A new survey of rural healthcare providers suggests a spot of optimism among care organizations that often skirt the line of financial sustainability.
Responding to a poll from advisory and accounting firm Wipfli, nearly all 75 responding rural care organizations—predominantly critical access hospitals—said they were either cautiously optimistic (72% of respondents) or completely optimistic (24%) about their organization’s current financial viability.
Further, 40% told the firm their financial stability was higher than a year prior, versus 22% who said lower, while 58% said they were more stable compared to the period just before COVID-19, as opposed to 25%. Seventy-eight percent said they were “not likely at all” to consider a merger or consolidation as compared to 12% that said a combination was likely.
The results weren’t surprising to Kelly Arduino, a partner in Wipfli’s healthcare consulting practice. She pointed out that rural respondents are now on the other side of a particularly tight period, when COVID-19 relief funds had run dry but providers were still facing “astronomical rates” for contract labor and other key expenses.
At the same time, she acknowledged that closures and service line cuts are still facing some communities—and that rural healthcare providers have a lower bar for financial sustainability than others.
“Their ‘doing well’ might not be the same level of ‘doing well’ as we would think of from a bigger organization,” she told Fierce Healthcare. “What’s doing well for them? That might be 60 days of cash on hand. Some organizations you’d think ‘Oh my God, it’s terrible,’ but they’re not at 12 [days]—so I think you need to kind of temper that.”
The survey also tended to grab more respondents from northern states, who are better reimbursed for Medicaid patients than some of their peers, she said.
“Historically, rural healthcare has been a bipartisan area of support; people understand the importance of it and [believe] that support would continue and potentially even expand,” Arduino said. “To see that potentially disappear just overnight—I think it brought everyone’s guard up, and that will continue. I have heard from our clients that it was a wake-up call for them of the reality of how quickly things could change, and it means that they’re just going to have to continue to dig in on making sure that they’re managing their finances as well as they can.”