Financial resilience

Can rural and community hospitals stay afloat given current regulatory and market pressures? A recent independent survey of hospital executives addressed this question. Findings show that financial resilience is a top concern for community hospital leaders. 

Jim Kendrick, President and CEO of Community Hospital Corporation (CHC), sheds light on this critical topic, drawing from recent findings of a comprehensive survey of community hospital executives that was sponsored by CHC. The survey delved into various facets of financial resilience, including the range of services offered, hospital performance and financial strength.

Can you provide an overview of the recent CHC survey on the financial resiliency of community hospitals and its significance?

Jim Kendrick: Because CHC serves rural and community hospitals across the country, we know about their challenges and help them work to maintain financial resiliency. The current market and regulatory pressures make it extremely challenging and even impossible for some of these facilities to remain solvent. The purpose of the 2024 Community Hospital Executive Opinion Survey was to gain perspectives from a broad base of community hospital executives and share the findings to raise awareness of this significant health industry issue facing our country. 

What were some key findings from the survey regarding the range of services offered by community hospitals, and how does this impact their financial resilience?

JK: The services offered by the executives surveyed align with those typically offered by smaller facilities. These community hospitals are operating on razor-thin margins, so they can’t afford to offer services that operate in the red. They have to make tough choices about which services their community can support. The survey found that the top three services offered included emergency, surgery and wound care services, while fewer facilities offered behavioral health, oncology and stroke centers. It is also important to highlight that only 51% of those surveyed offer obstetric services, which often loses money and is being cut at many small facilities.

Could you elaborate on the insights shared by executives regarding the financial strength of their hospitals, particularly in light of recent economic challenges and healthcare reforms?

JK: The majority of survey respondents reported annual revenues of $75 million or less. Just over 30% of our respondents reported excellent or good financial health, which left the majority reporting their financial health was average or poor. The top concerns that these executives reported included workforce shortages and cost, revenue cycle/reimbursement issues, and the growth of Medicare Advantage, which are all related to the current economic and regulatory environment.

What are some proactive measures identified by executives to mitigate financial risks and maintain stability?

JK: Survey respondents reported expense reduction, strategic planning and service expansion as the top improvement efforts underway at their facilities. In addition, they listed adding services, reducing contract staff, physician recruitment and reducing supply costs as additional strategies they are considering to improve performance. 

What overarching recommendations or insights can be drawn from the survey findings to support the ongoing financial resiliency of community hospitals in the face of future uncertainties?

JK: The survey findings underscore the pressing need to fortify the financial resilience of community hospitals. As healthcare landscapes continue to evolve and economic pressures persist, these institutions remain steadfast in their commitment to serving local communities. It’s important for these facilities to leverage partnerships, embrace innovation and proactively address challenges to navigate the complexities ahead. It will take the collective efforts of healthcare leaders, policymakers and public support to ensure the financial resilience of community hospitals and safeguard access to essential healthcare services.

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To learn more, visit: https://chc.com/2024-community-hospital-executive-survey/