Facilitating the future of small rural hospitals

Abstract

I'm not a rural person. I was born in Sydney; I now live in Melbourne. I've never lived in a small town, so I feel like somewhat of a fraud talking about the future of small rural hospitals. In the past, my attitude towards rural health care could be characterised as benign neglect, with an important exception I'll come to. For some of my career, I was responsible for budgets and budget savings in particular. My view then was that the big money is in the big hospitals, so I didn't look to rural closures or amalgamations to solve budget deficits. This is still my view.

Almost a decade ago, I was asked to lead a review of quality and safety in Victorian hospitals following tragic outcomes at Bacchus Marsh Hospital associated with poor clinical governance. As part of that review, I was forced to think more carefully about the trade-offs involved in rural health provision, between access, the workforce and clinical governance challenges, and the broader role of hospitals that I will talk about later.

Victoria has seen a flurry of amalgamation talk over the last year with on again—off again—on again oscillations favouring mergers either forced or voluntary. There are good reasons to argue for amalgamations—particularly those that are voluntary—as they can create improvements for both staff and communities in rural Victoria as our Grampians Health case study shows.¹

Money is not the only reason to look to amalgamations, care quality is another and my observation—based on anecdote only I'm afraid—is that there are significant weaknesses in clinical governance in some small hospitals that need to be addressed. Part-time, advisory medical administrative oversight, especially without clear and transparent lines of accountability, has been shown to be a recipe for disaster (Medical Board of Australia v Dr. Gruner (Review and Regulation) (2022) VCAT 1116; Medical Board of Australia v Dr. Gruner (Review and Regulation) (2023) VCAT 273). Medical practitioners in some cases are able to hold small communities and their hospitals to ransom.

But I think the obsession with structural solutions is not the place to start. The critical issue to address is workforce, and not enough is being done about this. Secondly, and what I want to focus most of this talk on, is thinking through what a small rural hospital is, as we move into the second quarter of this century. The failure to fully understand the role that small hospitals play contributes to muddled policy thinking and poor policy prescriptions.

But first workforce. Australia has a plethora of rural workforce incentives, policies and strategies. They are interacting, overlapping, expensive and ineffective. If you add them all up, you might even have one program for every rural doctor! Unfortunately, this mish mash seems to me to be developed by bureaucrats and politicians who look for solutions in the wrong place.

If we conceptualise the problem as too many well-paid specialists concentrated in the more affluent areas of east coast cities, the solution may take a different form. We might then have smaller intakes into metropolitan medical schools, offset by increased intakes into rural schools. The evidence is that students who grow up rurally, go to school rurally and go to university rurally tend to practice rurally. What a shock. So, I am proud that when I was a Canberra bureaucrat, I stimulated the James Cook University medical school, the one rural success I alluded to earlier.

One of the myriad failed policies to address the so-called rural workforce shortage was expanded intakes into metropolitan medical schools. Why one thought that would work is a puzzle. A Sydney university study has demonstrated that rural students who entered that University had their initial rural orientation drilled out of them over the course of their enrolment.²

The structures and funding of rural practice hinders development of successful workforce models. The doctors who work in the private general practice in the town are the same doctors who work in the small rural hospital in the same town, yet there are differences in who pays them and how. Legal barriers, and distrust between Commonwealth and state governments, conspire against integrated employment models. There are positive signs this might be ending,³ and we may yet get more sensible arrangements, hopefully not after the last rural doctor leaves, turning the lights out after themselves on the way out.

The arguments here about the medical profession apply in some degree to other health professionals as well, including nursing. Nursing and allied health professionals are hard to recruit into rural settings and again, more needs to be done to make these programs attractive to rural students, many of whom need an income while studying. More use needs to be made of ‘earn and learn’ models of education, building on already existing experiences,⁴ albeit perhaps with a bomb under them to be a bit more innovative.

The issue of new workforce models in rural towns, including the so-called single employer model, brings us back to the bigger issue of the role of rural hospitals. In my view, some of our tendency to go off on the wrong track in terms of policy is a failure to conceptualise what small rural hospitals are and what they do. When we think of small rural hospitals, we often think of them as a small version of a metro hospital, but I will argue they are not. The ‘continuum theory’, that the difference between small rurals and their metropolitan cousins is one of degree, is fallacious and leads one down a dangerous path, including to merger mania. Just as Peter Mac, a highly specialised Hospital, is totally different from its neighbour across the road the Royal Melbourne, and both are different from Frankston, and Shepparton, the small rural hospital is as different in kind from all these others as the large general from the specialist.

When we think about rural hospital planning—especially in states which are better at it than Victoria—we focus on role delineation for particular services, and we immediately think of hierarchies—Level 6 hospitals can do way more than Level 1 hospitals in a given specialty. The aspiration is often to try to move further up the hierarchy, consistent with the privileging of specialism over generalism in health care. The role of a hospital is mostly then cast in terms of these clinical specialties in the role delineation taxonomy. I love this approach and have done for quite some time,⁵ and helped develop the Queensland framework. But it relies on this continuum hypothesis—the small hospital is just a Lilliputian version of the big one—smaller in size and narrower in scope.

