Rural hospital experts urge local budgets or global payment pilots to avert closures

A panel of independent rural experts and rural hospital leaders warned the commission that fee‑for‑service payment models are causing closures or the threat of closures across much of Colorado. "Fee for service fundamentally incents more utilization," said Dr. Jay Wand, urging local autonomy and capped budgets that allow communities to set priorities.

Stephen Summers and Kelly Johnston — both experienced hospital association leaders — urged the commission to study alternative payment models, including Maryland‑style public‑utility approaches and targeted sustainability payments used by other states. Kevin Stansbury, CEO of Lincoln Health, and Donna Lynn of Denver Health described how a high Medicaid and Medicare payer mix and weak commercial negotiating power leave many rural providers operating at negative margins and reliant on state policy choices such as the hospital provider fee.

Panelists recommended a two‑track approach: (1) near‑term sustainability payments or short‑term bridge funding targeted to independent rural critical‑access hospitals; and (2) longer‑term demonstrations of capitated, locally governed budgets with transparent community outcomes, multi‑payer alignment, and federal engagement to secure necessary waivers or approvals.