October 21, 2015

Q&A: The Challenges Facing Rural Healthcare (Part 1)

In September 2015, we shared a short article featuring the challenges of rural healthcare systems, but this original article was actually an intro to a more in-depth discussion on the topic. This article is the first part in a three-part series, with the full answers provided by D. David Sniff, Senior Advisor & Consultant and Roger L. Holloway, Senior Healthcare Consultant.

There are numerous factors affecting rural hospitals internally and externally, and in this Q&A, we’ve identified some, though not all, of the factors impacting organizations, as well as ways in which organizations may or may not be influenced. It is impossible to speak of Rural and Critical Access Hospitals (CAH) in generalizations, but there are common issues impacting many of these organizations. Also, there are approximately 400 hospitals commonly referred to as “tweeners”, or, more specifically, those hospitals between 25 and 100 beds that do not receive Cost-Based Medicare/Medicaid reimbursement and are paid instead on the Medicare Prospective Payment method. Many of those face some of these and other unique challenges.

Many rural hospitals face serious financial challenges. Some are resolvable; others are not. In this three-part series, we interviewed Sniff and Holloway and asked some pretty pointed questions about Critical Access Hospitals (CAH) and what they perceive to be the issues, as well as the possible solutions.


Coors Healthcare Solutions (COORS): What are the leading factors that can’t be influenced by efforts of rural healthcare leaders?

 Sniff & Holloway (S&H): We can’t assume that any of these factors are unable to be influenced by some significant event or extraordinary effort of people in a community. Articles have been written describing certain success when obstacles are overcome, but the declining population and increasing Medicare/Medicaid population is probably the most significant issue, particularly for hospitals located in states that are participating in a federal Medicaid expansion project. If the community’s population base is stagnant or even shrinking, the hospital might not be large enough to sustain a full-service, acute care hospital. Changes in Medicare and Medicaid reimbursement are being enacted but will not negatively impact the beneficiaries, just the providers.

COORS: Are the other challenges common to many of the CAHs?

 S&H: Yes, lower per capita income than suburban or urban counterparts is a factor unless the rural community can develop new business that creates an economic stimulus, bringing jobs and families to the area. There also seems to be a declining number of local employers, which discourages young people from remaining in the communities. Many end up commuting to a larger community, and while there, they may also find it more convenient to seek healthcare as well.

Some are finding themselves in a fragile financial position for either new debt or sharing risk in new reimbursement models, including ACO’s ACEs. The “cash is king” concept applies to all hospitals.

Furthermore, due to a declining array of services, a percentage of care that the hospital once offered might now be referred to a larger area facility, such as obstetrics, pediatrics, surgery and long-term care. There also appears to be a changing definition of cost-based models from the federal government for cost-based organizations. Malpractice issues vary state by state.


Stay tuned for Part 2 of this three-part series. COORS Rural Healthcare Solutions has the resources and decades of experience needed to consult and provide practical solutions for those facing the challenges in rural healthcare. Through a no obligation, no fee phone consultation call or email, we invite you to discover if we can be of assistance to your organization.

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