TriState Health, an independent critical access hospital in Clarkston, Wash., is navigating the complexities of rural healthcare expansion, federal and state funding gaps, and the operational demands of a multistate patient population.
TriState Health’s approach to capital development blends methodical financial planning with deep-rooted community support. One of the system’s biggest recent achievements was the completion of a $34 million inpatient wing, of which $9 million was raised locally and the rest from debt and balance from cash reserves.
This expansion reflects the health system’s historical independence — TriState does not receive tax support, unlike many of its critical access peers. That position creates unique accountability but also enables more flexibility in deploying funds and pursuing partnerships. This is especially important as traditional state and federal funding for rural healthcare dries up.
“The recent legislation that was passed at the federal level provides unclear paths for Medicaid reimbursement and some new paths that might provide needed funding for some of the infrastructure placements and service replacements, like our surgery building,” said Jim Heilsberg, CFO of TriState Health, during an interview with the “Becker’s Healthcare Podcast.” “Hopefully we’ll find some ways through that allows us to support building the surgery building. We’ve been successful at leveraging and partnering with the federal and state government to get money for CT and MRI that we added.”
Demand for imaging services has increased since TriState replaced its MRI and CT, and added a second CT, reflecting the broader community needs. TriState is also strategically expanding its employed physician network, recently bringing on orthopedics, dermatology and OB-GYN specialists. These expansions are carefully evaluated for both community impact and financial sustainability. While some service lines may not yield high returns, the system remains focused on long-term relevance and responsibility to the community.
“We still have people that are either direct relations or connected to the individuals who started the hospital; their grandchildren, children and others continue to work at TriState and live out the mission,” said Mr. Heilsberg. “The entrepreneurial feel of the hospital is very evident and the feeling of the family. We’re not normal. While many hospitals today have a rich tradition, and the words ‘mission over margin’ or ‘margin over mission,’ you have to have a balance. Many have struggled to keep those balances given the pressure being put on systems and individual hospitals, let alone for-profit hospitals that have pressure for returns.”
TriState reinvests all money gained back into the system and community; that type of accountability to the community has led to increased financial support. Local businesses want to see the health system succeed and grow. To meet current demand and prepare for future surgical growth, TriState is planning to expand from four to six operating rooms and add a centralized sterilization department. These efforts are supported by both public funds and technology-driven efficiency gains.
“We’re preparing clinic space, remodeling some areas to allow them to come in and make, needed impact with those services immediately,” Mr. Heilsberg said. “The other major areas looking to the future, how do we finance future projects including the surgery expansion, and that also includes replacing needed infrastructure.”
To offset rising costs and staffing constraints, the system is increasingly relying on automation platforms for both revenue cycle and patient engagement.
“We’ve leveraged Experian along with Luma, two different platforms that Experian is really for our revenue cycle and allows us to automate many things that were manual,” Mr. Heilsberg said. “Luma has allowed us to do that more effectively and efficiently.”
Located along the Washington – Idaho border, TriState serves a broad, multistate region that includes two different Medicaid models and reimbursement environments.
“Washington state has been known as one of the most, if not the most, aggressive in expanding Medicaid, in prior years. Idaho is known for being one of the most conservative,” Mr. Heilsberg said. “So that balance and partnership between the states to say, how do we, as a not for profit, balance that gain needed resources from states. It is a challenge.”
Despite the regulatory complexity, Mr. Heilsberg said TriState remains focused on local needs — even when they’re not financially advantageous. “There are needs that are not necessarily now and may not be in the future as profitable and and maybe that they aren’t profitable at all,” he said.
Looking ahead, he emphasized that strong leadership, staff engagement and technology adoption will be essential to sustain the organization’s mission.
“Money will continue to be what it is. There’s predictions of it being less over time,” said Mr. Heilsberg. “Looking in the future, I think automation is going to be one of the key things that allow us to in the future leverage what continues to be a restricting or decreasing resource: doctors, nurses and technicians. There are less of them than there were before, and yet the demand is getting larger. So there will need to be a path to discover how we do things more effectively and how we leverage technology.”
