Some rural hospitals find ways to survive and thrive; 'The secret sauce is always ... strong, collaborative leadership'

Rural hospitals across the nation are threatened with closure – more than 100 have closed since 2010 – but many have found ways to survive and thrive, with a generous helping of community support and creative collaboration. 

Take Lakeland Community Hospital, in Haleyville, Alabama. When Mayor Ken Sunseri found that the hospital would close by the end of 2017, he knew it couldn't be allowed to happen. The town of 4,000 would lose a major employer and the nearest emergency room would be at least 45 minutes away. He began making calls to other hospitals, legislators and potential investors to figure out how to keep the doors open, and kept hearing the same message: take ownership of the hospital, Katelyn Newman reports for U.S. News & World Report.

"So that's exactly what the community did. Hospital employees worked extra shifts as Sunseri and the City Council worked on the necessary contracts, partnerships and loans to acquire the facility from Tennessee-based Curae Health, which filed for bankruptcy late last year," Newman reports. "Officials cut the number of inpatient beds from 59 to 49, and local authorities approved a 1-cent sales tax, as well as a county property-tax increase, to help fund hospital efforts. A city and county authority now owns Lakeland, which is operated by Java Medical Group."

A tax hike might normally be a "reelection death notice," Sunseri told Newman, but he never heard any complaints about it, and that he felt the community supported it for the sake of their hospital.

"Simply stated, rural hospitals are anchor institutions – their success or failure dictates the success or failure of the community itself," Alan Morgan, chief executive officer of the National Rural Health Association, told Newman. "There's so many other health care services that are anchored into these rural hospitals. So hospitals, schools, small business – if you pull the leg out on one of those three, you're going to lose the little town."

The rural hospitals hit first in the wave of closures tended to be in communities with a high percentage of people of color and high rates of Medicaid coverage. That's because Medicaid tends to reimburse hospitals at lower rates than private carriers, which can erode a hospital's bottom line. "At the same time, states that haven't expanded Medicaid coverage – like Alabama – can be hit especially hard, with hospitals providing pricey, unreimbursed care to large pools of people who don't have any insurance at all," Newman reports.

Rural hospitals also have a harder time recruiting new physicians and other health care workers. One rural hospital in Montana has been able to lure more physicians to the area because of the local skiing industry. "On July 1, nonprofit Kalispell Regional Healthcare opened the first floor of Montana Children's – a $60 million pediatric facility funded by debt, operating reserves and philanthropy that offers high-level specialists and residential options for families whose kids are receiving care," Newman reports. Before then, the closest similar facility was in Spokane, Washington, a four-hour drive away.

In McKenzie County, North Dakota, the natural-gas and oil boom in 2010-18 doubled the local population to 13,600 between. Residents had to drive at least 50 minutes to get some health services, but "Thanks to federal and state loans, oil industry and private-citizen donations, and local funding – including a sales tax increase – the new McKenzie County Hospital in Watford City marked its one-year anniversary in June," Newman reports. "Each rural community is unique, Morgan of the National Rural Health Association says. But among those where hospitals have survived, 'The secret sauce is always just really strong, collaborative leadership'."