Cottage Hospital in Woodsville, N.H., was facing a negative 16% margin less than a year ago — and Holly McCormack, the hospital’s president and CEO, knew the math wasn’t going to fix itself.
Travel staff costs had ballooned into the hospital’s single largest expenditure. Ms. McCormack and her leadership team set hard reduction targets and committed to meeting them before the end of the fiscal year. The plan required asking permanent staff to absorb additional hours while the hospital simultaneously ramped up permanent hiring. It was not a popular request but the results were significant for a 35-bed critical access hospital. In roughly four months, Cottage Hospital recruited nearly 40 nurses. Travel staff volume fell by 70%. But the human element remained a challenge.
“When you talk about a reduction in travel, what that meant for a little while was some of our staff were working longer hours, and that was difficult,” Ms. McCormack said during a “Becker’s Healthcare Podcast” interview. “When they heard a reduction in the workforce, everybody wonders what that means for them. But what we needed to do is make sure that we were fairly compensating our staff and that we were asking a little more for them so they felt that appreciation.”
When word spread that the hospital was reducing its travel workforce, permanent staff began asking what the change meant for them. The honest answer — that they’d be working more, at least for a while — had to be delivered carefully and repeatedly. Ms. McCormack said she and her team made sure staff felt fairly compensated for the added burden, but looking back, she believes more consistent communication with nursing staff in particular would have smoothed the transition.
“Looking back now, a year almost a year later, I think we could have done a little bit of a better job of communicating consistently, particularly with our nursing staff,” she said. “But I will say that it was a necessary route that we had to take, and I am proud of the accomplishment.”
With the margin stabilized, Ms. McCormack said the organization’s attention has shifted to retention. Recruiting 40 nurses in four months is one achievement. Keeping them is another, and the hospital is now examining its onboarding process after reviewing how many of those hires are still on staff.
Fair compensation and benefits are table stakes, she said. The differentiator, particularly at a small community hospital competing with larger systems for the same nurses, is mission clarity.
“I think a very important part of our culture is transparency, and I think it matters to people the ‘why’ for what they do,” Ms. McCormack said. “We need to tie whatever we’re doing back to our mission and make sure that everybody realizes how important they are to what we’re trying to do and the mission for why we come to work every day.”
Ms. McCormack also flagged the rural health transformation program as a strategic lever that critical access hospitals should be watching closely. She sees it as a potential path to expanding services, and keeping patients in their communities, that thin margins have historically made impossible.
“Somebody’s ZIP code should not dictate the kind of care that they get and we want to make sure that they can get the right care, best care close to home,” she said.
Ms. McCormack has been with Cottage Hospital for 16 years, previously serving as its chief nursing officer before stepping into the CEO role. She is a registered nurse by training — a background she said shapes how she thinks about every decision, including this one. The turnaround, in her telling, was never primarily about the numbers. It was about making sure the people doing the work felt seen, valued and clear on why they were being asked to give more.
“I’m making sure we’re keeping everybody engaged and that I am clearly communicating to my team what our vision is, what our strategy is, so they can clearly communicate that to the rest of their team,” she said. “We all have to be rowing a ship in one direction. We have to be working towards the same goal, and I think that is very important.”
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