Modern Healthcare spoke with four CEOs from the hospital, technology, hospital-at-home and insurance sectors about the hurdles they faced in 2023 and their predictions for the upcoming year. The interviews will be published over the coming weeks.
In October, 23 rural hospitals in North Dakota announced the formation of the Rough Rider High-Value Network. Such clinically integrated alliances are designed to reduce hospitals’ costs through shared services and provide the infrastructure for hospitals to invest in alternative payment models.
Rough Rider CEO Nathan White discussed his outlook for the rural hospital sector, his goals for the Rough Rider network and the advantages of clinically integrated networks compared to mergers or acquisitions. The interview has been edited for length and clarity.
Related: Rural hospitals form clinically integrated network in North Dakota
What challenges has the rural hospital sector faced this year?
The biggest challenges are rising costs, declining reimbursement and staffing. Rural hospitals serve an older population with increased medical needs who have less access to care, especially specialty care. Part of the reason behind the Rough Rider network was to cobble together economies of scale so that you can address those healthcare needs that are exacerbated in the rural setting.
What are your goals for the Rough Rider network?
We’re trying to purchase goods and services at a discount based on our size. Also, we’re investing in and sharing the expertise of chief information officers and specialty physicians. From the clinically integrated network aspect, we’re trying to find strategic payer partners. We are investing considerable resources, as a network, to specifically address quality, utilization and total cost of care. The only way we can get a return on investment is if we have a payer partner willing to share those savings with us.
How are you measuring the success of the Rough Rider network?
There are three things we measure: quality, utilization and the total cost of care. We are in discussions with payers to incentivize reducing healthcare costs. We are putting protocols in place, where if we can reduce the overall cost of care, we share those savings with our payer partners.
What’s your advice for other rural hospitals potentially considering clinically integrated networks?
Leadership and expertise are priceless. I'm not talking about me, I'm talking about a few key member CEOs that got their colleagues interested. We have a board that stepped up. We have key position leaders on the clinical side who have advanced the mission of the organization. Also, the membership made it clear this is a business. It's not an advocacy group, it is not a policy group, think tank or grant-chasing organization. Our membership wants a return on investment—not always in dollars and cents, but also in improving quality and advancing access.
Do you expect more rural hospitals to join clinically integrated networks next year?
This model is deployable in any state. We've had varying degrees of conversations with other states that are interested in a model like this. What are rural hospitals’ other options right now in terms of being able to generate scale, and being able to sit at the table across from a payer with enough covered lives under your portfolio that they're going to take you seriously? We can actually begin to seriously talk about value-based care because we have enough of a critical mass.
You can either sell your covered lives through a health plan, join a system, you can ignore it or you can try to replicate what the Rough Rider network is doing. You're starting to see rural hospitals understand that their need for partnership isn't simply because they need capital to build a facility or that they're going out of business. They realize the world is moving to value, and they need help in developing that expertise and functionality.
What are the strategic advantages of clinically integrated networks over an acquisition?
The biggest thing is independence through interdependence, and allowing hospitals to build the capabilities of scale. We are fully aware that we need great partnerships with our large, tertiary and quaternary facilities and our large payers. But in that relationship, we're trying to make sure that they also recognize the value that we bring to the table.
