Press Releases

Community Hospital Consulting Drives Telecom Savings for Rural and Community Hospitals

Plano, TX (August 21, 2018) – Not a day goes by that community hospitals don’t look for ways to reduce costs or identify savings. Yet there’s good news from the Federal Communications Commission (FCC) which recently increased its annual funding cap—from $400 million to $581 million*—for a program that helps support telecommunications services for rural and community hospitals.

“Doing more with less while seeking savings opportunities or support funding is the norm for community hospitals,” said Jim Kendrick, president and CEO of Community Hospital Corporation (CHC) of Plano, Texas. “It’s not uncommon for not-for-profit providers to have three percent or less from a margin perspective. When you’re dealing with such a small margin, you have to manage all sides of the financial equation to the absolute best level possible.”

Rural hospitals may not even be aware of their own expenses in the area of telecommunications services, or that savings opportunities, including federal funding, are available.

“Rural hospitals tend to pay more for telecommunications services—which can be grossly overpriced compared with rates that urban providers are charged,” said Whittney Walker, CHC’s director of Telecom Funding Programs. “We can make a real difference at these rural facilities. At one hospital we reduced telecommunications service costs from $240,000 to $90,000. At another hospital, antiquated fire alarm services were replaced with DSL and phone line service was transferred from one biller to another with a combined decrease of $8,800 per month.”

Federal funding for telecommunications services is available through the Universal Service Administrative Company (USAC), an independent not-for-profit designated by the FCC, and in existence since 1997. Until recently, funding through USAC capped at $400 million through the Rural Health Care (RHC) Telecommunications Program. RHC helps qualifying rural healthcare providers—or urban-area hospitals that draw from rural areas or have rural clinics—obtain telecom services at rates comparable to urban providers. In addition, the RHC’s Healthcare Connect Fund (HCF) allows healthcare systems to request support as a single entity including non-rural facilities that are part of a largely rural consortium.

When USAC could not meet funding requests this recent funding year, hospitals faced reduced funding across the board [16 percent for individual facilities to 25 percent for consortiums]. In response, the FCC established an open comment period to ascertain the funding cap issue and need. During the open comment period, CHC joined many other organizations and filed documents supporting improvements to rural funding programs.

Good news resulted:

This summer, the FCC issued an order that adopts rules to: (1) increase the annual RHC Program funding cap to $571 million and apply it to FY2017; (2) annually adjust the RHC Program funding cap for inflation, beginning with FY2018; and (3) establish a process to carry-forward unused funds from past funding years for use in future funding years. *As noted in the FCC’s RHC 2018 Funding Cap Order, the RHC Program funding cap for FY2018 will be $581 million, adjusted for inflation. https://www.usac.org/rhc/tools/funding-commitments/funding-cap-order.aspx. 

“During the recent USAC funding year [July 1, 2017 – June 30, 2018], CHC facilitated $1.6 million in funding. That’s about 80 percent of the gross telecommunications costs of the hospitals we work with,” Walker said, adding, “By leading the funding management and monitoring processes—from eligibility to the application, RFP, bidding and negotiation—we’re able to help hospitals realize savings year after year.”

A higher funding cap offers more help to hospitals that may be struggling on many fronts. Obtaining telecommunications services funding is just one of the ways CHC Consulting, the management and consulting arm of CHC, provides mission-based services to rural and community hospitals in need.

About Community Hospital Corporation – HELP WHERE HOSPITALS NEED IT®
Community Hospital Corporation owns, manages and consults with hospitals through three distinct organizations – CHC Hospitals, CHC Consulting and CHC ContinueCARE, which share a common purpose to guide, support and enhance the mission of community hospitals and healthcare providers. Based in Plano, Texas, CHC provides the resources and experience community hospitals need to improve quality outcomes, patient satisfaction and financial performance. For more information, visit www.communityhospitalcorp.com.

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