Rural Hospitals Need to Adopt New Strategies to Overcome Healthcare Challenges


Rural hospitals should develop and implement strategies that will help them successfully navigate a challenging healthcare environment this year, says Jim Kendrick, president and CEO of Community Hospital Corporation (CHC).

Kendrick says that some of the biggest healthcare trends will be perhaps the most difficult ones facing rural hospitals and health systems. They include clinical staff shortages and rising labor costs, higher interest rates and inflation, the need for federal funding to keep many rural hospitals financially solvent, and new healthcare delivery models, among other trends.  

On the topic of federal aid, many rural hospitals still require governmental financial assistance to maintain an optimal level of care. Since 2010, more than 140 rural hospitals have been shuttered, according to the North Carolina Rural Health Research Program.

Financially strapped hospitals, however, can request relief funding from newly launched programs including USDA’s Emergency Rural Health Care grants. Additionally, the Rural Emergency Hospital designation, the first of its kind introduced in decades, provides an option for rural hospitals most at risk of closing to change their service offering, Kendrick says.

He added that more funding may be made available in response to increased recognition of the important role that rural hospitals play in the nation’s healthcare delivery system.

For instance, proposed federal funding, such as The Rural Hospital Support Act and the Assistance for Rural Community Hospitals Act, can help keep hospitals running smoothly, if and when the funding receives congressional approval.

But rural hospitals should not rely solely on federal aid as a panacea for their financial ills. “Because federal funding may or may not materialize, hospital leaders need to adapt in order to keep pace with changes in the way healthcare is delivered and compensated,” Kendrick says.

Other challenges impacting rural healthcare include:

·        High Labor Costs: To develop a long-term solution for staffing needs, hospitals must focus on skill-mix optimization. This allows bedside staff to work at the top of their license to contain costs by reducing reliance on premium labor. One strategy is for hospitals to partner with nursing schools and vocational schools to capture healthcare workers early in their training. Some hospitals are collaborating with schools to develop fast-track education paths leading to full-time employment. A team staffing model approach is an innovation used at several CHC hospitals.

·        Rising Interest Rates and Cost of Debt Service: Hospitals saddled with debt may require restructuring. One example is shifting a bond structure over to HUD financing to obtain lower interest rates. “This strategy gives hospitals breathing room from high-interest rates and offers an opportunity to expand or add profitable services,” Kendrick says.

·        Adopting New Care Delivery Models: Ever-evolving changes to healthcare are shaping the way rural hospitals deliver care. One example is hospital-at-home care. This model transitions certain diagnostic studies, treatments and skilled nursing services to the home environment. Like telehealth and remote patient monitoring, hospital-at-home care provides another innovative way to better serve rural communities.

Because the path to sustainability is different for every hospital, hospitals must chart their own strategic roadmap. CHC’s operational assessment can begin to uncover opportunities for improvement and innovation. “This assessment shows hospitals where they stand and identifies routes to pursue and attain goals,” Kendrick says. 

Community Hospital Corporation owns, manages and consults with hospitals through CHC Hospitals, CHC Consulting and CHC ContinueCARE.