Rural hospital find that expansion helps the bottom line

Dive Brief:

  • Despite being a small rural hospital, Childress Regional Medical Center regularly reports being in the black while on a $28 million budget, STAT reported.
  • By expanding instead of reducing staff and services, the hospital has been better able to meet community needs while remaining profitable.
  • Between 2010 and 2014, 26 rural hospitals completely closed their doors, and another 21 stopped providing inpatient care—a change that impacted approximately 1.5 million people, according to the Rural Health Research Gateway

Dive Insight:

Just about any hospital closure is of concern. But when rural hospitals close, it disproportionally affects people who are older, have lower incomes, depend more upon public insurer programs, and are sicker than urbanites. In addition, many rural hospitals are among the largest employers in their communities, so a loss of healthcare access goes hand-in-hand with economic losses.

Research in 2016 indicated that a third of rural hospitals were at risk due to Medicare cuts. These are facilities that average 25 beds and seven patients a day, and have a median profit market of only 2.7%, half the profit margin of urban hospitals. That gap is widening.

Texas has been hit with more closures than any other state, 13 since 2010, according to the North Carolina Rural Health Research Program. But Childress Regional Medical Center, boasting only 39 beds, has managed to thrive, Stat reported. Under the leadership of CEO John Henderson, the hospital has expanded a number of specialty services, including dialysis, orthopedics, and chemotherapy. Bringing specialty services into the community has no doubt done much to fight outmigration; before Childress offered chemotherapy, patients had to travel 120 miles for cancer treatment.

Putnam County Memorial Hospital had similar success by expanding services and hiring specialists, bringing their average daily patient volume to more than 12 from less than one and increasing revenues to $22 million, FierceHealthcare reported.

These solutions are challenging to implement, however. In a 2015 interview with Modern Healthcare, Marty Fattig, CEO of a rural hospital in Nebraska, named staff recruitment and declining populations as two of the most important problems facing rural hospitals.

Telemedicine would be a powerful tool to combat these challenges, but it remains to be seen whether adoption of new technologies can impact rural hospitals quickly enough to slow or halt their decline.

Filed Under: Hospital Administration Practice Management
Top image credit: Katie Bo Williams