Why affiliation may not be the answer for struggling rural hospitals

Many financially struggling rural and independent hospitals have looked to consolidation as a solution, but remaining independent may be a better option for some, argues a Hospitals & Health Networks blog post.

Some rural and community hospitals may choose to retain their independence to keep their healthcare mission locally focused, wrote healthcare consultant Beth A. Nelson of the executive search firm Witt/Keifer. When community providers join larger systems, their vision must refocus, Tim Putnam, president and CEO of Indiana critical access hospital (CAH) Margaret Mary Health, told Nelson.

That independence gives local hospitals much more room in adapting to local needs, said John Solheim, CEO of Crosby, Minnesota, CAH Cuyuna Regional Medical Center, a degree of flexibility that is more of a challenge at the system level.

Although finances are usually the deciding factor in whether an independent provider chooses affiliation, hospitals can deal with financial issues and retain their independence through more limited partnerships and collaborations. For example, Hancock Regional Hospital in Greenfield, Indiana, has remained independent but cut costs by maintaining relationships with larger Indianapolis systems for services such as cardiac and cancer care as well as some primary care services.

Independent hospitals also pursue smaller-scale versions of the same initiatives as larger systems, such as improving population health and clinical integration, Long said, working to establish their facilities as "destinations of choice" for their patients. "This means low-cost, high-quality, local access when, where and how the patient desires," he told H&HN.

Despite this, rural hospitals across the nation still face closure due to financial pressure, both in states that failed to expand the Medicaid program such as Tennessee and those that expanded it such as California. And community hospitals seeking to enter into risk-based contracts may face too much risk without backing from larger systems, FierceHealthcare previously reported.

To learn more:
- here's the blog post