How expansion helped solve a rural hospital's financial troubles

The picture looks increasingly bleak for rural hospitals, as patient volumes decline and care costs and bad debt remain high. But one small rural Missouri provider has found a way to survive without cutting back on services; in fact it has expanded them, according to National Public Radio.

In 2011, Putnam County Memorial Hospital in Unionville, which has a population of about 5,000, faced financial struggles trying to provide care to its high percentage of low-income, elderly and uninsured patients.

Initially, Putnam County Memorial considered cutting costs by reducing staff and services, but doing so would mean it couldn't keep pace with the rate at which patients sought care at better-equipped hospitals in bigger towns.

Faced with payroll costs of at least $70,000 and about $8,000 in the bank, the hospital took the advice of a medical consultant team and created new revenue streams by expanding services the patient population previously had to drive hours to get, according to the article. One of its first moves: converting a vacant 10-bed unit into a psychiatric unit. The hospital later hired the medical consultant team to run the organization. Cindy Cummings serves as CEO; her husband Jerry is its chief operating officer. In their first month of leadership, the Cummings recruited three new physicians, added anesthesiology, cardiology and gynecology services, and passed a $7 million dollar bond initiative to renovate the hospital and buy out its old debt.

In the wake of the expansion, revenues increased more than five-fold to $22 million, and the patient volume rose even more dramatically, from an average of less than one patient per day to at least 12, NPR reported.

Similar strategies could benefit other rural facilities, according to a 2014 report from the Rural Policy Research Institute. "We think that's the way forward for rural hospitals, rather than just sort of a bunker mentality--saying that we can't proceed," study coauthor Tim McBride of St. Louis' Washington University told NPR.

To learn more:
- read the article
- here's the report (.pdf)