Strategic Direction

When the Southwest Health System (SHS), in Cortez, Colorado, contacted Community Hospital Corporation (CHC) early in 2018, the hospital had violated various bond covenants associated with its $30 million expansion and renovation project. In fact, the organization had failed to meet the 80 days-cash-on-hand requirements for four consecutive quarters. This violation triggered technical default, which could have led to hospital bankruptcy
and closure.

Lenders concerned with the financial situation communicated with the board directly and required an outside consulting firm to evaluate the situation and develop a...

Rural hospitals are critical to the communities they serve, but in many areas their role is changing. Demographics tell the story. Patients tend to be older, and many are uninsured. Populations are declining. The decreases result in fewer inpatient admissions, but they have not reduced the need for emergency care or primary care physicians. The U.S. Census Bureau reports that 20% of the U.S. population is rural, but only 12% of primary care physicians are working in rural areas — and their numbers per capita are declining.

All of these...

Thin margins have long been a reality for most rural hospitals, but a worsening array of issues—from increasing charity care and bad debt to declining reimbursements and rural populations—have forced growing numbers of them into financial distress. Despite today’s challenging operating environment, many rural hospitals across the country are using a practical approach to get turned around before bankruptcy or closure become imminent threats.

Step 1: AWARENESS

Know the signs and symptoms of declining financial health

Certain financial indicators are clear signs that “business as usual” isn’t working and course...

It is time to think of IT differently—not as a business function but as a business partner with the same business objectives as your healthcare organization as a whole. That means strategic business goals should drive IT decisions. In healthcare organizations, the ultimate business goals are delivering superior patient care and improving outcomes. IT exists principally to support those and other goals.

Understanding IT in terms of a business partnership drives down costs. The main drivers of IT costs can be a “hard sell” by vendors to executives and physicians...

Metaphors commonly used to describe community hospitals underscore their importance to the regions they serve. They’ve been called economic engines, cornerstones of the community, and, by Forbes, the “financial glue” that holds communities together. Community hospitals tend to be one of the top employers in town, so when one closes, there are more consequences than traveling farther for hospital care.

Still, community hospitals are closing at a dispiriting rate—87 shut down in 26 states from January 2010 to July 2018, according to the North Carolina Rural Health Research Program. Countless...

Organizational culture is made up of shared values, beliefs, traditions, attitudes and behaviors. All together, these cultural elements shape a hospital’s workplace environment and affect employee satisfaction and organizational success. Culture is pervasive and, like air, subject to quality changes that aren’t immediately apparent. Culture can become stale or even toxic. That’s why periodic cultural assessments are critical to your hospital’s health.

Cultural Assessment

One way healthcare leaders can gauge cultural health is by conducting informal walk-throughs, looking for cultural clues like that savvy job applicant. It is fairly easy...