In Rural Colorado, One Hospital CEO On Avoiding Closure During the Pandemic

March 29, 2021
“It's still tough out here in the land of rural, and there isn’t going to be anybody coming to save us,” says the CEO of Memorial Regional Hospital in Northwest Colorado

The COVID-19 crisis has had a devastating impact on just about every aspect of the healthcare landscape, but disparities do exist in entities’ abilities to respond. For example, smaller and rural healthcare organizations have fewer resources than larger, integrated delivery systems.

Another challenge more specific to rural hospitals is around the complexities with medical transport to and from rural areas. Ground travel could take several hours to get to a hospital with open beds, and while air travel is an option, protecting healthcare workers and flight staff when transporting very sick people with respiratory diseases in close quarters is not easy.

Taking a step back, it’s important to note that many rural hospitals have been on the brink of closing their doors, if they hadn't shut down already, even before the pandemic began. Since 2005, 180 of these facilities have closed, according to the North Carolina Rural Health Research Program. Another model developed by the Chartis Center for Rural Health noted last February that more than 450 rural hospitals are vulnerable to closure.

Compounding the issue even more is that “the 20 percent of the U.S. population that lives in rural areas consists of generally older individuals with more chronic conditions who are more likely to be under- or uninsured. They are more likely to be experiencing poverty and have limited access to healthcare,” Joanna Hart, M.D., an assistant professor of medicine at the Perelman School of Medicine, and head of the University of Pennsylvania's Leonard Davis Institute (LDI) of Health Economics Rural Health and Policy Research Working Group, said during a virtual seminar last June put on by the LDI.

"Rural hospitals tend to have lower days of cash on hand, and higher rates of negative operating margins," added a panelist of that session, Lisa Davis, director of the Pennsylvania Office of Rural Health and Outreach. "So they've been struggling traditionally. Then, a pandemic like COVID-19 comes along and they need to essentially pivot on a dime and close down service lines that tend to bring in revenues such as surgery, outpatient services, emergency departments. They don't have the economies of scale to be able to rely on other sources of revenue."

To discuss in more detail the unique challenges rural hospitals have been dealing with as a result of the pandemic, Healthcare Innovation Managing Editor Rajiv Leventhal recently spoke with Andy Daniels, CEO of Memorial Regional Hospital in Northwest Colorado, which includes a 25-bed hospital, multi-specialty medical clinic and a rehabilitation center. Daniels also discussed strategies his organization implemented to respond to the crisis and how the future landscape looks. Below are excerpts of that interview.

Can you give an overview of what the rural population landscape looks like where you’re located in Northwest Colorado?

We are very rural. Our county is 90 miles wide, and there are [about] 10,000 people who live in the county. It’s very large, geography-wise. There’s always a challenge here for resources, and not just from a pure fiscal standpoint. Rural [healthcare] has suffered a lot, especially when there were decisions—not necessarily here in Colorado, but in other states—to totally shut down elective surgeries, and not allow business to be done, whether it was safe or not. A lot of the decisions at state levels were broad and sweeping, and were not necessarily looked at through the lens of what was safe by region or area. That ended up hurting a lot of hospitals, and the volumes haven't recovered yet.

What has Memorial Regional done to try and speed up that recovery?

At least half of [hospitals] in Colorado run negative margins year after year. We've all suffered financially, and for us, I think we got lucky because the year prior we engaged with an outside company called Firstsource to be able to do our revenue cycle management. Prior to them taking over, I think we would have sunk. I really do. Between the lower revenues coming in with COVID and not having the technology and processes that they put in place to be able to really maximize our revenue cycle, we probably would have been one of those hospitals that either closed or filed bankruptcy.

What specifically did Firstsource do to save you financially?

In the middle of 2019, they took over our revenue cycle in terms of the billing and the payment posting, and then they worked really hard in 2020 to improve it. They [run] our whole revenue cycle, and they do it much better than we could ever. We watched our accounts receivable come down and our cash go up, which is what we needed when we were losing business.

Hospitals are losing billions, and I'm not just talking rural hospitals. They're projecting that hospitals could lose between $53 billion and $122 billion this year. Even though it feels like we may be on the other side of this, we are not recovering yet. People are still afraid to go to the doctor, they're afraid to get procedures, and they're afraid to come to the hospital. And with people out of work, they don't necessarily have the insurance to go to the hospital. We have patient reminders, and we've done follow-up care with email, text and phone calls. We work hard on the technology side to try to push that out as much as we can.

What else can you illustrate about the unique situation rural healthcare was put in last spring at the pandemic’s onset, and how that has evolved over the last year?

For much of rural healthcare, it became a resource problem. We had a very difficult time getting proper PPE, and the system was overwhelmed. At times, we were unable to transfer a patient to other locations. At least in Colorado, there were several times when bed capacity became very overwhelmed or near overwhelmed that the larger facilities told us, ‘Do the best you can. We will try to help you out but you're really on your own.’

So we really had to innovate on a lot of different ways. We had community members making masks for us, which was helpful at the beginning. We were working with groups, self-making hand sanitizer, doing those kinds of things. In some ways, we were a little lucky here that things didn't spread quite as fast at the beginning as they did in larger cities, but eventually it did catch up to rural. So we went through a few pretty bad surges, just as the rest of the country did.

Also, we didn't really have a telehealth presence or capability. Fortunately, Medicare and our state Medicaid allowed some waivers for that, and we had to get pretty creative pretty fast when things really shut down to be able to deliver some care. We started out using Zoom and other similar technologies to try to do patient visits, and now we've actually formalized that through our EHR, so we can now do those visits in a more structured way. We're not sure how much longer the waivers to do these things will exist for Medicare and Medicaid patients. Prior to the pandemic, both of those payers were not really accepting of paying for telehealth.

Our hospital also helped in the creation of a “rural playbook” for handling the pandemic that was written by the Colorado Hospital Association in cooperation with one of the large universities in Colorado. [Note: The playbook was written with the wisdom gained from over 30 interviews with rural health leaders and community members]. The playbook tells some of the good stories that were [compiled] from all of our hospitals.

How does the future of rural healthcare look like to you, specifically as hospitals have to now do outreach to patients letting them know it’s safe to come back in?

We have done marketing and social media pushes, trying to let people know that these are the steps we're doing to [ensure] safety. I don't know that we're terribly different than other businesses that are trying to do the same thing. I can't fix the economy side; the economy is going to have to come back before people are going to come back, to a certain degree. I think 2021 is still going to be a disaster, and I'm hopeful that 2022 may not be a disaster as more people get vaccinated this year.

So hopefully by 2022 we'll be back to some semblance of normal, but I don't think 2021 is looking great. I see our current volumes compared to the year before, and as compared to this time last year, our volumes are [significantly] down.  Our patient days were 22 percent higher than this time last year, our ED visits were 15 percent higher, and our clinic visits were 29 percent higher. So it's still tough out here in the land of rural, and there isn’t going to be anybody coming to save us.

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