USDA 2007 Farm Bill Proposals - US Department of Agriculture

ADDRESS BACKLOG OF RURAL CRITICAL ACCESSHOSPITAL NEEDSRecommendation In BriefComplete the reconstruction and rehabilitation of all 1,283 certified Rural Critical AccessHospitals within the five years covered by the farm bill. This proposal would invest $85 millionto support $1.6 billion in guaranteed loans and $5 million for grants.ProblemIn the critical moments following a farm accident, heart attack, or other health emergency, timewasted attempting to reach an emergency room or other critical care facility can literally meanthe difference between life and death. Unfortunately, many rural residents live in remote oroutlying areas that lack reasonable access to critical health care services. These essential servicesare more than a hundred miles away for some rural residents.In 2005, a committee report of the National Academy of Sciences Institute of Medicine (IOM)found that rural first-responder emergency services confront major challenges including sizablegeographic distances between patients and trauma centers. Additionally, the IOM noted that ruralhospitals struggle, even more so than urban hospitals, to attract and maintain adequate numbersof certain health care professionals.Comments submitted during USDA’s Farm Bill Forums urge the department to expandassistance to these hospitals. Kathy of Washington State said, “Rural communities without astrong healthcare infrastructure cannot attract new industry or new residents… The success ofthe Critical Access Hospital program in addressing serious operational budget crises must bematched with programs recognizing the growing back log of unfunded maintenance andreplacement needs. A strong healthcare infrastructure is necessary as we care for our growingpopulation of retirees and keep rural communities attractive to growing families and businesses.”Recommended SolutionThe Administration proposes $1.6 billion in direct and guaranteed loans to complete thereconstruction and rehabilitation of all 1,283 currently certified Rural Critical Access Hospitalswithin the five years covered by the farm bill.Since fiscal year 2004, the USDA Community Facilities Programs have provided $260 million inloans and loan guarantees to support 53 rural critical access hospitals. Because the credit subsidycosts for Community Facilities direct and guaranteed loans are very low (6.4 percent for directand 3.7 percent for guaranteed), it would take a relatively small amount of investment to addressthis problem.The Administration’s proposal would require $85 million in mandatory spending to supplementfunding for the USDA Rural Development Community Facilities programs. With a mix of directand guaranteed community facilities loans, $80 million in budget authority will support $1.6billion in loans needed to meet the identified capital need of these hospitals over the life of theUSDA 2007 Farm Bill Proposals Page 117 of 183