Rural Hospital Viability

A Look at Alternative Models for Rural Hospitals

Rural hospitals are a valuable hub in their communities and provide much-needed care and support to the vulnerable populations they serve. Due to geographical and socioeconomic challenges that many rural communities face, we often see a higher rate of disparities, such as lack of a viable workforce, physician and other healthcare professional shortages, and a predominantly older, sicker population. Rural residents also tend to be poorer, and as a result, are often underinsured with high rates of chronic illnesses.

These issues, teamed with rural hospitals struggle to remain financially viable, perpetuate the struggle of providing quality care and further increase the gap in access to care.

Tennessee has experienced 16 hospital closures, with 13 of those being rural, since 2010 — the second highest rate in the United States. Of the 95 counties that make up the state, 82 percent are rural.

Due to the complex nature of rural communities and the ever evolving nature of healthcare it is important for rural hospitals to explore alternative strategies to help them continue providing care to their communities.

Tennessee Hospital Association, in conjunction with the American Hospital Association Taskforce Report, has focused on strategies to support rural hospitals in developing solutions to ensure they are financially viable and capable of  providing care.


Global Budgeting

Global budget payments provide security for financially-strapped facilities by shifting reimbursement for health care services away from volume-based to value-based payments.

The global payment system also gives providers the flexibility to create customized plans that fit the unique needs of their patients, decrease the utilization of non-essential hospital services and increase the utilization of necessary hospital services.






Emergency Medical Centers

Emergency Medical Centers (EMCs) allow existing facilities to continue providing care on an outpatient basis. EMCs’ presence relieves rural hospitals’ burden of maintaining inpatient beds. This, in turn, allows greater financial viability for the hospital.






Addressing the Social Determinants of Health

Social determinants are  age and environmental conditions in which people are born, live, learn and work that affect quality-of-life outcomes and risks. They often prevent individuals from accessing health care.

Determinants include:

  • socioeconomic status
  • housing
  • literacy
  • access to parks and playgrounds
  • transportation and
  • healthcare provider availability

Addressing these challenges through enhanced clinical-community linkages helps rural residents access healthcare. To provide the best possible care, providers identify social determinants to help craft specific solutions for their communities.

Patient screenings to identify unmet social needs, providing transportation assistance to medical appointments, and developing partnerships between health-based and community-based organizations are all ways that can help ensure quality care.






Inpatient/Outpatient Transformation Strategy

Many hospitals, especially in rural areas, have opted out of providing traditional inpatient services, such as in-house physical therapy services. And as a result, inpatient volume has steadily declined.

The transformation strategy allows hospitals to reduce inpatient capacity to a level that closely reflects the needs of the community and in turn, enhances the outpatient and primary care services they offer.






Urgent Care Centers

Urgent care centers function as medical clinics that are specially equipped to diagnose and treat non-life threatening illnesses and injuries. These centers often have on-site radiology and laboratory services, and operate in a separate location from a freestanding EMC or hospital-based emergency department.

This model allows existing facilities to maintain an access point for urgent medical conditions that can be treated on an outpatient basis.






Virtual Care Strategies

Virtual care and telehealth give hospitals the ability to maintain providing care, often with immediate 24/7 access to healthcare professionals.

Participating hospitals can perform high-tech monitoring as well, and ultimately, deliver less expensive and more convenient care options.






Rural Hospital/Health Clinic Strategy

To ensure and expand access, many rural hospitals are building strong partnerships with health clinics, including Federally Qualified Health Centers (FQHCs). These partnerships create integration of care (primary, behavioral and oral health) and allow for economic gain for the hospital and the center.






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