Introduction to Rural Hospital Networks
Retta Jacobi stepped onto a metal platform that lifted her to an entrance on the side of a custom-designed semitrailer. Once inside, she lay down on a platform that technicians slid into an MRI machine. Jacobi hoped the scan would help pinpoint the source of the pain in her shoulders. The mobile MRI unit visits Southwest Healthcare Services, the hospital in Bowman, North Dakota, each Wednesday. Without it, the community’s 1,400 residents would have to drive 40 minutes to get to an MRI machine, an expensive piece of medical equipment the hospital couldn’t afford on its own.
The Rough Rider Network
Southwest Healthcare Services and 21 other independent, rural North Dakota hospitals are part of the Rough Rider Network, which used its members’ combined patient rolls to negotiate better prices for the mobile imaging truck. Independent rural hospitals are increasingly joining what are called clinically integrated networks, collaborative groups that allow them to avoid selling out to larger health systems while sharing resources to save money and improve patient care. Many are motivated by the chance to combine their patient rolls for value-based care contracts, a growing reimbursement model in which insurers pay providers based on the quality of care they provide and the health outcomes of their patients.
Benefits of Clinically Integrated Networks
Supporters of the networks are exploring whether funding from the $50 billion Rural Health Transformation Program — part of President Donald Trump’s recent tax and spending bill — can be used to help start or expand such organizations. For independent, rural hospitals, the networks are an alternative to shutting down or reducing services, or to giving up local autonomy and joining a large hospital system. “Anything that can help our rural hospitals and add services is awesome,” said Jacobi, who provides speech therapy to children in the local school district.
Challenges Facing Rural Hospitals
Since 2010, 153 rural hospitals in the U.S. have shuttered completely or stopped offering inpatient services, according to the Sheps Center for Health Services Research at the University of North Carolina. A far larger number, 441, merged with or were acquired by hospital systems between 2011 and 2021. That’s according to a report commissioned by the Coalition to Strengthen America’s Healthcare, an advocacy group comprising hospitals and health associations. The Rough Rider Network provides negotiating leverage to its members, which serve about two-thirds of rural North Dakotans, said Dennis Goebel, CEO of the Bowman hospital.
How Networks Help Rural Hospitals
Health care vendors “probably wouldn’t be talking to us if we’re by ourselves,” he said. “They’re not looking for the little, tiny crumbs. They want a big contract, and they’ll give you better pricing.” Some rural networks share specialists who aren’t needed full time at any one hospital, according to the Commonwealth Fund, a nonprofit focused on improving the health care system. Some networks also invest in broadband, housing, and other community development projects that can help people stay healthy and access care. Hospitals can pool staffers for a network-wide employee health insurance plan, said Nathan White, CEO of Cibolo Health, a company that helps launch and manage networks in rural areas.
Success Stories
White said he started Cibolo Health after a leader from an independent, rural North Dakota hospital asked him about collaborating with similar facilities. The Rough Rider Network launched in late 2023 with assistance from the company and $3.5 million from the North Dakota Legislature. Since then, Cibolo Health has helped start networks in Minnesota, Nebraska, Montana, and Ohio. Once a sixth one opens in September, Cibolo-affiliated networks will represent more than 120 hospitals, with service areas covering 4.7 million people, White said. The networks, which are nonprofits owned by the hospitals, pay an annual fee to Cibolo Health, a for-profit company, for management services.
Evidence of Effectiveness
The Rand Corp. wrote in its 2020 paper that it didn’t find any academic studies that examined whether these networks do what its supporters claim — save money and improve patient care. “In theory, quality should improve with the alignment of health care organizations, but there is no evidence,” the report said. The paper also said such networks could end up increasing prices, something that can occur with traditional mergers and acquisitions. However, leaders from existing networks claim to have evidence of their effectiveness. Community Care Alliance members have reduced their insurance costs while improving patient outcomes, such as reducing their need for inpatient and emergency care.
Conclusion
Joining a network to remain independent is also beneficial for the economy of rural areas, where hospitals are often major employers. Health systems sometimes cut services and staff at rural hospitals they acquire. Jacobi is taking medication and doing physical therapy after a doctor examined her MRI results. If that doesn’t work, she may need to make a five-hour round trip to Bismarck to get an ultrasound-guided steroid shot. Jacobi was thankful she could get a diagnosis and treatment advice without having to travel far for the MRI. “Anytime we can maintain more local control, it’s a good thing for our small towns,” she said.
FAQs
- What are clinically integrated networks, and how do they help rural hospitals?
Clinically integrated networks are collaborative groups that allow independent rural hospitals to share resources, save money, and improve patient care. They enable hospitals to combine their patient rolls for value-based care contracts and negotiate better prices with health care vendors. - How many rural hospitals have shuttered or stopped offering inpatient services since 2010?
According to the Sheps Center for Health Services Research at the University of North Carolina, 153 rural hospitals in the U.S. have shuttered completely or stopped offering inpatient services since 2010. - What is the Rough Rider Network, and how does it help its member hospitals?
The Rough Rider Network is a clinically integrated network that provides negotiating leverage to its member hospitals, which serve about two-thirds of rural North Dakotans. It helps its members share resources, save money, and improve patient care. - Can funding from the Rural Health Transformation Program be used to help start or expand clinically integrated networks?
Yes, supporters of the networks are exploring whether funding from the $50 billion Rural Health Transformation Program can be used to help start or expand such organizations. - What are some success stories of clinically integrated networks in rural areas?
The Rough Rider Network and the Community Care Alliance are examples of successful clinically integrated networks in rural areas. They have helped their member hospitals reduce insurance costs, improve patient outcomes, and maintain local control.
By Arielle Zionts, KFF Health News
