In a recent article published in American Hospital & Healthcare Management, our CEO and founder, Barbara Stinnett, argues that the crisis facing rural hospitals in the United States has reached a critical stage, with more than 700 rural hospitals – roughly one-third of the nation’s total – at risk of closure due to severe financial distress. More than 300 are considered to be in immediate danger. She warns that proposed Medicaid policy changes could further worsen the situation by increasing uncompensated care and placing additional pressure on already fragile healthcare organizations.
In the article, entitled “The Rural Hospital Crisis: How to Strengthen, Stabilize and Sustain,” Barb said hospital leaders must focus on four key priorities: stabilizing operations, strengthening talent and assets, ensuring continued access to care, and preparing for an orderly closure if survival is no longer possible. She emphasizes that every community requires a customized strategy rather than a one-size-fits-all solution.
The first step is operational stabilization, which includes developing a strategic plan, assessing community health needs, reducing costs, and improving financial performance. Barb identifies revenue-cycle management as one of the most significant opportunities. Many rural hospitals suffer from inadequate billing, coding, and documentation processes, resulting in extremely high claim rejection rates. She cites examples where 80% or more of claims were initially rejected and notes that one health system had approximately 900,000 unpaid claims. Improving reimbursement processes, adopting better technology, and bringing in specialized expertise can dramatically improve a hospital’s financial outlook.
The second priority is strengthening hospital talent and assets. Rural hospitals often struggle to recruit and retain qualified staff, especially during periods of uncertainty. Barb recommends conducting audits of personnel, equipment, and community needs, then using temporary or specialized professionals to fill critical gaps and maintain quality care while long-term solutions are developed.
For hospitals that ultimately cannot remain open, Barb stresses that closure should not mean abandonment of the community. Instead, healthcare leaders, community organizations, and regional partners should collaborate to create alternative care models, including independent clinics, home care, and telehealth services. She highlights an ongoing effort in northern Minnesota where more than 40 providers are working to ensure continuity of care if local hospitals close.
Barb concludes that rural hospitals are far more than healthcare facilities – they are economic anchors, major employers, and essential components of local emergency response systems. Whether hospitals survive or close, leaders must act decisively and collaboratively to protect access to care and preserve community well-being.
To engage in a conversation with Barb about this important issue, or to address your community’s hospital problems, start by simply emailing us at hi@timmarongroup.com.