When I led the development of activity-based funding in Victoria, the first thing we had to do was work out what hospitals did—what were the distinct products of hospitals and then work out how to describe and pay for them. What we did back then has stood the test of time. We talked about acute inpatients, outpatients, emergency department, etc. Aged care was also identified as a totally different product.

But what I now realise is that my conceptualisation was incomplete, and this has big implications for small rural hospitals. Unlike their bigger cousins, small rural hospitals have what I would describe as a community development function or product. It is pretty obvious when you look around good rural hospitals. The results can manifest in a host of ways: a good local hospital CEO will ‘be out there in the community, building links and strengthening the community’,⁶ they will mobilise resources for the town—seeking funding for better aged care support to keep people in the community, perhaps providing community health and age care services in the home, and creating group supports. In some places, the role has evolved to create community gardens. In the town of Yea, it has involved development of an early intervention program reaching into kindergarten and primary school children.

You don't see that in city hospitals, nor in larger regional hospitals. The community hospital also becomes a resource and gathering places in climate emergencies such as floods and fires, which are set to become more common,⁷ with the hospital CEO taking on a broader community-wide leadership role in those increasingly frequent emergencies.

The small rural hospital—like community health services in Melbourne and regional cities—is the Spakfilla™ of our increasingly disconnected health care system, filling the gaps and making it work, especially for those at risk and excluded. This community development function of small rural hospitals addresses social and economic determinants of health, in a way quite different from the neglect of these factors in metropolitan hospitals. There is plenty of evidence that health in rural and regional Australia is worse than in metropolitan Australia, and the health of First Nations Australians contributes a lot to that difference,⁶ and small rural hospitals, with their preventive focus, can help a lot in redressing the health gap. My argument here is that there is an important social benefit that rural hospitals provide that goes beyond the narrow clinical benefit to the wider social and economic determinants of health.

And that brings us to governance and management. If a merger takes away local leadership and deemphasises this community development role, the merger will undermine social capital and potentially accelerate the withering of smaller rural communities.

But here is the risk. The governance role is not only about community development: communities expect their local hospital to be appropriately safe, which means that one needs competent boards, adequately supported and prepared to call out problems where they see them. This is hard because is easy for the board to be captured by the local clinical staff—who are often their neighbours who they see at the local shops—and to not have the complete information, the knowledge or the political courage to act on problems when they see them. This is an underestimated governance challenge for small hospitals, and I don't have a simple solution. However, it does require external eyes to be appointed to boards as we recommended in our report on quality and safety in Victoria. The external eyes should complement locally resident board members who bring different insights. Boards also need information about what is happening, and a good Director of Medical Services, and it is acknowledged that these people are few and far between. It also involves listening to the cries in the wilderness when these external eyes call out issues.

None of this is to dismiss the critical clinical roles that small rural hospital play. First and foremost, they are there when something goes wrong. They are, of course, not a major trauma centre but they can stabilise and initiate treatment, providing information to families and carers, and to emergency services. Ideally paramedic services should be stationed adjacent to hospitals, with joint working, as we did in some parts of rural Alberta. The role of paramedics is increasingly recognised as being a valuable one outside the ambulance setting and governments should work to overcome the industrial and other barriers which prevent this, creating more interesting roles and serving communities better. Similarly, small rural hospitals have an important role in palliative care, facilitating people dying at home or at least closer to their families and other carers. Small rural hospitals could also potentially have a much greater role in providing rehabilitation care.

Small rural hospitals, in conjunction with universities and vocational education providers, should be more proactive in addressing workforce challenges, promoting ‘grow your own’ approaches. This might involve supporting local residents enter the health professions, including through building aspirations, negotiating accessible on-site programs,⁸ and developing earn and learn models.^{9, 10} The training and development function ought to become a more prominent one in small rural hospitals, and this may require new categories payments to reflect the aspiration building role and the earn and learn approach. The aspiration building role extends particularly to providing opportunities for First Nations Australians, recognising that hospitals need to be culturally safe for this to occur.

If mergers are to occur, the smaller hospitals should not be subsumed into clinical programs of the larger entities, but rather local management should be protected, and the internal organisational structure should recognise their distinctly different role from the larger regional hospitals. This is the approach we adopted in Alberta when I was there.

We are on the brink of a technological revolution, which potentially increases the role of small rural hospitals and leads to their doing more than they do now. Yet we are ignoring that. Improved telehealth capabilities will enable people wherever they are to get advice on whether they should see a doctor now or in 6 h' time. Telehealth tools will enable clinical staff to ‘phone a friend’ seeking advice and help from more experienced or more specialised clinicians elsewhere. Artificial intelligence will revolutionise the diagnostic decision-making process. And it is much easier for AI to be available in a small rural town than it is for a highly trained specialist. Properly implemented, AI will also potentially increase what can be done locally.

But these new benefits will only be available if the right infrastructure is already there, overseen by the right governance. So, one has to think very carefully about the role and place of rural hospitals in 2024 and beyond. We need to think carefully about what they do now, and think broadly about that, what they do well and what they might do better in the future. And yes, this may still involve mergers, albeit like with like, and definitely voluntary.

Small rural hospitals are not just nano versions of the citadels in Melbourne, and they have a distinct and very different role, a role which extends beyond what we traditionally think of as health care, into the health of the community. It is this that must be built on as we work to improve rural health care and its governance.