As rural hospitals across the country face mounting financial pressures and shrinking margins, the question of survival is no longer simply about keeping doors open — it’s about whether the traditional acute care model is still the right fit for every community.
For Len Lacefield, CEO of Clinton (Okla.) Regional Hospital, the answer is clear: not every hospital should survive in its current form. And forcing all facilities to remain as full-service acute care hospitals may, in some cases, do more harm than good.
“I don’t think all hospitals in today’s market should probably survive as a hospital,” Mr. Lacefield said during a June 17 panel at Becker’s CEO+CFO Virtual Forum. “How can we gear down certain rural community hospitals that still function, that don’t risk lives — like a [rural emergency hospital] model — and still provide the community some level of security.”
REHs are a Medicare provider type created under the Consolidated Appropriations Act, 2021, offering rural facilities a potential lifeline to avoid closure. Transitioning to an REH model allows hospitals to scale down from full-service acute care to focus solely on emergency and outpatient services. The designation has helped preserve essential healthcare access in communities while relieving the financial burden of maintaining underused inpatient beds.
“For our hospital, with an inpatient census of one for the most part, it made a whole lot of sense,” Dierdra Sorrell, CEO of Clifton-Fine Hospital in Star Lake, N.Y., told Becker’s. “We really struggle with getting the inpatient census since we’re in a very remote location and the closest hospital to us is about a 50-minute drive.”
For many rural areas — particularly in Oklahoma — this shift is becoming increasingly urgent. Of the state’s 71 rural hospitals, 23 are at risk of closing, according to a Feb. 11 report published by Chartis, a healthcare advisory services firm.
Too often, small-town hospitals are grappling just to make payroll, making it increasingly difficult to build long-term, sustainable strategies, according to Mr. Lacefield. In today’s challenging environment, rural hospital leaders must be especially thoughtful in how they approach partnerships and alliances — the stakes are high, and the wrong deal can carry serious consequences.
“[Rural hospital] alliances need to be strategic and sound so we can reduce cost, increase revenue, but offer the services that’s required to meet the needs of the community,” Mr. Lacefield said. “Make sure how you move forward makes sense for a sustainable relationship. What you don’t want to do is dive into [a partnership], maybe your license or your credentials, and then be left out in the cold in 24 months.”
In a healthcare environment where rural closures are accelerating, Mr. Lacefield’s perspective underscores a difficult but necessary conversation: the future of rural healthcare may not mean preserving every hospital as it is today — it may mean building something different to ensure healthcare in the community survives.
