The operating margins of US rural and critical access hospitals have radically decreased, leaving these challenged institutions in a financially precarious position to tackle the high tech demands currently faced by healthcare sector providers.
WASHINGTON, February 19, 2024 (Newswire.com) - Approximately 46 million Americans rely on rural hospitals as a vital asset, but a growing number of these institutions are facing closure in 2025 due to deficiencies in essential technologies needed to manage finances and patient care effectively.
In Q1 2024, Black Book Research amassed the input of 1,657 executives including the attendees of the recently held American Hospital Association Rural Healthcare Leadership Conference, and the members of the Federation of American Hospitals, the National Rural Health Association, and the Alliance for Rural Hospital Access. The study found that 87% of administrators in hospitals with less than 50 beds reported that they were unable to afford new or replacement technology due to poor financial health and unavailable resources.
"The viability of small hospitals in 2024 hinges on a blend of shrewd financial oversight, strategic planning, active community involvement, and the effective utilization of existing resources," said Doug Brown, President of Black Book Research. "In successfully navigating the critical access and rural healthcare landscape, flexibility and adaptability play a vital role, emphasizing the increasing importance of outsourcing, leasing, and innovative financing." Key findings of the sweeping study include:
Financial Management
- 90% of small hospitals responding indicated that their facilities must diversify revenue streams including exploring more opportunities from productive IDN partnerships, collaborations, and expanding services where there is demand.
- 69% of CEOs are actively seeking grants and funding opportunities from government agencies, foundations, and community organizations to support specific initiatives or improvements in 2025
Operational Efficiency
- 98% of nursing and clinical executives surveyed claim they have already implemented lean and efficient operational practices to maximize resource utilization and reduce unnecessary costs with no room to reduce further.
Technology Integration
- 82% of IT managers in rural facilities will be turning to EHR and RCM vendors to transition any investment into more cost-effective technology solutions to streamline processes, improve efficiency, and enhance patient care at the least possible expenditure, to avoid system replacements.
Collaborations and Partnerships
- 69% of rural hospitals that have networked with larger regional Institutions to establish collaborations to share resources, obtain support, and potentially negotiate favorable contracts are still bearing losses in 2024. 84% of administrations expressed frustration from such fruitless strategic partnerships that are not strengthening services or improving their facility's financial sustainability.
Telehealth Services
- 93% of Rural Hospitals will continue to expand telehealth services to reach a broader patient base, particularly in remote or underserved areas. 90% of respondents who have implemented telehealth solutions since 2022 report significantly reduced costs associated with physical infrastructure and enhanced accessibility.
IT Staffing and Talent Management
- Despite investing in training and development of existing staff to ensure they can adapt to changing healthcare needs, 88% of CIOs indicate a shift to outsourcing options in the coming 12 months due to a lack of skilled talent available.
Outsourcing and Shared Services
- 79% of small hospital CFOs will opt for leasing or financing arrangements to acquire all new technology in the next 3-year window as their option to spread the costs over time and manage their budgets more effectively.
Shift to All Outpatient and Emergency Services Facilities
Nearly 80% of responding executives affirm that their board is seriously contemplating the federal government program aimed at revitalizing small hospitals. The federal government implemented a new payment model -- the Rural Emergency Hospital designation -- that provides additional resources intended to sustain emergency and outpatient services at hospitals that are no longer able to support or afford inpatient care expenses.
"The depletion of government pandemic payments, inflation, and escalating labor expenses have impacted the financial performance of facilities, and these challenges have been exacerbated for rural hospitals, which have historically faced greater financial struggles compared to their urban counterparts," said Brown.
2024 Black Book user survey results of Top Performing Vendors with Highest Cost-Effectiveness for Small Hospitals
2,026 crowdsourced, current small hospital IT and services users provided feedback on their intentions to renew current contracts, purchase additional products and services such as HIE, population health tools, and revenue cycle management, and the propensity for the client to recommend their inpatient EHR/HIT vendor to peer hospitals.
Twenty-three categories of services and software were rated #1 in combined small hospital client experience and small hospital cost-effectiveness:
Electronic Health Records, Rural Inpatient Care – Meditech Expanse
Electronic Health Records, Rural Affiliated Physician Clinics & Practices – CPSI Thrive EHR
Revenue Cycle Management Platforms/Rural End-to-End Software Systems – Waystar
Revenue Cycle Management Outsourcing, Rural End-to-End Services – Ensemble Health
Rural Facility Billing and Claims Management Outsourcing – Coronis Health
Virtual Nursing & Acute Care Telehealth Services – Equum Medical
Cybersecurity Services – Critical Insight
Coding & Clinical Documentation Solutions – AQuity
Accounts Receivable Management Services - RevSpring
IT Infrastructure Management Outsourcing – Pioneer Technology
Helpdesk Support Outsourcing - CereCore
Clinical Communications & Secure Messaging - Spok
Data Backup and Recovery Services – Veeam
Workforce Management - QGenda
Patient Engagement - Phreesia
Pharmacy Services – PharmD OnDemand
Shared Services – Ovation Healthcare
Human Resources (HR) and Payroll - Paycom
Operations and IT Consulting – Deloitte
Population Health – DignifiHealth
Data Analytics – Inovalon
Value-Based Care Solutions – Main Street Health
Hospitalists & ED Staffing – Rural Physicians Group
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About Black Book
Black Book Market Research LLC, its founder, management, and staff do not own or hold any financial interest in any of the software solutions vendors covered and encompassed in the surveys it conducts. Black Book reports the results of the collected satisfaction and client experience rankings in publication and to media and does not solicit survey participation fees, inclusion or briefing charges, or involve collaboration with Black Book before the announcement of the polling outcomes.
For Black Book vendor satisfaction rating methodology, auditing, resources, comprehensive research, and ranking data, see www.blackbookmarketresearch.com or contact Research@BlackBookMarketResearch.com.
Source: Black Book Research
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