Southern Coos Hospital & Health Center is pursuing new service lines, partnerships and long-term planning efforts as it works to strengthen financial sustainability amid ongoing pressure on rural providers.
Raymond Hino, CEO of the 21-bed critical access hospital in Bandon, Ore., said the organization has focused over the past year on initiatives designed to both stabilize operations and address access gaps in its community. Recent legislative changes, including HR-1 and the rural healthcare transformation fund providing $50 billion to states will impact the hospital going forward.
“We’re obviously concerned about protecting our Medicaid utilization to the extent that we can, and we’re encouraged by the rural healthcare transformation program and the dollars that have been granted to the state of Oregon,” said Mr. Hino during an interview on the “Becker’s Healthcare Podcast.” “We’re working closely with the state of Oregon on how those funds are going to be utilized in our facility and other rural facilities around the state. It’s, of course, so important at this time because even before HR-1, the Oregon hospitals really have been struggling for several years.”
One of the most consequential moves was the launch of a hospital-owned retail pharmacy in June 2025. The pharmacy industry has been in flux, with sudden closures creating access challenges for rural communities.
Southern Coos had already identified pharmacy access as a pain point, citing long lines and limited alternatives in the community. Leaders also viewed the pharmacy as a potential outpatient revenue stream at a time when traditional hospital margins remain thin. When Rite Aid closed roughly 30 days before the hospital pharmacy opened, demand accelerated far faster than anticipated, eliminating what leaders had expected to be a gradual ramp-up period.
“We are fortunate that we had some internal resources, including a CFO on our staff who had previous experience opening a pharmacy,” said Mr. Hino. “We also enlisted the support of national companies. Cardinal Health was a huge help to us. We identified space in our clinic and we had to go through the whole construction project for the space for the pharmacy, hiring a staff from scratch and a new director of pharmacy.”
The hospital also had to think differently about 340B; it had participated in the past as a hospital but never on the outpatient side. Learning how to be successful with 340B with the outpatient retail pharmacy was challenging and required the hospital to hire a 340B coordinator.
The retail pharmacy opened on June 17, 2025 and “it’s been a huge success,” said Mr. Hino.
The hospital has been rebuilding service lines disrupted during the pandemic. Southern Coos recently reopened its surgery department after several years of planning and infrastructure upgrades. As part of that effort, the hospital invested about $800,000 to modernize its sterile processing department and onboard a general surgeon.
The focus on rebuilding core services comes as Oregon hospitals continue to face widespread financial strain. More than half of hospitals in the state have reported negative margins in recent years, according to Mr. Hino, intensifying the need for disciplined growth strategies among independent providers.
“Financial success, sustainability for our facility are going to be our number one challenge in the next year,” he said.
To diversify services further, Southern Coos is preparing to launch a new behavioral health program focused on seniors. Through a partnership with Senior Life Solutions, the hospital plans to offer group psychiatric services for older adults experiencing depression, loneliness and caregiver stress — needs the organization sees frequently in its retirement-heavy community.
“One of the things we’ve noticed is that there’s a lot of seniors in our community that are caring for loved ones and spouses, and that can be very emotionally draining,” said Mr. Hino. “This is a new service we think is going to be very important to provide support for caregivers and the seniors in our community.”
Beyond internal growth, Mr. Hino is also focused on regional collaboration. He is working with other rural hospitals across Oregon to form a clinically integrated network of 13 independent providers. The goal is to preserve local governance while creating scale for payer contracting, shared services and potential value-based care initiatives.
“The hardest thing for us next year is going to be managing the road back to profitability for our facility and sustainability,” said Mr. Hino. “We’ve been fortunate, as a district hospital, we do receive tax support, which helps us. We’ve typically been a break-even facility. Our goal is to be a sustainable and profitable facility, which is a challenge for us. But we believe with the new programs we’re creating and being very careful about where we can be more efficient in the coming years. We’ve got some opportunities up the road as well for that.”
Southern Coos is also looking further ahead. The hospital recently received grant funding to develop a master facility plan, marking the start of long-term discussions around expansion or replacement of its current building, which opened 25 years ago and has since been outgrown.
Despite ongoing uncertainty around reimbursement and federal policy, Mr. Hino said the organization is approaching the future with cautious optimism, grounded in partnerships and incremental growth rather than retrenchment.
“We’re not thinking of it in terms of devastation,” he said. “We’re thinking in terms of where can we grow, where can we build, where can we create new systems that are going to benefit our community and support our facility.”
