The Small Rural Hospital Transition Project

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Original story posted on: May 17, 2017

What is it going to take for a rural/critical access hospital (CAH) to survive and thrive despite the current disparity divide when three things are causing problems?

  • Rural healthcare has never recovered from the recession beginning in 2008, when 200,000 rural jobs were being lost per year.
  • Mortality rates are rising in areas where chronic diseases are prevalent, and this is tied to disparity gaps of care in underserved minority communities and based on lifestyle risks, environment, and geography.
  • The nation is currently embroiled in an opioid epidemic, wherein some communities with fewer than 500 people have received nearly nine million highly addictive and potentially lethal pills in a two-year period from out-of-state drug companies.


Enter the Small Rural Hospital Transition project(SRHT) created by the Federal Office of Rural Health Policy (FORHP), working with the National Rural Health Research Center. The SRHT project is designed to position rural healthcare within the triple aim of better care, smarter spending, and creating healthier people to create market competition tied to patient value. This process will include:

  • Transitioning rural hospitals to value-based care and alternative payment models (APMs)
  • Introducing population health within the context of rural healthcare delivery and models of value, quality, and outcomes.


As a result, this will make critical access hospitals more resilient, strategically focused, financially solvent, and quality-driven and service-competitive. In many cases it has also helped with workforce retention, engagement, and physician clinical recruitment.

Examining the Challenges of Care

Rural hospitals have long had challenges from the aforementioned issues of recruiting providers, offering competitive salaries, and simple proximity, causing market uncertainty, lowering margins, and the reduction of provider revenue and opportunities. This pertains to leadership, culture, governance insight, and understanding of strategies, policies, operations, and finances – and overall patient understanding of brand, perception, and choice. Additional concerns have been limited access to investments, older structures, regulatory burdens, and the ability to strategically and resourcefully be nimble to adjust to and implement changes to comply with congressional and Centers for Medicare & Medicaid Services (CMS) reimbursement changes. This aforementioned readiness program allows those rural hospitals that want to become most well-equipped in the marketplace to cross the shaky bridge from fee-for-service payment systems to population-based systems.

Program Elements and Eligibility

The SRHT program provides on-site technical assistance to help selected hospitals transition to value-based care and to the APM model. The program also shares best practices and successful strategies among rural health network leaders and rural hospitals.

Eligible hospitals must be located in a rural community setting as defined by the FORHP, as well in an area known as a persistent poverty county (PPC) or a rural census tract of a metro PPC location. The hospital also must have, according to its most recent Medicare Cost Report, 49 beds or less, and it may be a nonprofit or for-profit facility.

Overall, recipients of a Small Rural Healthcare Quality Improvement grantor a Rural Health Network Development Program grant are also encouraged to apply. 

Primary Focus Areas

The primary areas of focus include:

  • Financial operational assessment (FOA) focusing on strategies and tactics to improve quality, patient satisfaction, and operational efficiencies
  • Quality improvement (QI) is patient-centric/patient-centered, focusing on the deep dive of assessment and processes of transition of care, care management, utilization review, care coordination, resource utilization, quality outcomes, and discharge planning.


High SRHT Project Expectations

The SRHT project requires total team ownership and accountability, with high expectations, engagement, commitment, and thoroughness from all levels and stakeholders – including employees, leadership, and board members (in some cases, performance reviews are tied to work and outcomes within the SRHT project to keep a sense of total team engagement and buy-in). There must be a sense of culture of excellence to improve financial performance and operations, including a post-project assessment.

Strategic Focus and Willingness

Selected hospitals must be timely in every step to be able to be a part of the program. They cannot skip steps nor delay dates, and this requires everyone to be on the same page for deliverables to meet program elements and readiness requirements. Participants must track project measures to determine measurable outcomes; adopt key transition strategies for delivery and reimbursement for value-based care; prepare for population health patient focus; implement best practices that will improve financial performance; and improve quality of care and increase operational efficiencies.

The Consultation Process

Each hospital selected must also engage in pre-project planning activities; complete a transition planning self-assessment; hold a pre-project planning call; participate in a kickoff webinar; and submit data requests via an interview. During the first on-site consultation, interviews are conducted with executives/management, medical staff, and board members, and a discovery process regarding best practices to increase operational efficiencies and strategies to position the hospital for the future is conducted. During the second on-site consultation, a report is presented back to executive management providing consultant recommendations (via Stroudwater Associates) and feedback on departments, documentation provided on pre-project values, and action plans to initiate in the implementation process.

