According to the American Hospital Association, 72 million people live in rural areas and depend on the local hospital serving their community. The nation’s 2000 rural community hospitals serve as an anchor for their regions' health related services. Recognizing this fact, the U.S. government has passed legislation that is intended to improve the financial operations of rural hospitals which include: (1) the Critical Access Hospital program under the Balanced Budget Act of 1997 and (2) the Affordable Care Act that expanded Medicaid in most states and widened the definition of “low-volume hospitals.”  

 

Despite this legislation, rural hospitals continue to struggle as their low volumes, on an individual basis, make rural hospitals vulnerable to several factors including the loss of key personnel, reimbursement cuts, economic downturns in their markets and increasing demands for capital to update facilities, equipment and information technology systems.  RHG intends to assist the rural healthcare market and address the operating challenges of the hospitals through consolidating administrative functions and creating economies of scale that no stand-alone hospital could attain. By way of example, the administrative functions to be consolidated will include professional centralized management, physician recruitment and retention, strategic planning, human resources, patient records, regulatory compliance, general accounting, billing and collection, reimbursement and revenue cycle, purchasing and supply chain, financial planning, and cost reporting. The consolidated entity will also be better able to attract the capital required to upgrade equipment and information technology systems.