Since providers may be sole practitioners in their area, they lack incentives to accept discounted fees. They're facing low service volumes and fixed overhead expenses, so it's not easy for them to recoup their costs. In addition, rural health care faces unusual expenses. There is a pervasive myth that health care is somehow cheaper in rural areas. You have limited competition, so suppliers can set higher charges.
Transportation is limited, so shipping costs more.
Whether you're a hospital or physician, you face higher costs. In a few parts of the country, innovative programs are successfully expanding rural access to managed care, but they are exceptions to the general rule. Yellowstone Grows Commercial Membership Billings, Mont.-based Yellowstone Health Plan is making a success of commercial rural managed care, but has decided to abandon the Medicare market. The plan, which is co-owned by St Vincent's Hospital and Health Center and Blue Cross and Blue Shield of Montana, was started in 1994. It expects to expand into another three to five counties in 2001.