Some small hospitals face losing independence if they want to keep up with technological advances

Many of the country's 2,000 rural and small-town hospitals say don't have the time or money to transition to electronic medical records. That's creating a dilemma for some rural hospitals, which are faced with a decision whether to continue using inferior paper records but retain their independence, or partner with a bigger company, allowing them access to electronic records, but costing them some or all of their independence, Eric Whitney reports for NPR. (Whitney photo: Dr. Billy Oley and Dr. William George, right, from Beartooth Billings Clinic in Red Lodge, Mont, which became part of the Billings Clinic system in exchange for help with its digital medical records)

"Starting this October, hospitals that don't meet digital records standards will be hit with financial penalties which would make the digital leap even harder to pull off," Whitney writes. "Sharing electronic records sounds simple. But for a lot of little hospitals doing that while meeting new means coming up with $1 million or more up front. That's a tall order, when the average rural hospital runs at a financial loss of 8 percent a year."

Some smaller rural hospitals are aligning or merging with larger hospitals, but when they do that "they give up some, or maybe all, control of their operations – everything from which records system they'll use to which doctors and services are available where," Whitney writes. "But affiliating with a big network often has benefits and can improve the care available in small towns."

"For many rural hospitals it's a point of pride, and matter of survival, to stay independent, and make their own decisions about the future," Whitney writes. But that pride can cost them. Brock Slabach, a vice president with the National Rural Health Association, told Whitney, "We're very concerned about a digital divide that might be created going forward between the urban haves, if you will, and the rural have-nots." (Read more)