Creating a Sustainable Future for Rural Hospitals

nurses and other healthcare workers walking in a rural hospital
Written by
Calvin Henninger
September 13, 2023

Table of Contents

Rural hospitals are crucial in providing healthcare services to millions of Americans in remote and underserved areas. While larger metropolitan areas typically host extensive hospital networks, these rural hospitals often serve as the only healthcare access points for Americans living outside of more populated areas. 

However, many of these facilities are also facing significant financial challenges that not only threaten their survival but also affect the livelihoods of their staff. This article explores the financial issues plaguing rural hospitals, their impact on staff incomes, and potential solutions for creating a sustainable future, including the use of new technological solutions and the promotion of per diem or PRN nursing.

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The Impact of a Rural Hospital Closing

The closure of a rural hospital can have negative impacts on the affected community. In many cases, the closure of a hospital results in reduced access to healthcare services, forcing residents to travel long distances for even basic medical care. 

This travel alone can lead to delayed treatment, worsened rural health outcomes, and increased mortality rates.

Additionally, hospital closures result in job losses for healthcare professionals and support staff, contributing to economic decline in rural areas that are already relying on these hospitals as economic providers. The closure also hampers the community's ability to attract new businesses and residents, further eroding the community’s economic prospects. 

Overall, the shuttering of a rural hospital has a cascading effect, impacting both individuals within the community and the overarching economic well-being of the community itself.

The Financial Challenges of Rural Hospitals

Healthcare in rural America has always struggled to serve its population effectively and efficiently—sometimes with dire outcomes for the patients. A rural hospital closing due to financial issues can leave thousands of Americans without much-needed access to healthcare. 

Unfortunately, many rural hospitals operate on thin (or non-existent) margins, struggling to cover their operational costs. Several factors contribute to their financial challenges:

  • Low patient volume: Rural areas typically have lower population densities, leading to a lower patient volume compared to urban hospitals. With fewer patients, rural hospitals have less revenue to sustain their operations.
  • Demographic challenges: Rural areas often have aging populations with a higher prevalence of chronic illnesses, which demand more ongoing healthcare services for individual patients. At the same time, patients who are retired typically use government healthcare, which provides a lower cost margin for hospitals than private healthcare.
  • Reimbursement rates: Medicare and Medicaid reimbursement rates for rural hospitals tend to be lower than those for their urban counterparts, making it difficult for these hospitals to come out ahead.
  • Limited specialization: Rural hospitals may lack the specialization and advanced technology available in urban medical centers, which means they often transfer patients to larger facilities for specialized care. Patient transfers can also lead to a loss of revenue.

However, many of these issues stem from—and contribute to—another huge problem that these hospitals face: being able to attract and retain a reliable workforce.

Impact on Staff Incomes

The financial struggles of rural hospitals have a direct impact on the incomes of their staff, especially nurses and physicians. These dedicated professionals are often paid less in rural settings compared to urban hospitals. 

Unfortunately, lower pay rates make it difficult for these facilities to attract and retain top-flight talent. Doctors and nurses are naturally more willing to relocate to urban areas with competitive healthcare markets and salaries than remain in rural areas that are serviced by a single hospital.

These migrations, in turn, contribute to ongoing staffing shortages. Hospitals are then forced to rely on travel nurses—who are willing to travel to remote rural areas—and expensive nurse staffing agencies. Due to this lackluster staffing model, these hospitals end up paying more, particularly as the overall number of qualified nursing professionals diminishes. 

Furthermore, the staff who remain at these hospitals are quickly overworked and burned out (as a result of ongoing staffing shortages), further incentivizing them to leave their current positions and seek work elsewhere. Each employee who quits places an additional burden on those who remain, adding further momentum to the vicious cycle that is already in motion.

Without a serious change in the current rural healthcare marketplace, many of these facilities face a bleak future.

Promoting Per Diem/PRN Nursing

One excellent solution many rural healthcare facilities are using to address staffing challenges is to promote per diem or PRN nursing. PRN nurses work on an as-needed basis, a model that offers flexibility to both healthcare professionals and rural hospitals. 

There are a few reasons this staffing model is an attractive option:

  • Flexibility: Per diem nursing offers nurses the flexibility to choose when and where they work. This flexibility can attract experienced nurses who might not be available for full-time positions.
  • Cost-effective: Rural hospitals can save on employee benefits and long-term contracts by hiring per diem nurses. This reduction in staffing costs can help them manage their budget more efficiently.
  • Reduced burnout: By having a pool of PRN nurses to draw from, rural hospitals can better manage staffing during peak periods or staff shortages, reducing burnout among full-time employees.
  • Skills diversity: Per diem nurses may bring a variety of skills and experiences from different healthcare settings, enriching the overall competency of the hospital staff.

Emerging Technology: A Lifeline for Rural Hospitals

Rural hospitals grapple with unique staffing challenges due to limited budgets and the need to balance cost-effectiveness with quality patient care. Emerging technology now serves as a game-changing solution for these institutions.

  1. Enhanced efficiency: New apps and technology can help optimize staffing schedules, ensuring that rural hospitals have the right number of nurses without overstaffing, which helps save money.
  2. Reduced overtime costs: By accurately forecasting staffing needs and minimizing last-minute adjustments, this tech helps lower expensive overtime expenses that often burden rural hospitals.
  3. Improved quality of care: Consistency in staffing levels, qualified staff allocation, and reduced nurse burnout lead to better patient care, enhancing patient outcomes and satisfaction.
  4. Cost-effective staffing: New technology like Nursa can help empower rural hospitals to maximize their full-time nursing staff, reducing reliance on expensive contingent staff like agency nurses.

For many rural healthcare facilities, per diem nursing solutions like Nursa provide a cost-effective, efficient, and quality-enhancing solution for rural hospitals. They streamline scheduling, reduce costs, and ultimately contribute to the sustainability of these vital healthcare institutions as they strive to serve their communities effectively.

Helping to Heal Rural America

Rural hospitals are critical to ensuring access to healthcare in rural communities, but their financial challenges have far-reaching implications. Often, these challenges affect the hospitals and their staff, as well as the greater community relying on that hospital. 

The closing of rural community hospitals can cause a series of cascading issues for that community that can be felt for years or decades afterward.

However, technology offers a lifeline for these hospitals, with new options for securing contingent staff on short notice. Additionally, working with per diem nurses can provide a flexible and affordable solution to staffing issues, enhancing the sustainability of rural hospitals. 

As we work toward creating a sustainable future for rural healthcare, these solutions can ensure that rural hospitals continue to serve their communities effectively. Sign up with Nursa today to build that future for your facility.

Blog published on:
September 13, 2023

Calvin is a contributing copywriter at Nursa who specializes in nursing content centered around healthcare technology for both facilities and clinicians, medical terminology, and current events.

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