Struggling rural hospitals aligning with one another and a major urban one to survive

Some struggling rural hospitals have found a way to remain open: by aligning with other rural hospitals and a major urban one, Michael Ollove reports for Stateline. For example, the Southern Arizona Hospital Alliance consists of four southern Arizona rural hospitals and the Tuscon Medical Center. The alliance "is negotiating better prices on supplies and services. And the Tucson hospital has promised to help its rural partners with medical training, information technology and doctor recruitment."

The alliance, "which is similar to ones in Kansas, Mississippi, Washington state and Wisconsin, hopes that by joining they will avoid the fate of 56 rural hospitals that have closed since 2010," Ollove writes. "Another 283 rural hospitals are in danger of closing, according to the National Rural Health Association (NRHA)."

The Southern Arizona Hospital Alliance "offers the rural members multiple advantages," Ollove writes. "One of the most important is in purchasing. Their combined size will enable them to get discounts that are beyond them now. For example, instead of being a lone, 49-bed hospital with limited bargaining leverage, alliance member Mount Graham Regional Medical Center in Safford, is suddenly part of a purchasing entity with more than 700 beds." Keith Bryce, Mount Graham’s chief financial officer, said "he expects the added purchasing power alone will save Mount Graham 'in the six figures' every year."

The hospitals expect the combined size "will result in lower costs for employee benefits, workers’ compensation and medical malpractice insurance," Ollove writes. "Tucson Medical Center has pledged to use its own recruiting muscle to help its rural partners find providers who are willing to live in rural areas or at least regularly see patients there. As an incentive, Tucson will offer interested doctors help in managing the business aspects of their practices." (Read more)