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Community Hospital Blog

Hospital Performance Improvement
Beating the Odds in Rural Healthcare

By Wilson Weber, Executive VP and COO, CHC


Rural hospitals operate as a healthcare safety net for smaller

communities, where demographics tell the story about these community-based hospitals. Patients tend to be older than those at urban or suburban hospitals, many patients are uninsured, and rural facilities have to maintain emergency rooms and beds for acute care even if they see fewer patients. In the last five years, Congress has sharply reduced spending on Medicare, and this decline in reimbursement rates has been particularly challenging for rural hospitals.


Along with the need for hospitals and healthcare services, our rural hospitals need more primary care physicians (PCPs) to care for patients. According to data from the Agency for Healthcare Research and Quality, there are 68 PCPs per 100,000 people in rural areas, compared with 84 per 100,000 in urban areas. Approximately 65 percent of primary care health professional shortage areas are in rural counties, according to Rural Healthy People 2020. This lopsided geographic distribution makes it doubly difficult for rural hospitals to maintain the health of their communities.


Like any business, a hospital’s financial well-being is tied to expenses and revenue. The tried-and-true formula is to increase revenue and reduce costs. That’s simple enough — yet bottom-line results for a rural hospital mean more than just the numbers. Employees, patients and the surrounding community depend on the hospital’s continued success.


In spite of the challenges, some community hospitals are seeing better financial performance. Let’s examine some actions they are taking to improve the bottom line.  

  1. Identify areas needing improvement. Begin by looking at the basics. For example, Yoakum Community Hospital in Yoakum, Texas began working to qualify the payer status of patients prior to admission. Self-pay patients may qualify for Medicaid or another reimbursement source. This step alone can make a significant difference in increasing revenue. 
  2. Strengthen physician relations. Great Plains Regional Medical Center includes physicians in leadership positions to enhance relationships between hospital executives and physicians. Currently physicians account for roughly one-third of the hospital's board, so they have a voice in the hospital’s strategic decisions. Hospital-physician collaboration can improve quality and cost efficiency. And because a significant part of the growth and success of a hospital is dependent upon the right mix of physicians and specialists, creating or revising your medical staff development plan should also be on your “to-do” list. 
  3. Benchmark performance against similar hospitals. Compare clinical data. This is a great way to identify opportunities for improvement and potential cost saving, and facilitate movement toward value-based care.
  4. Think about partnerships. If internal improvements aren’t sufficient, community hospitals may want to consider forming relationships with other organizations. Analyze the advantages and disadvantages of a potential partnership. What is the community hospital expected to provide? What amount of control they will cede for the expected benefits of the partnership? Make sure cultures are aligned and define expectations at the start.
  5. Ensure board involvement. Your board can be your biggest advocate and ally. When board members are better educated about their responsibilities, including overseeing finances, clinical quality and strategy, their support and ideas can be invaluable.

Financial stability is the solution to beating the odds in rural healthcare. Find out more about how CHC is helping hospitals.


Tags: Affordable Care Act, Hospital Performance Improvement, Operational Improvement, Partnership, Strategic Direction
Supply Savings Invigorate Community Hospitals

By Tony Ybarra, SVP CHC Supply Trust


Community-based hospitals are the lifeblood of smaller communities.

These facilities not only provide access to local health care, but they also stimulate the local economy, helping create jobs in the hospital and the community. However, many rural facilities face significant financial and operational challenges. They see a larger share of Medicare and Medicaid patients and operate on thin margins. For these hospitals, examining ways to reduce expenses is critical.


Supply spend is the second-largest cost for hospitals behind labor. Nearly 80 percent of providers who participated in a Modern Healthcare survey on supply chain issues said reducing medical and surgical supply costs is a formal part of their organization’s strategic plan. Holding the line on supply chain costs is a top priority.


Let’s look at three approaches to help control supply spend.

  1. Collaborate with key stakeholders to negotiate better pricing. The highest percentage of supply costs is often associated with a hospital’s operating room. Get everyone to the table with manufacturers — hospital executives, physicians and surgeons — to negotiate for more favorable prices on physician preference items such as orthopedic implants and cardiac rhythm medical devices.
  2. Evaluate your group purchasing organization (GPO) options to maximize cost reduction. Today almost all hospitals have one or a variety of group purchasing contracts in place, however, the benefits offered vary significantly. For example, size is a disadvantage for smaller hospitals, which often pay more for the same products or supplies because their volume is much smaller, and they cannot access best-tier pricing based on dollar spend. It’s key to understand the savings your hospital can qualify for and select the GPO with the most benefit for your specific needs.
  3. Analyze your materials management practices to get the most savings from your GPO. This process should include monthly or quarterly reviews to ensure your hospital is receiving previously negotiated prices from suppliers. It’s also helpful to cross reference hospital procurement data with your GPO contract list to identify opportunities for greater savings potential by converting to new products. Involving a multi-functional team of department leaders in this process helps ensure buy in.

To access better tier pricing, CHC has partnered with HealthTrust to introduce a new program designed specifically for community hospitals, CHC Supply Trust. This offering helps smaller hospitals to improve their bottom line with a reduction in supply costs, estimated at 10 percent savings annually. Participants also get support with the onboarding process and optional consulting and analysis services to maximize the benefit received.


We invite you to learn more about CHC Supply Trust.


Tags: Hospital Performance Improvement, Supply Chain, Supply Spending
When it Comes to Local Economies, Community Hospitals Prove to Be the Little Engines that Could


What makes a hospital a community hospital? Several criteria qualify a hospital as such, including the economic role it plays in the region it serves. As CHC’s Executive Vice President Cindy Matthews puts it, a community hospital “very much tends to be part of the economic engine of the community."


In fact, community hospitals tend to be the second or third largest employer in town, usually right behind the school district, she adds.


Lately, industry publications as well as the mainstream press have been acknowledging the vital role community hospitals play. Becker’s Hospital Review states that its importance “should not be understated — sometimes a community hospital will be the only thing keeping a town that used to thrive on railroad traffic and manufacturing going.”


Read more about the “economic boost” and other factors that make a hospital a community hospital in the Becker’s article “The modern definition of a community hospital.”


Read how community hospitals not only provide “an array of jobs from the bottom to the top of the economic ladder” but also “stimulate local spending and help attract new businesses that offer a stable of insured patients” in the New York Times article “Hospitals Provide a Pulse in Struggling Rural Towns.”


From healthcare access to employment, read how community hospitals contribute to their regions in the Southern Business Journal article “Hospitals helping bring money into the local economy.”


At CHC, we believe that community hospitals are indeed the economic engines of their region, and like any engine, they can sometimes use a tune-up. Learn more about how CHC’s services and solutions can help maximize your hospital’s performance.



Tags: Hospital Performance Improvement, Independence, Strategic Direction

CHC in the Spotlight