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Our Take

Defining what it means to be a best-in-class rural health system

    How to meet the needs of rural communities at scale

    Rural health makes up a meaningful piece of the nation’s health care infrastructure, but delivering care in rural settings is hard to do. The challenges these rural providers face are both wide-ranging and well-documented. But too often, the conversation stops at defining the problem.

    To succeed in the face of major challenges in rural care delivery, we must learn from the providers finding a way to overcome the odds, innovate, and bring high-quality care and economic vitality to the roughly 20% of the country living in rural settings.

     

    Who is considered a “rural system”?

    There is no one standard definition of “rural” or “rural system.” CMS provides facility-level classifications based on the US Census Bureau definition of rural. But rural providers agree that rural looks different across geographies, and many providers serve both rural and non-rural patient populations. In the absence of a precise definition, it makes sense to be inclusive; we propose a broader definition that includes systems that self-identify either as rural or as having a significant rural footprint.

     

    Conventional wisdom

    The national conversation on rural health perpetuates the idea of “rural” as “problematic”. The focus revolves primarily around obstacles—higher incidence of poverty, exacerbated workforce shortages, declining patient revenue bases—all leading to extensive hospital closures.

    These obstacles are real. Workforce shortages are more dire and more difficult to mitigate in rural settings. Rural populations represent less favorable payer mixes. Rural patients are, on average, older, poorer, sicker, and have higher incidence of unmet social needs, leading to disparities in access to care. Rural areas average 13 PCPs and 30 specialists per 100,000 people compared to 31.2 and 263 per 100,000, respectively, in non-rural areas, and 60% of federally designated health professional shortage areas are rural counties.

    Rural hospitals are also struggling financially: 47% are operating on negative margins; 25% are vulnerable to near-term closure; many have closed service lines in recent years. Between 2010 and 2021, 138 rural hospitals have closed their doors completely.

     

    Our take

    The conventional wisdom isn’t entirely wrong, but it’s incomplete. It paints an oversimplified picture of rural providers, and it’s somewhat fatalistic. It leaves out the more optimistic parts of the picture that, if better understood, could help identify solutions and chart ways forward for rural health as a whole.

    Three key observations:

    • “Rural providers” are not a homogeneous group. Not all rural providers are small, independent critical access hospitals – which are indeed often struggling. Medium and large rural-only systems and systems with significant mixed rural and non-rural footprints also make up large swathes of the rural health care delivery landscape. Examining the work of these providers, we see that achieving even moderate regional scale enables providers to marshal the resources needed to attack workforce shortages, provide rural access to specialty care, secure grants, influence policy, and raise clinical quality.
    • Among rural systems, we see differences in management capabilities, sophistication, and outcomes. While rural finances are challenging, some rural system leaders have demonstrated the ability to combine scrappiness with financial savvy to run healthy operations and even extend the halo of their clinical services to benefit the health infrastructure of the regions they serve. This same savvy enables these systems to actively invest in and contribute to their communities’ economic wellbeing, beyond serving as major employers.
    • All rural systems have room to learn and grow. In some areas, such as blending and braiding finance levers, many providers and systems have opportunities to learn from the best practices of others. In other areas, such as bolstering effectiveness in rural policy advocacy, even the strongest-performing leadership teams agree there is potential—and urgency—to improve.
     

    Six hallmarks of a best-in-class rural health system

    When the landscape is full of challenges and so many providers are struggling, it is critical to identify the actions and providers that are succeeding – and understand their keys to success. To find avenues for progress and improvement, we should look to a working set of ‘best-in-class’ attributes observed among rural systems.

    There cannot be a one-size-fits-all model for a best-in-class rural health system, especially given the diversity of the environments in which rural systems operate. However, through interviews with rural providers that appear to be performing well compared to their peers on traditional metrics of success like financial sustainability, quality, and patient access, we have identified some key characteristics and capabilities that seem to position rural systems to succeed in overcoming their unique challenges. On that basis, we propose the following set of attributes as a starting point for defining a ‘best-in-class’ rural system.

    Sponsored by
    sanford health

    This article is sponsored by Sanford Health. Advisory Board experts wrote the article, conducting the underlying research independently and objectively. Sanford had the opportunity to review the article.

    • strategy

      Ensure leaders are adept at the art of rural financial leadership

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      Cultivate rural clinical workforce pipelines

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    • strategy

      Skew toward keeping care as local as possible

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    • strategy

      Improve the sustainability of local, non-owned providers

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      Serve as economic backbones of their communities

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      Represent rural interests in state and national policy (though this is often aspirational)

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    Parting thoughts

    Right now is a unique time for rural health. While the challenges facing rural providers remain persistent as ever, a convergence of factors is setting the stage for best-in-class rural health systems to take on a more prominent voice in the national health care discourse.

    Covid-19 shone a light on rural areas. It increased the awareness of the structural barriers to health and resulting disparities faced by rural populations; it also increased the appeal of rural living for many, demonstrated by increased migration from urban to rural areas with the expansion of remote work. The explosion and predicted staying power of telehealth, and the acknowledgement of the role it plays in providing rural access to care will benefit rural systems in both the near and long term. Record amounts of federal funding are pouring into supporting rural providers and tackling longstanding rural challenges like access to internet. And support for improving rural health comes from both sides of the political aisle, meaning it’s unlikely to go away soon.

    But a brighter spotlight and an increase in grant funding, while positive in the short term, will not solve the challenges rural providers face. To take advantage of the opportunities presented in this moment, best-in-class rural systems need to chart the way. And that starts with establishing goal posts for what it means to be a ‘best-in-class rural system’: leveraging resources and scale to combat obstinate barriers to care delivery, improve the health and economic infrastructure of a region, and ultimately amplify rural voices in national decision-making.

     

    About the sponsor

    Sanford Health, one of the largest health systems in the United States, is dedicated to the integrated delivery of health care, genomic medicine, senior care and services, global clinics, research and affordable insurance. Headquartered in Sioux Falls, South Dakota, the organization includes 46 hospitals, 1,500 physicians and more than 200 Good Samaritan Society senior care locations in 26 states and 10 countries. Learn more about Sanford Health's transformative work to improve the human condition at sanfordhealth.org or Sanford Health News.

    Learn More About Sanford

    This research was sponsored by Sanford Health. The content, views, and opinions contained herein are copyrighted by Advisory Board and all rights are reserved. Advisory Board experts wrote the content, conducting the underlying research independently and objectively. Advisory Board does not endorse any company, organization, product or brand mentioned herein.

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