation and federal regulations.