Tag Archives: rural healthcare

Lessons from a Rural Healthcare Revival

Todd Bengtson

By Todd Bengtson, Sr. Director, Key Accounts, Intalere

Rural healthcare providers today, especially those seeking to maintain some level of independence or autonomy, face very difficult circumstances. According to the National Rural Health Association (NRHA), nearly 50 rural hospitals have closed since 2010 and close to 300 others are in financial difficulty.

There are several factors contributing to this situation. For example, declining populations in rural areas make it difficult for hospitals to survive. In addition, healthcare reform is shrinking federal reimbursements for hospitals, adding to the financial woes of healthcare facilities overall.

So what can these facilities do to ensure survival? Let’s take a lesson from Samaritan Health Services in Oregon, which was able to turn a $5 million deficit into a $50 million surplus over the course of several years.

Taking Inventory…What have we got?

Larry Mullins, Samaritan CEO, encourages leaders to take a comprehensive analysis of the strengths and weaknesses of their institution and community, making sure to “dream big” initially and take nothing off the table. “The most important thing is that leaders need to learn to be visionary and innovate,” said Mullins. “We can get caught up in the minutia of saving every penny we can, when the true, sustainable answers lie in playing to your strengths and acting more globally.”

Samaritan found that their most valuable asset was a plot of undeveloped land that had been gifted to the organization over the years. They decided to explore development opportunities, both within healthcare and outside.

“As leaders, we need to be more adept at being entrepreneurial, ‘shopping the concept’ and reaching out to other local leaders to begin the process,” said Mullins.

Collaborating Locally

Samaritan leadership saw their role as a “convener,” involving as many community stakeholders as possible in discussions and meetings. They treated everyone like a true partner, bringing them in early, sharing ideas, plans and budgets. “Be well-prepared and well-thought out, and be able to answer every question asked,” says Mullins.

Seeing positive movement and interest in the site, but also understanding capital was limited, Samaritan also cultivated a number of joint-venture partnerships with associates who had complementary resources to offer.

Can we do it here?

Mullins explains that nearly every community has assets that can be leveraged to begin productive conversations and grow relationships. Forging strong community relationships is more important than ever. Leaders must be partners in healthy communities’ work and leading advocates with policy makers, media and business leaders. Among the basic building blocks of successful growth are:

  • Planning/zoning and land use assistance.
  • Funding (public, such as tax increment financing, bonds or grants, as well as private sector).
  • Commitment and committed staff and community.

Success for Samaritan was realized to the tune of $48 million in construction with 350-400 jobs created. Projects completed include:

  • Western University Medical School Campus.
  • Event and Conference Center.
  • An 85-room hotel and restaurant.

Creating a brand around your facility as an innovator and community builder, and being the facility’s and area’s foremost brand ambassador is just as important as approving budgets and making workforce decisions.

Learn the whole story or Samaritan’s success by reading our white paper, The Healthcare Crucible – Lessons from a Rural Healthcare Revival.

Member Best Practice Spotlight: Towner County Medical Center – Saving a Rural Hospital

TCMC photo

We continue our monthly series focused on how our members are tackling their daily challenges through innovative solutions with Towner County Medical Center, illustrating how they worked with Intalere and other partners to implement a financial turnaround.

Issue

Towner County Medical Center (TCMC) was on the path to becoming one of the casualties we hear about in rural healthcare today. The fiscal year ended in June 2013 with a -13.1 percent margin. The facility had a maxed out credit line and an extended accounts payable balance of more than $1.3 million. It was apparent that vendors were taking advantage of the facility, and the supply chain needed expertise to help improve financial outcomes.

Solution

An independent supply chain consultant was hired to help with training and expertise in the supply chain and TCMC partnered closely with their Intalere representatives to review cost savings opportunities. The consultant and Intalere representatives reviewed all aspects of operations. Methods used included:

  • An independent analysis from the consultant.
  • An Intalere Savings Roadmap.
  • Intalere assistance with software ensuring proper purchasing. 

Outcome

The turnaround at TCMC in just one year was substantial. A -13.1 percent margin from FY 2013 was turned into a positive 1.8 percent margin for FY 2014. Net revenue increased 11.1 percent and with the help of Intalere, TCMC was able to add all of the revenue and decrease expenses by 1 percent over the prior year. The credit line has been cut almost in half and TCMC’s accounts payable balance has decreased to below $500,000.

About Towner County Medical Center

Towner County Medical Center consists of a 20-bed critical access hospital, a 37-bed long-term care facility, a rural health clinic, a provider-based clinic, assisted and independent senior living facilities. 

Read more Intalere member success stories, including best practices now!