Rural hospitals pool their resources to survive

A group of ten New Mexico hospitals is making a go of it in tough times.

 

Guadalupe County Hospital in Santa Rosa is home to the only emergency room between Albuquerque and Tucumcari — a 173-mile stretch of Interstate 40 that spans the lonely eastern half of New Mexico. The small city is home to fewer than 3,000 people, making it the largest town in a county with fewer than 5,000 residents. More than a quarter of the population lives below the poverty line.

For Guadalupe County’s isolated and scattered populace, the hospital plays a critical role. 

“If this hospital closes, my kids have nowhere to go,” says Christina Campos, the hospital’s CEO. “My neighbors have nowhere to go. My employees have nowhere to go.” In New Mexico, a remote hospital struggling to serve a poor community is a common scenario. According to federal data, one-third of the state’s population lived in “Health Professional Shortage Areas” in 2010. Thirty-one of New Mexico’s 33 counties faced shortages.

Like most rural hospitals in the state, Guadalupe County has had to fight to get by. Many of its patients rely on government health insurance, which often doesn’t cover the hospital’s costs, let alone provide a profit. That situation is only expected to get worse as the state faces a $417 million Medicaid shortfall. 

At the same time, the needs are overwhelming: New Mexico often finds itself near the bottom of nationwide lists related to health and well-being. America’s Health Rankings, for instance, placed it 37th in 2015, partly due to high rates of diabetes, drug deaths and children living in poverty. 

“Generally, the purpose of these hospital networks is to focus on helping (hospitals) thrive. But in the case of New Mexico, it’s to survive.”

Stephen Stoddard, executive director, New Mexico Rural Hospital Network


To better cope with those challenges, Guadalupe County Hospital is teaming up with other small hospitals to share information, hire experts and offer advice on how to navigate an increasingly uncertain industry. “We’re all facing the same thing,” Campos says.

In 2014, Santa Rosa and five other hospitals founded the New Mexico Rural Hospital Network, an initiative intended to improve cooperation — and, with it, fiscal health — among small hospitals scattered across the state. The network now contains 10 members, including Holy Cross Hospital in Taos. 

“All of our hospitals are the only hospital in their town, sometimes even in their whole county or beyond,” Stephen Stoddard, the network’s executive director, says.

The group’s creation was aided by the U.S. Department of Health and Human Services, which regularly funds rural hospital networks to improve efficiency, expand access and improve quality of care. In its most recent round of funding two years ago, the agency awarded a total of $11.6 million to 39 networks nationwide, from Alaska to Maine. The New Mexico network received a $300,000 grant. 

“Generally, the purpose of these hospital networks is to focus on helping them thrive,” Stoddard says. “But in the case of New Mexico, it’s to survive.”

In some cases, that means creating economies of scale: New Mexico’s member hospitals have entered into group purchasing agreements, for example, lowering prices on bulk purchases for necessities like bandages and bedpans. Guadalupe County Hospital has already cut its annual supply costs by nearly one-third, from $100,000 to $70,000.

Steve Rozenboom, CFO at Holy Cross Hospital in Taos, has participated in 'peer committee' meetings with others doing the same job and small hospitals across the state. Staff members say these quarterly meetings are a great way to share good ideas.
Katherine Egli

Before the network’s creation, says Campos, the CEO at Guadalupe County, “If you were a medical records office manager, you were the only one you knew. Now you have nine others that you can call on.”

That might sound simple. And obvious. But Stoddard explains that the staff of a small rural hospital is more likely to suffer from professional isolation that can hurt performance and stifle innovation. And without a formal network, conversations that inspire learning and creativity — and, in turn, lead to cost savings — usually don’t happen.

That was true for Leslie Sanchez, who oversees medical records at Guadalupe County Hospital and has been part of the network’s committee meetings for about a year. “It was just nice to be able to hear their experiences and their problems and realize, ‘Wow, I’m not the only one going crazy,’ ” Sanchez says.

Sanchez learned, for example, that another records clerk in Lovington had experienced a problem she was dealing with: doctors who failed to do paperwork. That clerk had developed a series of emails to prompt doctors to complete it. It was a simple approach, but it was more structured, Sanchez says. And it works much better than her strategy of gentle nagging. 

The network has also hired its own specialist to analyze contracts with insurance companies to ensure that terms are fair and comparable to other hospitals — expertise that would be hard for any one of these hospitals to afford on their own.

Furthermore, the network is working with the University of New Mexico to draw more medical students to do rotations in rural hospitals. Studies have found that attracting medical students to small hospitals makes it easier to hire them later, when they finish school. So the network gives these small facilities more to offer them, Stoddard says. 

For all the group’s accomplishments, its success remains tenuous. It’s not clear whether cooperation and bulk purchasing will be enough to keep small hospitals viable. But network members say it can’t hurt. If the network can prove its worth to its members, they might be willing to shell out more money or find funding elsewhere — and face these challenges as a group, rather than going it alone. 

This story is part of the "Small towns, big change" project through the Solutions Journalism Network.

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