August 18, 2015

The Challenges Facing Rural Healthcare & How to Resolve Them

David Sniff, President and Roger L. Holloway, Senior Consultant


There are numerous factors affecting rural hospitals internally and externally, and though it’s impossible to speak of Rural and Critical Access Hospitals in generalizations, there are common issues that are impacting these organizations.

Many rural hospitals are facing serious financial challenges, some of which might be resolvable, while others might not.

Below are a few factors that could be resolved or positively influenced with internal or external resources, including those provided by COORS:

  1. High Turnover. Though there is are staffing models available, hospitals might not find it sustainable or desirable, and adding personnel due to turnover is costly and distracts leaders from day-to-day challenges. Two-thirds of a hospital’s budget are labor and benefits, which make these two areas the most likely targets for cost reduction. High turnover makes it difficult to retain and recruit qualified employees, and from payroll to an organization’s culture, instability in the workforce can be devastating. In rural hospitals, the workforce is often referred to as family, and quite literally, neighbors, husbands, wives, cousins, children, grandparents, in-laws, etc. are often part of the workforce, which can create a unique set of challenges.
  2. Competition. The inability to attract and retain appropriate healthcare professionals, who are also knowledgeable in the rapidly evolving world of healthcare, poses a continuous threat, and the competition for healthcare professionals remains acute.
  3. Public Perception. Public perception may not be positive in terms of scope of services or even quality of services. Employees and providers are our best sources of public relations and service delivery. A well-defined and articulated customer service program is a perennial assignment for all hospitals.
  4. Blame. A nagging variety of problems adds to the frustrations and discontent among all involved with the hospital, and blame for these problems causes the negative feelings to spread throughout the organization. In order for an environment to change, the problem needs to be addressed quickly and consistently, providing the opportunity for employees to offer input to upper management.
  5. Lack of Resources. Rural healthcare systems are often lacking the knowledge and tools necessary to participate in new risk models for population health, which can place a rural hospital on the outside looking in.
  6. Infrastructure Issues. Rural hospitals might find that they lack the infrastructure, broadband, transportation, housing, and social services needed to parallel the demographic needs of the community. There needs to be an up-to-date operational plan in place that expresses goals, objectives, and who is responsible for critical areas.


Now let’s talk about a few of the factors that are, unfortunately, unlikely to be influenced by internal or external resources:


  1. Population. Although the population in rural areas is declining, the number of individuals insured by Medicare and Medicaid is increasing, especially if the hospital is located in a state that is participating in a federal Medicaid expansion project. If the community’s population base is stagnant, or even shrinking, the hospital may 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 beneficiaries, just the providers.
  2. Lower Income Rates. The income rates in rural communities are lower per capita than those in their suburban or urban counterparts. Unless rural communities can develop new business and an economic stimulus, they will struggle bringing jobs and families to the area.
  3. Lack of Local Employers. The number of local employers is declining, discouraging young residents to stay in rural communities.
  4. Declining Reimbursement. Reimbursement is declining, changing the federal government’s definition of cost-based organizational models.
  5. No Hospital, No Doctors, and Vice Versa.If there is no hospital, there are no doctors, and if there are no doctors, there is no hospital. There needs to be a different model that provides outpatient diagnostics, urgent care, and essentially anything but a bed. Furthermore, there needs to be more federal encouragement for FQHC development in rural areas or transitional models for rural hospitals. Though these might be viable alternatives and solutions to closure, who in the rural community is bold enough to raise the prospect?
  6. Fragile Financial System. The financial position of rural healthcare systems is fragile, particularly for new debt and new reimbursement models, such as ACO’s ACE’s. “Cash is king” applies to all hospitals.
  7. Larger Area Facilities. Rural hospitals are being forced to decline an array of services, as a percentage of care the hospital once offered now goes to a larger area facility (obstetrics, pediatrics, surgery, and long-term care).




If you’re a member of a rural healthcare system and are hoping to see a positive change, call or email COORS today. We can assist you in creating an up-to-date operational plan, offer help in recruiting and retaining knowledgeable individuals, improve public perception of your organization, and offer resources, tools, and much more.

COORS Rural Healthcare Solutions has decades experienced consultants and resources that have faced the possible resolvable factors and other challenges meeting many head on with practical solutions. Give us a no obligation, no fee phone consult call or email us to learn if we can be of assistance to your organization with your particular challenges.




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