5 Steps to Conserve and Sustain Rural Healthcare-Part 1

For the over 60 million people living in rural areas across America, the local hospital is more than just a place where lives are saved every day.

The rural hospital also serves as a cornerstone of the economy, creating jobs, attracting businesses, and easing the entry for new members whose contributions are yet to be realized.

Sadly, these same community centers are at risk of extinction. Declining inpatient volumes, shifts in payment models, and other market disruptions are forcing closures at the tune of 89 rural hospitals since 2010.

This two-part blog series will first cover the current healthcare landscape as seen through a rural healthcare lens and touch on what federal entities and organizations like National Rural Health Association (NRHA) are doing to support rural hospitals. In part two, you will learn that hospitals must take swift action to remain sustainable even with the backing of such powerful allies.

With the backdrop laid out clearly, part two of this series will outline five key strategies for rural hospitals' success. By exploring and implementing these modern-day healthcare tactics, rural hospitals may begin to experience greater operational efficiency and improved care delivery overall.

Rural Healthcare Landscape Snapshot

Today’s rural hospitals are still confronted with many of the same difficulties they faced decades ago. Without these critical care centers, many remote commu­nities are left in the dark without affordable access to basic healthcare services.

According to NRHA, nearly 673 rural hospitals— about one-third of those in oper­ation—are at risk of closing. To achieve a vision of healthcare that see’s rural hospitals as a vital part of the American landscape, everyone from hospital staff to government leaders to healthcare vendors need to work together.

Community hospitals facing the challenges of operating in a swift market to strengthen and sustain their businesses in the years ahead can try adopting five key strategies:

1. Prepare for value-based care
2. Reduce total cost of ownership for technology solutions
3. Make interoperability a priority
4. Prevent patient leakage
5. Engage consumers to improve health outcomes

Understanding the Challenges

Based on census data, close to 20 percent of the population inhabits the vast landscapes of rural America. Often these areas are plagued by outmoded infrastructures. Aside from access issues related to geographic disadvantages, other socioeconomic factors are at work exacerbating rural healthcare challenges such as:

• Average per capita incomes are $9,242 lower in rural areas than in urban areas
• The percentage of people living below the poverty line is higher in rural areas
• Nearly 25 percent of rural children live in poverty
• Chronic disease rates are higher in rural areas, along with alcohol and tobacco use

Historically, rural hospitals have provided a safety net for our most vulnerable citizens, but nearly half of those facilities operate on a thin or negative margin.

Today, that safety net is threat­ened as rural hospitals succumb to growing financial and demographic pressures. The NRHA says that rural hospital closures could result in the loss of up to 99,000 healthcare jobs and 137,000 community jobs. In addition, they note that closures would put up to 11.7 million rural patients at risk of losing direct access to care.

Ongoing government regulations and legislation, such as the Middle-Class Tax Relief and Job Creation and Affordable Care Acts, have put various financial pressures on rural hospitals. When Congress enacted the Middle-Class Tax Relief and Job Creation Act of 2012, it reduced some targeted Medicare reimbursements for critical access hospitals by 35 percent.

Along with the impact of high deductible plans, narrow networks, and other factors that require employees to pay a larger share of their medical costs, rural hospitals are also faced with a growing population of uninsured patients.

These disturbing trends highlight the challenges posed by high out-of-pocket costs for patients and the vulnerabilities they create for rural hospitals.

The problems facing rural healthcare facilities call for immediate action on all sides—from within the hospital and beyond the facility’s walls. Through innovations in healthcare technologies and partnerships with groups like the NRHA, MEDHOST is always working to improve the status of rural healthcare, push these key issues into the spotlight, and support those hospitals affected.

Go more in-depth on five key actions rural hospitals can take to build more sustainability into their businesses and continue serving their valued communities by reading Part 2.