Rural hospitals unite to ensure their continued existence
In a significant move aimed at preserving the independence of rural healthcare institutions, independent rural hospitals in North Dakota are joining clinically integrated networks. This strategic move is a response to the growing trend of larger health systems acquiring smaller hospitals, and an opportunity to share resources and collaborate on value-based care contracts.
The initiative, spearheaded by companies like Cibolo Health and the Rough Rider Network, is gaining momentum. Stephen Burns, the founder and CEO of Cibolo Health, and Scott McKain, the founder of the Rough Rider Network, are at the forefront of this movement.
The Rough Rider Network, serving about two-thirds of rural North Dakotans, is one such network. It has been successful in utilising its members' combined patient rolls to negotiate better prices for services like mobile imaging trucks. This not only benefits the hospitals but also the patients, as it ensures affordable and accessible healthcare services.
Cibolo Health, a for-profit company that provides management services to nonprofit networks owned by hospitals, has been instrumental in launching and managing networks in rural areas. Besides North Dakota, Cibolo Health has helped establish networks in Minnesota, Nebraska, Montana, and Ohio, with a sixth one opening in September. The combined efforts of these networks will represent more than 120 hospitals, with service areas covering 4.7 million people.
The benefits of these networks extend beyond healthcare services. By remaining independent, hospitals continue to be significant employers in rural areas, contributing positively to the local economy. Additionally, some networks invest in community development projects like broadband and housing, aiming to help people stay healthy and access care more easily.
Another key aspect of these networks is their focus on preventive care. Patients are contacted by Caret Health staff for preventive care, reducing the need for inpatient and emergency care. This proactive approach is made possible through the combined resources of the networks, ensuring a healthier community overall.
The networks also provide negotiating leverage to their members, making them more attractive to healthcare vendors. This has become increasingly important as the number of rural hospitals closing or downsizing has increased significantly over the past decade. Since 2010, 153 rural hospitals in the U.S. have shuttered completely or stopped offering inpatient services. Between 2011 and 2021, 441 rural hospitals merged with or were acquired by hospital systems.
Funding from the $50 billion Rural Health Transformation Program is being explored to help start or expand these networks. This could potentially accelerate the growth of these networks, ensuring the continued independence of rural healthcare institutions and the preservation of essential healthcare services in rural America.
