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Improving rural hospital financial and operational performance


As a member of the Flex Monitoring Team, Mark Holmes, PhD, surveyed and interviewed critical access hospital (CAH) administrators on strategies that improved their hospitals’ financial and operational performance. The University of North Carolina Rural Health Research and Policy Analysis Center director shared some of the successful initiatives with 650 NRHA members as part of the association’s 10thannual CAH Conference on Friday in Kansas City, Mo. [caption id="attachment_1212" align="alignleft" width="150" caption="Holmes visits with a member at NRHA's 10th annual Critical Access Hospital Conference."][/caption] The Flex Team produced a preliminary model for financial distress, which tries to predict the likelihood of bad financial events, such as hospital closure. Holmes called it an early warning system. They also produce an annual CAH financial indicator report. “CAHS with lower revenue appear to be facing more and more troubling conditions over the last decade,” he pointed out. While CAHs with rural health clinics reported more service expansion opportunities, those with long-term care facilities were forced to implement more cost reduction strategies. “It’s not a profitable venture, but they do it because it’s a service to the community,” Holmes explained. Of the more than 1,300 CAHs across the country, the 32 that consistently perform highly are generally located in areas with higher socioeconomic status and lower unemployment rates. “They have more favorable surrounding market conditions, and the Big 10 footprint is overrepresented,” Holmes says. “We know the South tends to have lower profitability margins, but every region has at least one high performing CAH. Some factors are within the board and administration to control, and some factors can’t be changed, like local socioeconomic conditions.” Holmes provided 10 strategies to which high-performing hospital CEOs attributed their success. Look for them in the next issue of NRHA’s Rural Roads magazine, available next month at www.RuralRoadsOnline.com.

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