A new survey of rural healthcare providers suggests a spot of optimism among care organizations that often skirt the line of financial sustainability.
Responding to a poll from advisory and accounting firm Wipfli, nearly all 75 responding rural care organizations—predominantly critical access hospitals—said they were either cautiously optimistic (72% of respondents) or completely optimistic (24%) about their organization’s current financial viability.
Further, 40% told the firm their financial stability was higher than a year prior, versus 22% who said lower, while 58% said they were more stable compared to the period just before COVID-19, as opposed to 25%. Seventy-eight percent said they were “not likely at all” to consider a merger or consolidation as compared to 12% that said a combination was likely.
The results weren’t surprising to Kelly Arduino, a partner in Wipfli’s healthcare consulting practice. She pointed out that rural respondents are now on the other side of a particularly tight period, when COVID-19 relief funds had run dry but providers were still facing “astronomical rates” for contract labor and other key expenses.
At the same time, she acknowledged that closures and service line cuts are still facing some communities—and that rural healthcare providers have a lower bar for financial sustainability than others.
“Their ‘doing well’ might not be the same level of ‘doing well’ as we would think of from a bigger organization,” she told Fierce Healthcare. “What’s doing well for them? That might be 60 days of cash on hand. Some organizations you’d think ‘Oh my God, it’s terrible,’ but they’re not at 12 [days]—so I think you need to kind of temper that.”
The survey also tended to grab more respondents from northern states, who are better reimbursed for Medicaid patients than some of their peers, she said.
What’s more, the poll was fielded between Oct. 1 and Nov. 8, 2024. Recent weeks’ political upheaval and the abrupt threat of a funding freeze may have changed some perspectives.
“Historically, rural healthcare has been a bipartisan area of support; people understand the importance of it and [believe] that support would continue and potentially even expand,” Arduino said. “To see that potentially disappear just overnight—I think it brought everyone’s guard up, and that will continue. I have heard from our clients that it was a wake-up call for them of the reality of how quickly things could change, and it means that they’re just going to have to continue to dig in on making sure that they’re managing their finances as well as they can.”
Even ahead of the recent political uncertainty, rural health organizations listed financial concerns and their government reimbursements as their top challenges in the survey. For context, 41% of respondents listed reimbursement as a significant concern as opposed to 22% a year prior.
“The constant threat is if we have erosion in government reimbursement,” Arduino explained. “Then all bets are off, so it’s constantly top of mind.”
Concurrently, concerns about managed care denials and prior authorizations were cited by 31%, up from 11% a year prior.
Arduino noted that rural providers are no longer accepting the annual increases built into their contracts but are now working to better detail for payers care and operating costs that exceed a cost of living adjustment. It’s a trickier, but worthwhile, focus for rural providers who often lack the more sophisticated tools to describe their expenses at a granular level, she said.
“It’s no stone unturned right now,” she said.
Workforce concerns remain a priority overall, though fewer organizations cited the issue as a significant challenge compared to a year before (32% versus 41%). Further, 40% told Wipfli their staffing situations have improved in the past year as opposed to 15% who indicated the opposite.
A growing number of respondents pointed to cybersecurity as a top concern, and about 4 in 5 said they have increased their investment in cybersecurity technologies within the past year, both trends Arduino said stem from the costly and potentially deadly experiences of their peers.
“If there was ever a year for cyber in rural healthcare, this is the year,” she said.
Wipfli’s report also highlighted rural providers’ increasing foray into artificial intelligence tools. This process is starting with safer applications, such as voice dictation for clinical notes or automation of back-office services that can free up employees’ time.
The rural organizations are still playing catch-up to other healthcare providers, but the technology’s upsides and lessened concerns about automation replacing vital community jobs are pushing adoption forward, Arduino said.
“There’s this realization that when Sally goes on vacation and she can’t complete the billing functions that need to be done, we still need to get [it] done,” she said. “So we’re seeing more interest in particular [in] automating and investing in the financial system, that interface with the electronic health record, and helping them follow and control inventory, and do automatic purchases … or create depreciation schedules for different pieces of equipment or buildings.”