California's critical-access, rural hospitals got a big boost when UnitedHealth Group announced it would provide $10 million in loans to help them adopt electronic health records and improve their health IT systems, and $1 million in grants to jumpstart the process.
"UnitedHealth Group is committed to investing in California's health care infrastructure to help ensure that all Californians have access to care," said Steve Nelson, west region CEO, UnitedHealthcare. "California's Critical Access Hospitals play a vital role in sustaining the health and well-being of so many communities statewide. It is important that they have access to technology that will enable them to deliver quality care to their patients."
Compliance with acquisition agreements is driving payer funding of such programs, which is turning out to be a smart move for the cash-strapped state, said Alan Katz, health insurance analyst for the Los Angeles-based Alan Katz Group.
UnitedHealth Group's loans are coming out of the payer's $200 million California Health Care Investment Program, which state regulators required when United HealthGroup acquired PacifiCare. The program is designed to provide capital to healthcare organizations that serve under-served populations.
California's Dept. of Insurance and Dept. of Managed Health Care imposed a similar requirement as a condition to approving the merger between WellPoint and Anthem, Katz pointed out. In this situation, funds are being set aside to support community health clinics.
While the loans fulfill UnitedHealth Group's promise to the state, "it makes a lot of sense for United to use the money to help hospitals adopt new technologies," said Katz.
In theory, helping hospitals adopt health IT should contribute to the reduction of their operating costs, which could be passed on to payers such as UnitedHealth Group, he said.
"These conditions make a lot of sense for the state," Katz said. "They provide hundreds of millions of dollars for needed infrastructure improvements without any state spending." Without these funds, rural hospitals, clinics and other healthcare facilities with little resources could not carry out these improvements.
"At the same time, support of this nature can bring down overall healthcare spending," he said. "There are a lot of winners in this scenario."
In addition, UnitedHealth is providing $200,000 in grants to the California State Rural Health Association (CSRHA) aimed at assessing the IT needs of the 31 Critical Access Hospitals, for the purposes of deploying the $10 million where it is needed most.
"We are grateful for UnitedHealth Group's grants and investments in our Critical Access Hospitals. The funds will certainly make a lasting impact in our ability to bring access to quality health care in communities that need it the most," said Desiree Rose, CSRHA executive director.
