Measuring the Return on Investment for Community and Rural Hospitals

As community and rural hospitals continue to struggle to remain profitable due to the continuing changes in healthcare regulations and reimbursements, steps need to be taken to turn around hospitals and set them on a path to long-term profitability.

The path to long-term profitability typically requires more than simple cost cutting steps and includes the addition of new services, enhancements to facilities, optimization of staff levels, and improvements to collections and billing. Long-term viability requires sustained growth.

Although the steps to helping a hospital grow to profitability are known and proven, there is often a need for capital. This need puts the community leaders and community members in a situation where they have to decide if they are willing to invest in the future of their hospital.

Unlike traditional financial investments, the return the community receives is not calculated in dollars… It is the absence of access to healthcare the community must measure against the cost of the investment to calculate their return.

Like any investment, the return the community receives must be taken into consideration. But unlike traditional financial investments, the return the community receives is not calculated in dollars. Hospitals provide access to critical healthcare. It is the absence of access to healthcare the community must measure against the cost of the investment to calculate their return.

The community must ask itself, “how much is access to critical healthcare worth?”

Basically, the community must ask itself, “how much is access to critical healthcare worth?” The answer to this question comes down to the availability of alternative healthcare options.

In major metro areas, alternate healthcare needs are relatively close and abundant. In smaller communities and rural areas, the distance to medical centers can be significant and significantly more so when weather is taken into consideration.

Once a small town or rural community loses their hospital, it is gone for good. The cost of building a new one is too great.

For many communities in small towns and rural areas, it may not be easy to accept or fully understand why their local hospital needs additional public funding to remain solvent. The natural reaction to any new spending or tax is to push back and reject the concept. However, when it comes to access to healthcare facilities, the incremental expense may very well be worth it. Because once a small town or rural community loses their hospital, it is gone for good. The cost of building a new one is too great.

NewLight Healthcare specializes in turning around struggling hospitals and understands the difficulties communities face when it comes to financing a hospital turnaround. In some cases, no amount of money or effort can help. However, when additional funding creates the opportunity for long-term profitability, NewLight Healthcare knows the value of the return on investment.

To learn more about NewLight Healthcare and its approach to helping struggling hospitals grow to success, click here.