7 Proven Strategies to Increase Profitability of Your Rural Hospital

Posted on June 28, 2017



By Mike Milligan, The Rural Healthcare Marketer

There's no easy fix, but there is a strategy to achieve profitability for your rural hospital.  In fact, there are 7 effective solutions:

  1. Building relationships with referring physicians
  2. Forming strategic partnerships
  3. Retaining patients and sustaining their satisfaction
  4. Choosing marketable and profitable service lines
  5. Engaging employees
  6. Strategically planning marketing efforts
  7. Implementing marketing that produces results

Based on Legato's experience of working with rural hospitals throughout the nation, I'll cover these topics in more detail in an upcoming NRHA webinar. For now, I'll address the first two points, and future blog posts will discuss the other solutions.

Building relationships with referring physicians.

I find this to be one of the most missed opportunities in rural healthcare.  Every situation is different.  Sometimes you have visiting surgeons in key areas such as orthopedics, urology, or ophthalmology.  And as you know, the success of your hospital is predicated on performing procedures at your organization, not the mothership affiliated with the referring physician. I hear all too often, "well they set up a clinic here, but that's just to see patients.  Then they refer them to (insert larger city 1-2 hours away)."

Like any successful business interaction, there has to be give and take.  Sometimes this is the contract stage, or later.  But, there has to be an understanding that there is a mutual benefit in having a provider set up an office on your campus.  Collecting rent for their office space doesn't pay the bills for you.  What I have found is that referring providers are much more open to conversations about which procedures can be brought to your hospital than what you might give them credit.  At the same time, it's having the realistic discussion about which procedures make most sense to be done locally, and which should go elsewhere.

As an example, maybe the diagnostic work can be done locally, and the total joint replacement gets referred.  Or the endometrial ablation is done locally but the more complex gynecological or urological procedures are done elsewhere.  Or maybe some of the more complex procedures can be done locally.  Of course, part of this conversation is about the equipment, staffing and efficiency of your operations - and frankly, treating your referring physician like a customer.  What does he or she need?  How can these be mutually beneficial?

Remember in the end, you are still promoting your services and not the individual physician's practice, as we want to stay clear of any Stark or anti-kickback concerns, but these key physicians are vital to keeping your organization in the black.

Forming strategic partnerships.

You may want to remain independent, but how can you do that in the ever-changing dynamics of rural health? We see a lot of press about hospitals closing, or the uncertainly of proposed legislation and its impact on rural health.

I would suggest that the definition of "independence" might need to be reconsidered.  In other words, generally, rural hospital leaders look at independence as the ability to control their own destiny and keep decisions local.  This can still be done, even if it means reaching out and getting creative about future relationships.  The first point is exploring possibilities, and realizing in the end you may not decide to pursue any of them.  However, as an example, I've seen rural hospitals form relationships with competitors for certain situations, or to share the services of a surgeon.  I've seen joint ventures formed, or rural hospitals becoming affiliated with a system, rather than being purchased.  The key to me is keeping your autonomy, but also being smart about what makes the most sense from a viability perspective - and separating emotion from fact.

Please understand, I am a strong proponent of rural health and organizations staying independent and local.  But I also know that every situation isn't black or white, and some of the more successful rural hospitals I've seen are represented by leaders who look at situations from all angles.  It gets complicated at times, because sometimes it's also about educating a board of directors, whose members may have varying levels of business or healthcare experience.

Check out part 2 of this blog series here.

Thanks for reading, and feel free to reach out to me anytime with your comments or suggestions for other blogs.

Happy 4th of July to you and your families,


Attend Our Upcoming Webinar

Register for our upcoming webinar, July 12 at 2:00 CDT "7 Proven Strategies to Increase Profitability of Your Rural Hospital" presented by Mike Milligan, President of Legato Healthcare Marketing. Mike will provide a no-nonsense webinar with practical tips for rural healthcare executives to put into immediate action.

Register Here


Be the first to comment

6 Easy Ways to Increase Patient Volume

Posted on June 23, 2017


how to increase patient volumes
The Cure for Declining Patient Volume

Rural hospitals aren't going extinct - and neither are their patients. As an administrator of a rural hospital, rest assured that even as larger systems encroach on your territory and things look bleak, there are steps you can take to boost patient volumes and infuse your facility with more patients and opportunities.

1. Celebrate Who You Are

What are your facility's mission, vision, and values? Do they involve being the largest hospital system in the United States?  With affiliates in every major city? Of course not. Chances are, your mission is to provide high quality medical care to the people of your own community. Embrace your vision and honor your values. Promote these priorities in all your marketing materials. Make sure this is front and center on your website. Educate employees on this goal. When the community is more aware of your gem of a facility (devoted to them, not profits, by the way), patients will be more likely to select you for their healthcare.

