Rural hospitals often operate with far fewer days of cash on hand than larger health systems, which can leave little room to absorb a financially challenging year, like unexpected capital needs or staffing shortages.
Rural healthcare leaders have taken to tightening their revenue cycle operations, rethinking how and when they deploy capital and leaning more heavily on grants and outside funding to shorten this gap, even as similar cost pressures that force them to preserve cash also demand continued equipment, staff and technology investments.
Becker’s connected with four hospital CEOs and CFOs to discuss the steps they’re taking to build stronger cash reserves, and the obstacles standing in their way.
Editor’s note: Responses have been lightly edited for clarity and length.
Angela Davis, CFO, Bartlett Regional Hospital (Juneau, Alaska): At Bartlett Regional Hospital, we are strengthening our cash position by focusing on the full revenue cycle from front-end authorization and insurance discovery through billing, denials management and collections. We have completed end-to-end process mapping and are centralizing key functions such as prior authorization while prioritizing improvements based on financial return, implementation effort and cost. At the same time, we are maintaining disciplined expense and capital management and evaluating reimbursement opportunities available to rural providers.
The greatest obstacle is the growing disconnect between strong patient-service demand and the timing and adequacy of reimbursement, particularly as rural hospitals navigate uncertainty around federal programs and other reimbursement changes. For rural hospitals, building cash reserves requires both operational discipline and a reimbursement environment that sustainably supports the essential services our communities depend on.
Jason Hinkle, CFO, Illinois Region of Deaconess Health System (Evansville, Ind.): In rural healthcare, strengthening liquidity starts with the fundamental blocking and tackling of healthcare finance: closely monitoring payer and reimbursement trends, managing labor relative to volume, being disciplined with capital deployment, and scrutinizing every dollar going out the door. As we build our three-year capital plan, we’re factoring in the headwinds we anticipate across the industry and being increasingly intentional about when and where we deploy capital. With how quickly medical technology advances, we also look for opportunities to redeploy equipment to smaller facilities and affiliate hospitals as upgrades occur at our flagship locations.
We’ve also increased our focus on securing outside funding for needed investments through new grant opportunities and Rural Health Transformation funding. The biggest challenge is that many of the same headwinds requiring us to preserve cash are occurring at a time when rural hospitals need to continue investing in our people, facilities, technology, and access to care, making that balance more important than ever.
Debbie Mann, Executive Vice President, CFO, Schneck Medical Center (Seymour, Ind.): At Schneck Medical Center, we have become laser-focused on optimizing our revenue cycle to ensure accurate and timely reimbursement from payers. To strengthen our financial position and preserve cash, we have implemented tools to monitor contract compliance, review zero-balance accounts to verify proper payment, improve revenue cycle workflows, and closely evaluate charge capture processes. We are also exploring ways to leverage artificial intelligence to support more accurate coding and faster claim submission. Like many healthcare organizations, our biggest challenge remains increasing payer denials and the significant time, technology, and staffing resources required to manage appeals and secure appropriate reimbursement.
Rex McKinney, President and CEO, Decatur County Memorial Hospital (Greensburg, Ind.): While rural hospitals may operate with fewer days of cash on hand than larger health systems, that does not mean they require less liquidity. In many cases, rural hospitals face unique financial challenges, including the need to recruit providers and specialized staff from outside the community, higher supply costs when lower volumes limit purchasing discounts, and less leverage in payer negotiations.
At Decatur County Memorial Hospital, the focus has been on strengthening liquidity, maintaining access to credit, and improving operations, while also using grants and other resources to enhance services and support the community we serve. Long-term financial stability depends not only on building reserves, but also on continuing to invest in our people, equipment, technology, and facilities.
A strong liquidity strategy gives rural hospitals the flexibility to navigate unexpected disruptions while continuing to invest in the services their communities depend on.
