“Nobody, from a hospital financial operations perspective, cares about the volatility of patient volume,” said Jim Porter, managing director of ToneyKorf Partners. “That kind of volatility is worrying.”
The Health Resources and Services Administration (HRSA) has released an additional $450 million in American Rescue Plan Act funds for rural health care providers who have struggled with rising expenses, labor challenges labor and loss of revenue resulting from the ongoing pandemic.
U.S. bailout payments are made to providers and providers who served rural Medicaid, Children’s Health Insurance Program (CHIP), and Medicare beneficiaries from January 1, 2019 through September 30, 2020.
“All of the US bailout funding has been absolutely essential for health care infrastructure over the past couple of years because it’s taken a while for people to grasp the idea that [the pandemic] was going to cross the country and reach remote areas,” says Jim Porter, managing director of ToneyKorf Partners, a consultancy for healthcare organizations in underserved areas. “Hospitals, especially struggling hospitals, are running incredibly tight anyway with negative margins. Many of these places need additional support, which they will likely get through grant programs or other state or federal assistance. »
There are currently 1,796 rural community hospitals in the United States, according to the American Hospital Association (AHA), and these organizations have been fighting an uphill battle since before the pandemic began. More than 130 rural hospitals have closed in the past decade, according to a study by the Center for Health Care Quality and Payment Reform (CHQPR). The risk of closure comes from the loss of money incurred while providing services to patients. In the past, these losses have been offset by grants, local tax revenue and grants from other companies that hospitals have received, according to CHQPR data. Two hundred rural hospitals risk closing within two to three years.
If CFOs and other leaders of rural hospitals want to keep their doors open, Porter says the key to doing so is to assess their structure and do a deep dive to better understand who they serve and how to increase utilization at the within the community in which the hospital operates.
“If I’m a CFO, having access to good planning and forecasting tools that let you see where the business is going is key,” he says. “No one, from a hospital financial operations perspective, cares about volatility in patient volume. is important. It helps you learn about where your organization is performing and where there are potential opportunities.”
Amanda Schiavo is Finance Editor for HealthLeaders.