How Critical Access Hospitals Can Achieve Sustainable Growth

Nearly 50% of rural hospitals today operate on negative margins. Since 2010, almost 200 hospitals have closed or eliminated inpatient services. Yet, the demand for care hasn't slowed. Outpatient revenue now accounts for nearly 75% of total hospital income, and electronic case reporting among Critical Access Hospitals (CAHs) has grown by more than 368%.

In this environment, thriving isn’t about doing more—it’s about doing the right things better. Your management team must commit to optimization, strategic clarity, and operational agility, in and industry that has been historically slow to adapt.

How to Create a Thriving Critical Access Hospital

Here’s how your hospital can thrive in a changing environment:

Strategic Alignment: Compliance and Vision Must Go Hand in Hand

To ensure your vision and compliance efforts are aligned:

• Thoroughly assess your CAH, including all processes, workflows, KPIs, and technologies.
• Align current practices with forward-thinking business goals.
• Foster a culture of transparency by improving communication across all levels of the organization.
• Ensure executive leadership is involved and invested at every step. This type of support will help increase accountability across the organization.

Ask Yourself:

• Have we aligned our organizational strategy with updated regulatory requirements?
• Do we conduct regular assessments of our workflows and performance indicators?
• Is executive leadership engaged and accountable in our compliance initiatives?
• Are communication efforts effective across clinical, operational, and financial teams?

Case in Point: Wallowa Memorial recognized that its legacy system couldn't scale with its strategic vision. Through a tech modernization initiative, aligned with long-term goals, the hospital gained capabilities without overextending resources.

Operational Optimization: Integrate Your Tech and Data for Peak Efficiency

Technology is rapidly changing the face of businesses across industries. AI innovation has been ranked as the number one goal for CEOs. However, many businesses aren’t ready for this type of change.

Here’s the reality: no technology initiative will survive without a clear strategy and solid data. That’s why optimizing existing resources, streamlining processes, and ensuring you have strong data visibility is important.

Integrated, intelligent use of your existing systems can drive measurable results without hurting our bottom line.

• Audit current tools and processes for overlap, redundancy, and fragmentation.
• Implement automation where manual bottlenecks exist, such as Robotic Process Automation (RPA) in revenue cycle workflows.
• Break down silos with centralized data visualization tools and performance dashboards.

Ask Yourself:

• Are we leveraging the full capabilities of our existing technology platforms?
• Do departments have access to shared dashboards?
• Have we identified processes that could be automated?
• Is there an active plan to upgrade or integrate systems in alignment with strategic goals?

Case in Point: Ortonville Area Health Systems once relied on gut instinct and fragmented reports for decision-making. With our help, they implemented integrated dashboards and data management tools. The result? Ortonville Area Health Systems elevated its decision-making and gained a comprehensive view of its operations.

Financial Foresight: Build Agility Into Your Budgeting and Forecasting

CAHs face unprecedented increases in costs. While labor and supply expenses have increased, many face pressures to reach target volumes to help cover increasing costs. Plus, reimbursements from private payors often don’t cover the higher cost of the services performed.

Financial stability is about understanding your full reimbursement ecosystem—from payer mix and cost reports to charge capture and volume forecasting.

• Conduct your own annual performance audits internally and have an outside firm do one at least every three years. Audits examining new programs, current organizational structure, costs, and revenues can assure the integrity of your existing processes.
• Leverage dynamic modeling to update forecasts monthly or quarterly, rather than relying solely on annual cost reports.
• Use real-time analytics to detect underperformance, leakage, and opportunities in your revenue streams.

Ask Yourself:

• How frequently do we update our financial forecasts based on real-time data?
• Are we regularly auditing cost reports and comparing them against actual performance?
• Have we identified our top revenue leakage risks—and implemented steps to fix them?
• Do our financial models account for payer mix variability and evolving reimbursement policies?

Case in Point: Madison Regional Health System used financial modeling, chargemaster reviews, and cost report analysis to align real-time decisions with long-term goals. Their data-driven approach helped them maintain independence while enhancing community and board trust.

A Trusted Partner Can Help

CAHs are in a constant state of upheaval. But with the right insight, strategy, and support, rural healthcare can lead the way.

The strongest CAHs will be those who:

• Align vision with action.
• Use data to make smarter decisions.
• Integrate compliance into daily operations.

Let Us Help You Build What’s Next

Strengthening your CAH’s bottom line is our specialty. Let us handle the business of your healthcare organization while you focus on delivering exceptional care to your patients.