SRHT Success Outcomes

An impressive overview of prior successes was recently shared at the National Rural Health Association (NRHA) annual conference in San Diego (presented by the National Rural Health Resource Center, Stroudwater Associates, and Pender Community Hospital – Pender, Neb.). Of four hospitals participating, three showed an increase in patient revenue by an average of 11 percent, from a previous value of approximately $52 million to a new value of nearly $58 million; two showed an increase in days cash on hand, going from 55 days to 66 days; three hospitals showed an increase in Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) discharge planning results, going from approximately 46 to 62 percent; and finally, three QI hospitals decreased their total readmission rates from almost 16 to approximately 11 days – all making for vibrant testimony that the SRHT program works. 

Successful Program Participants and a Sampling of Strategies/Outcomes

Those reaping the success include White Mountain Regional Medical Center in Springerville, Ariz.; Madison County Memorial Hospital in Madison, Fla.;  Monroe County Hospital in Monroeville, Ala.; and Pender Community Hospital, Pender, Neb. 

An overview of key strategies addressing culture include increasing leadership awareness of rural healthcare realities; obtaining an update on strategic planning to implement the “bridge strategy” identified earlier; and engaging and educating boards and medical staff regarding the program elements and necessity of population health management.

Engagement benefits included maximized financial performance, with at least one hospital showing a 10-percent margin increase, systems integration implementation, improved functions of operational efficiencies, increases in patient safety and quality as a competitive edge, and partnership and provider alignment through expanding primary care network and specialty services.

In the area of payment systems, the participants’ successes included development of shared savings models, inclusion in accountable care organization (ACO), participation/determination of an attribution model, and the development of a patient-centered medical home model (PCMH), and a self-funded employer plan.

The final area of population health included the development of care transition teams, care management strategies, and evidence-based protocols, while learning to advantageously use claim data and tools to manage patient and employee populations.  

Invaluable Rural Resources

The National Rural Health Resource Center (Bethany Adams can be reached via www.ruralcenter.org) also provides a plethora of resources for all CAHs, including a Rural Hospital Toolkit for transitioning to Value-based Systems; a Financial leadership and Rural Provider Leadership Summit Report Findings; and Population Health Portal and Help webinars.

Rural Sustainability

While the “shaky bridge” of crossing from fee-for-service to fee-for-value might seem like walking a tightrope at first, the depth of the successes within the SRHT program, complemented by the pairing of Stroudwater and the National Rural Health Resource Center, show that there is paramount commitment and passion to let as many rural/CAH hospitals as possible enter into a transition to allow for success.

Changing Perceptions

In an era when many a researcher/study show that CAHs located in a population of 10,000+ with a Walmart are the best criteria for survival, at least one of the participants of the SRHT program has defied the perception and studies. It is a community of fewer than 1,200 people, with the nearest Walmart 45 minutes away, that has successfully transitioned to become one of the most competitive and financially strong CAHs in the country, with a newly expanded and well-fortified provider team and several new specialty services.

This is one “shaky bridge” well worth crossing, and there is proof that while the odds and disparity divide widen, there are still innovative successes for rural healthcare to aspire to attain. 

Janelle Ali-Dinar, PhD

Janelle Ali-Dinar, PhD is a rural healthcare expert and advocate with more than 15 years of healthcare executive experience in many key areas addressing critical access hospitals (CAHs), rural health clinics (RHCs), physicians, and patients. Dr. Ali-Dinar is a sought-after speaker on Capitol Hill. A former hospital CEO and regional rural strategy executive, Janelle is also a past National Rural Health Association rural fellow, Rural Congress member, and Nebraska Rural Health Association president. She is currently the Nebraska DHHS chair of The Office of Minority Health Statewide Council, addressing needs of rural, public, minority, tribal, and refugee health, and she serves on the Regional Health Equity Region VII council as co-chair of Rural Health and Partnerships. Janelle holds a master’s degree and doctorate in communications and is a recent graduate in public health leadership. Janelle is currently the vice president of rural health for MyGenetx and is a member of the RACmonitor editorial board.  

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