How strategic affiliations help rural hospitals stay afloat

Amid an ongoing rural healthcare financial crisis, many providers seek strategic affiliations that allow them to maintain independence, according to Hospitals & Health Networks.

In the past few years, St. Charles Health System in Prineville, Oregon, has pursued several affiliation models with other hospitals, CEO Jeanine Gentry told H&HN. "The boards realized we were coming up to a perfect storm [and] financially, pressures were mounting," Gentry said. In need of capital to improve facilities and offset reimbursement losses, the board decided affiliation was the best option to keep the system's hospitals operating.

As part of St. Charles' affiliation efforts, one of its facilities, Pioneer Memorial, retained most of its autonomy and entered into a relationship akin to a "long-term lease," Gentry said. Meanwhile, St. Charles Medical Center Madras entered into a full merger with a larger system, transferring its assets. Both arrangements, Gentry said, have benefitted St. Charles thus far.

Which arrangement is most appropriate, she said, depends on what a hospital needs. Looser affiliations such as group purchasing options would not have met their needs, for example. Cultural reconciliation, she said, can be a challenge during the process, "but we have a long list of things we needed to combine and we have taken it step-by-step."

The improved access to recruiting options has been a major boost, Gentry said, as well as improved record-keeping and imaging technology, much like a recent arrangement between three rural hospitals in southwestern Arizona and Tucson Medical Center. Moreover, she said, in an era of increased emphasis on value-based care, the additional resources allow the facilities to focus on what's best for the patient population rather than simply maximizing the bottom line.  

To learn more:
- watch the video interview