Outsourcing management services can help rural hospitals maximize operations

Rural hospitals often turn to management services companies to ensure their health and longevity when they are in the midst of a financial turmoil. Even well-run providers benefit from outsourcing services for full management. Jim Kendrick, President and CEO of Community Hospital Corporation, explains why and how outsourcing these services can maximize hospital performance.

JK: Rural and community hospitals benefit from outside management services because they offer resources and expertise in identifying areas of improvement, revenue enhancement and cost reduction. Key areas include productivity, information technology, revenue cycle management, coding, chargemaster, supply chain, charge capture and pricing, and managed care contracting. Management companies can also assist in the recruitment of a new CEO.

They may also help hospitals with large projects such as new campus infrastructure, expansion, and service innovation, or offering expertise when hospitals seek loans from financial institutions. Hospitals also should consider outsourcing to help them comply with ever-evolving and complicated government reimbursement rules and other regulatory requirements, which can significantly impact a facility’s financial health.

JK: Outsourcing hospital management functions has gained greater acceptance among hospitals across the country. A Black Book Research survey revealed that an overwhelming majority (90 percent) of more than 500 hospital leaders thought outsourcing both non-clinical and clinical functions is the best path forward to achieve cost efficiencies and success in value-based care.

JK: For full management, it’s often a hospital board chair or member who makes the inquiry. When a hospital is seeking a certain level of support, it’s often the hospital CEO or another executive who reaches out with specific needs. Some areas that should be explored in the selection process of a management firm include:

• The firm’s reputation
• Level and breadth of experience
• Client success and outcomes achieved

JK: An operational assessment often paves the way to full management services. When engaging a management services partner, it is highly recommended that hospitals require firms to undertake the following activities during the first few months of the relationship:

• An in-depth evaluation of operational opportunities for improvement
• A blueprint for prioritizing and addressing these opportunities
• A thorough evaluation of the provider’s improvement processes to determine the missing elements that may need to be addressed

JK: The healthcare industry was virtually turned upside-down when the pandemic struck. In the preceding months and even post-pandemic, management services work diligently with their hospital clients to help implement changes and improvements, including:

• A prime example is help—through a management services company’s group purchasing organization—procuring and delivering urgently needed medical products to hospitals facing shortages due to intense demand for supplies.
• Prior to the pandemic, telehealth was sparingly, if ever, used at rural hospitals. But the surge of COVID-19 cases in rural and remote areas prompted greater use of the technology.
• The federal government’s waiver of patient admission requirements at Long Term Acute Care Hospitals (LTACHs) during the pandemic serves as another good example. This allowed consultants to assist hospitals with the provision of specialized clinical care of COVID patients, helping limit the disease impact on patients, hospitals and the communities they serve.

Faced with the demands of a rapidly shifting healthcare environment, it would be prudent for hospital leaders to engage firms to better manage their facility’s financial and operational performance. Outsourcing these functions allows hospitals to stay ahead of industry changes, providing them with the capabilities needed to find new opportunities and foster growth in the years ahead.

To learn more, please visit www.communityhospitalcorp.com