How technology upgrades sparked a financial resurgence at two rural hospitals

Hospital entance
Coteau des Prairies Health Care System in rural South Dakota has leaned heavily on telehealth to streamline costs and patient care.

On his second day as CEO of Coteau des Prairies (CDP) Health Care System in Sisseton, South Dakota, Michael Coyle had to borrow $500,000 to make payroll. That was just the start of the hospital’s financial struggles.

CDP is a 25-bed critical access hospital located about 160 miles north of Sioux Falls on the edge of the Lake Traverse Indian Reservation. When Coyle arrived in December 2014, the hospital faced an array of financial issues, most of which were tied to delinquent payments from Indian Health Services. Several years earlier, the hospital saw a massive increase of ER visits after the reservation demolished its hospital and replaced it with a medical clinic.

Throw in an influx of Medicaid patients and lapsed training for billing and coders, and the hospital quickly found itself operating in the red by the time Coyle arrived.

“When you add all that together, we were struggling in the very beginning,” he told FierceHealthcare.

Nearly 800 miles south, Seiling Municipal Hospital in Oklahoma faced similar fiscal distress. When Jennifer Coons came on as CEO 14 months ago, the 18-bed hospital was down to one full-time provider—a 30-year veteran at the facility. The hospital was losing $50,000-$75,000 each month, according to Coons, and it was still using paper charts.

RELATED: The devastating impact on a poor community when a rural hospital closes its doors

Before it was reclaimed by the city, Seiling Municipal’s previous two owners, Kansas City-based Rural Community Hospitals of America and Missouri-based Mercy, recommended the city shut down the hospital altogether, Coons said.

Now, both hospitals have undergone financial turnarounds thanks to an investment in new technology that has helped manage their patient population and provided access to previously untapped data sources that have revealed new opportunities for expansion.

“We’re not rich,” Coons said. “But we’ve made almost a million dollars more this fiscal year than we did the previous fiscal year.”

Telehealth streamlines services

When Coyle arrived at CDP, he made several major changes to the hospital’s operations, including an immediate overhaul of its billing and coding processes. It took 12 months to complete, but it pulled the facility out of a $1.5 million hole in 2014 to a $100,000 profit in 2015.

With a little more wiggle room, Coyle revitalized the hospitals tele-emergency and tele-pharmacy programs that had been severely underutilized.

The hospital implemented a new mandate that required staff to use two existing tele-emergency rooms to triage every patient. That approach freed up clinicians and provided patients with emergency specialists who often had more experience treating certain illnesses. It also allowed the hospital to expedite transports to other parts of the state when necessary.

Now, patients are triaged by nurse practitioners who are cheaper and easier to recruit compared to physicians. But the impact on patient care has been invaluable.

“In a rural area, we have immediate intervention by highly trained professionals that can support my current staff,” Coyle said. “That alone saves time, which saves muscle and tissue and disease sets and injury sets.”

RELATED: How telemedicine pulled one rural hospital back from the brink of bankruptcy

Coyle also resuscitated the hospital’s e-pharmacy to support the one pharmacist and pharmacy technician on staff, allowing telepharmacists to approve medications on weekends and overnight.

Initially, the costs were defrayed by a grant, but now the hospital pays approximately $100,000 each to support its telehealth programs. Considering a full-time specialist could cost as much as $400,000 a year, Coyle sees it as cost savings—so much so that he’s exploring additional telehealth programs to support the hospitalist program and improve care for stroke patients.

“If critical access hospitals aren’t using telehealth, they aren’t using their finances appropriately, in my opinion,” he said.

Data drives targeted business opportunities

Although Coons said it’s only a matter of time before her hospital invests in telehealth, she focused most of her energy on implementing a new EHR system and then using the data that it provided to target new lines of specialty care.

“One of our big goals when we got here was we really wanted to get some type of EHR,” she said.

Seiling opted for athenahealth, and the transition from paper records to EHRs has provided executives with far more data about hospital operations. Early on, Coons brought on three providers to operate off-site clinics along with specialists in wound care, dermatology and cardiology.

RELATED: Future of healthcare grounded in data, but details fuzzy

That investment paid off for members of a rural community who don’t want to drive more than 100 miles to Oklahoma City to get specialty care. Now Coons said the hospital is looking to develop a “finely-tuned swing bed program” that can capitalize on patients coming from post-acute care facilities that need specialized care.

“I really felt like it was important to think about and look at what is offered in this area and find that niche that no one else has addressed,” she said, noting that patient and community data sets helped drive those decisions.

Most rural hospitals still struggling

Seiling and CDP may be an exception to the rule. Although most rural providers have upgraded their health IT infrastructure to obtain federal incentive payments, many are still learning how to use it strategically, said Brock Slabach, senior vice president for member services of the National Rural Health Association.

“[Rural hospitals] put the technology in, but now they're adapting and getting used to it,” he said. “They’re learning its functions and how to translate that into meeting the needs of overall improvement.”

Slabach said part of that is because rural—and some urban—hospitals are too busy keeping pace with Meaningful Use requirements to take full advantage of IT systems as a way to increase business or improve patient satisfaction.

Some hospitals, like CDP, may be getting over that hump. After breaking even in 2016, Coyle says the hospital is 25% ahead of budget after the first quarter of 2017. If it wasn’t for those investments in technology, Coyle said the hospital couldn't have maintained its independent status—something the board and the community adamantly support.

“We definitely would not be independent,” he said. “But we wouldn’t be as robust as we are now either.”