2. Start with Primary Care

An effective primary care program will have new patients flocking not only to your clinic, but to your other service lines as the occasion arises. A strong primary care program will be self-sustaining and then some. Investing in primary care will pay off in patient volumes.

3. Add Service Lines

What community need is not being met? It won't take too much digging to find out what valuable services you could offer at your facility. Perhaps your community has climbing cases of Type 2 diabetes; consider offering diabetes management. Perhaps your community is aging; offer geriatric care and home medicine equipment. Or maybe there isn't a wound care program in your area. Providing a service that meets a deep need in your community not only increase patient volumes, it's just the right thing to do!

4. Make Your Staff Brand Ambassadors

Happy employees will spread the word. If your employees are proud of what they do, if they feel valued, and if they believe in their hospital, they will share it with the world. Leverage their enthusiasm by creating a brand ambassador program for them to participate in if they choose to.

5. Be Where the Patients Are

Where are your potential patients? That's right: online. You may think that a rural hospital doesn't need a strong online presence. You would be wrong. When a potential patient searches for a service, make sure your facility pops up right away. Savvy digital marketing tactics will make sure potential patients are aware of the wonderful care you provide close to home.

6. Get Involved with Your Community

Your hospital is not the faceless corporate entity that your big city competitor may be. Maybe you don't have their money, but they don't have your heart. Be involved in your community. Sponsor athletic teams and fun runs, and get into the schools by offering healthy eating programs and other educational events. After all, they aren't just your community: these people are your friends, neighbors, and even family.

When patient volumes start to decline, you must work fast to stop the bleeding. Luckily, there are a variety of things you can do to boost patient volumes and help your facility thrive no matter what competition or challenges you are facing.

Want to Learn More?

Register for our upcoming webinar, July 12 at 2:00 CDT "7 Proven Strategies to Increase Profitability of Your Rural Hospital" presented by Mike Milligan, President of Legato Healthcare Marketing. Mike will provide a no-nonsense webinar with practical tips for rural healthcare executives to put into immediate action.

Register Here


Be the first to comment

5 Ways Healthcare Organizations Can Improve Employee Engagement

Posted on June 1, 2017

How Healthcare Organizations Create Cultures That Drive Employee Engagement

You've heard the phrase "happy wife, happy life." The same can be applied to any employee. It's no surprise that healthcare organizations with high employee satisfaction rates also have high patient satisfaction rates. Joint Commission scores often go hand in hand, and in this case, correlation is at least partly causation.

Workplace Satisfaction Affects Patient Satisfaction

Patient satisfaction is the goal of any healthcare provider, and a key component of patient satisfaction is how staff treats them. When employees are content and workplace satisfaction is high, it manifests itself in high-quality patient care. But it's important to focus on your employees for more reasons than this. Your employees are your "brand ambassadors." They represent your organization in and out of the workplace. In marketing terms, they are walking and talking spokespersons for your brand. It's important to make sure they have good things to say.

How to Get Healthcare Employees Engaged

Here are some ways to make sure your staff feels engaged and appreciated and will help embody and demonstrate the values of your brand.

  • Create a Vision: Work with employee representatives to define a desired work culture. Post a one sentence mission statement in staff areas and break rooms. This helps establish a standard for both employees and managers to be mindful of - both sides should be working to achieve this mission.
  • Ask and Listen: Engagement improvement starts with surveying employees. Get a feel for where you currently are with an online culture IQ test or create your own survey. Take the feedback seriously. Something you think is minor could be a major point for employees, and a simple fix of a long-term annoyance will go a long way.
  • Start a Brand Ambassador Program: If you want to take your survey a step further, consider starting a brand ambassador program. This is an important element of making sure your employees are being heard and equally important when it comes to building your brand.
  • Communicate and Recognize: Even more than money, a majority of employees cite appreciation as their biggest motivator. Have an employee recognition board or highlight key players in a community publication. Whatever you do to recognize the good work your employees are doing, be sure to communicate this. Write a letter to the particular employee and make sure the staff is aware (through email or company meeting) of teh employee being celebrated.
  • Let Them Help: Those in healthcare are often particularly motivated when it comes to lending a helping hand. Give your employees opportunities to help with fundraising or other organization extracurricular activities. These should never be mandatory, but even so, you will be surprised how many employees step up to help. This is not only good for your causes, but it creates a sense of ownership over the organization that motivates people to help even more.

When employees are engaged, they are more likely to stay and become long-term, devoted healthcare employees. They are more likely to demonstrate higher quality of care. The benefits are numerous,  as this study shows. So remember: Employees feeling good about themselves and their jobs is reward enough, but when this translates so clearly to better patient care, these tips aren't just beneficial, they are essential to the health of your whole organization.


Be the first to comment