Decide to Thrive.
Saving Lives.
Saving Rural Hospitals.
Protecting Our Rural Way of Life.
Now is the time to thrive, not just survive. Failure is not an option. The cost of failure is great for all of us.
How many lives? How much hurt? How many jobs? How much of what we could be will never be if we fail?
Now is the time — Decide to Thrive. Phoenix Rural Health can make it happen.
Rural hospitals are disappearing.
Phoenix Rural Health is working to save them.
Rural hospitals struggle. For us, this is not news or a special interest story. It is our family and friends that are suffering and will suffer if we fail. Urban dwelling decision makers are not going to fix the problem of rural hospital failure. They will provide lip service to the catastrophe. They will tell us they feel our pain. Ultimately, it is up to us to be rural and do what rural people do: help each other.
We choose this way of life. We choose to be responsible for ourselves. There is good news. We can fix this. The resources are available to make this happen. It will not be easy or simple, but it is worth the fight. We are worth the fight.
What resources do we have?
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- Undervalued hospital real estate
- Critical access designation
- Isolated population that desires better, more convenient healthcare
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With financial and intellectual investment, and a new way of finding solutions to the challenges rural hospitals face, we can move from surviving to thriving.
Phoenix Rural Health is a rural-based organization. It is time for rural to lead rural: for rural to be the solution.
Why Rural Hospitals Lose Money
Bad Debt &
Uninsured Care
Because hospitals have very tight margins, the loss of 4-8% from bad debt and uninsured care is a major contributor to a rural hospital’s financial failure.
Inadequate
Investment
Hospitals must invest to thrive, but investment takes a back seat when the hospital is simply trying to survive. The creation of new businesses and the expansion of services is necessary for growth, but this requires external funding or healthy cash flow.
Lack of a
Viable Plan
Dedicated, hardworking people have allowed struggling hospitals to survive. Survival mentality conflicts with the nuanced strategic planning required to thrive as a Critical Access Facility. Strategic investment in growth takes a backseat to meeting next week’s payroll.
Traditional Approaches to Revenue Loss
The traditional solutions for failing rural hospitals are strict programs of ever-harsher cost-cutting and the forming of alliances with urban hospitals where rural hospitals trade their market control for the subsidies they need to survive.
Cutting Costs
Rural hospitals have rarely had abundance. Cost control is part of their DNA. Being rural has often meant getting by with less. Cost reduction doesn’t fix financials. Keeping costs low can improve financials at a critical access hospital (CAH), but much less so than in a non-CAH hospital business.
Reversal of Outmigration
It is difficult and expensive to meet the expectations of patients who are leaving the community for care. Buying an MRI or CT, or recruiting a specialist to provide care locally, are all expensive plans with long lead times before return-on-investment is achieved.
Tertiary Partner Alignment & Ownership
Tertiary hospitals take over rural hospitals to secure their referral base. The tertiary center may not need to profit from the local hospital operations, since referrals can more than cover the losses. The management strategy of a large tertiary center is very different than the strategy of a smaller hospital. Much of the time, the local financials do not improve; they are simply covered by the bigger hospital. The smaller hospital is dependent upon the largesse of the bigger hospital. Linking local hospital survival to the tertiary care center’s financial stability can be problematic when the bigger hospital struggles. Overall, the tertiary hospital does not have the needs of the rural community as their primary focus.
Making It Up on the Margin
For a variety of reason, this strategy does not work in a cost-based environment. Every service provided at the hospital must pay all of its fixed and variable costs. Making it up on the margin depends on a financial environment where profit is made when only marginal costs are met. This is not true in a cost-based CAH hospital.
Tighter Corporate Control
Experience has taught us that this approach leads to stifling of local management, increasing their focus on pleasing upper management. It cripples the local management, taking away their power and resources to put new ideas and plans in place. It does not allow them to be creative nor take the initiative to make changes in operations that lead to the hospital thriving, not just surviving. This approach often leads to broken people, not successful solutions.
Our Strategy
The power of these three interventions is extraordinary.
Leverage Undervalued
Real Estate
Lease the facility.
Manage to CAH Designation
Run the hospital as a hybrid fee-for-service and cost-based business.
Build External
Peripheral Business
Invest and grow high frequency, lower acuity, lower tech businesses where having a local presence is a strategic advantage and results in a high return on investment
Our Corporate Strategy of Management
- All Urgent Visits Need to Occur Locally
If the initial episode of care occurs outside your community, the care episode will be lost to an outside hospital system. - Peer to Peer Collaboration
It is a superior way of running rural hospitals when compared to top-down structure.
We want to empower local people to consult with peers first, then consult industry experts. - Keep Local Management and Make Them Better
It is difficult to find and keep qualified people. Keep the individuals who already know the facility and want to stay. Give them the tools to be successful. - High Frequency High Personal Contact vs. High Tech
Don’t compete on technology. Compete in high frequency, lower acuity services. - More Services to Existing Customers
Grow existing patient relationships with new and better offerings. Avoid competing to stop outmigration. - Revenue Cycle Management
RCM is necessary and important. It will rarely fix your financials. It will make small incremental changes. It is a powerful tool when used in combination with critical access designation.
About Phoenix Rural Health
Phoenix Rural Health arose from the devastating closure of the Jamestown Regional Medical Center in Jamestown, TN. The entire staff of 150 lost their jobs and Fentress County lost its only hospital. Now, patients must drive 45 minutes for hospital care.
Despite repeated attempts to reopen, the hospital remains closed.
We’re not allowed to save our hospital. Let us try to save yours.