By Bruce G. Krider, MHA, American Healthcare Appraisal LLC
Rural hospitals across the country are facing unprecedented pressure. With over 700 facilities at risk of closing and many operating on razor-thin margins, the need for proven, actionable strategies has never been greater. Yet amid the headlines of closure and crisis, a growing number of rural hospitals are not just surviving — they are stabilizing, rebuilding, and even thriving.
The hospitals that are turning things around share several common approaches. They are making difficult decisions about service lines, building smart partnerships, embracing technology, and engaging their communities with transparency. Here are the strategies that have made the biggest difference for rural hospitals across the country.
1. Right-Size Service Lines Around Community Need
One of the most impactful strategies among successful rural hospitals is a deliberate shift away from maintaining every service in its traditional form. Instead, leaders are prioritizing high-demand core services — emergency care, inpatient medicine, and outpatient diagnostics — while redesigning or exiting services that no longer serve their mission or margin.
Troy Regional Medical Center in Alabama exemplifies this approach. Under CEO Rick Smith, the hospital expanded outpatient and same-day service options, aligned staffing models with actual patient demand, and exited a non-profitable service line. The result: improved operating margins, reduced length of stay, better throughput, and a more financially stable organization.
Roosevelt General Hospital in New Mexico took a complementary approach, expanding into surgical subspecialties — orthopedics, urology, and cardiology — that were needed in the community and could serve as significant new revenue sources. The hospital started small, with only a few days per month, and planned to scale up as volume increased. Pinckneyville Community Hospital
in Illinois took yet another angle, carefully evaluating each insurance contract to ensure it was profitable before signing.
The lesson is clear: rural hospitals cannot be everything to everyone. High performers protect services that match local demand and can be delivered safely, while reimagining or exiting those that cannot.
2. Master the Revenue Cycle
Revenue cycle improvements have been a cornerstone of financial recovery for many rural hospitals. The strategies vary — some outsource, some bring functions in-house — but the common thread is a disciplined focus on getting paid for the care already delivered.
Three Rivers Health faced $6 million in old accounts receivable and staggering long-term debt. By outsourcing its revenue cycle and prioritizing community trust, the hospital recovered $2.6 million in AR and reduced its debt. Memorial Hospital of Carbon County brought medical coding in-house, partnered with a new revenue cycle management firm, streamlined payer enrollment, and strengthened payer relationships. These efforts raised its cash on hand from 3 days to 25 days.
Eureka Springs Hospital in Arkansas converted to Rural Emergency Hospital status in 2023 and is now focused on rebuilding its revenue cycle from the foundation up. Interim CFO Doug Hoban monitors reserve accounts multiple times a day and works with software vendors to improve collections on open accounts receivable.
For hospitals that have struggled with revenue cycle performance, outsourcing to a specialized partner can provide immediate relief and expertise. East Adams Rural Healthcare in Washington partnered with MultiCare to handle billing and revenue cycle work, and the hospital’s CFO credited that move with significantly increasing revenue.
3. Build Strategic Partnerships That Fill Capability Gaps
No rural hospital can do everything alone. The most successful facilities are forming partnerships that give them access to capabilities they could never build independently.
Potomac Valley Hospital in West Virginia won the AHA’s 2026 Rural Hospital Excellence in Innovation Award for its virtual ICU program. The 25-bed critical access hospital partnered with Ruby Memorial, the flagship of WVU Health System, to have intensivists review patient charts and use telehealth to discuss patients’ needs in real time. This partnership allowed the hospital to reopen a shuttered ICU and go from near-empty beds to full occupancy — all while keeping patients in their home community.
St. Lawrence Health in northern New York formally affiliated with Rochester Regional Health in January 2021. The integration gave the three-hospital rural system access to capital, specialized expertise, and operational resources it could not access alone. The experience was not without challenges — geographic distance, differences in labor environments, and concerns about community identity all required thoughtful leadership — but the affiliation provided a pathway to long-term sustainability.
Partnerships can take many forms. Clinical affiliations give smaller hospitals access to specialty care and establish referral relationships for complex cases. Management agreements provide interim or long-term leadership and resources to improve performance. Rotating specialists bring expertise on a scheduled basis. What matters is that the partnership fits local demand and existing workflows — not that it follows a prescribed model.
4. Invest in Workforce Innovation
Workforce shortages are the single greatest operational challenge for most rural hospitals. The facilities that are succeeding have moved beyond traditional recruitment and retention approaches to more creative strategies.
Heywood Healthcare in Massachusetts deliberately recruits physicians and advanced practice providers who are mission-driven and value a private-practice feel. The hospital emphasizes its lack of bureaucracy compared to large systems, allowing providers to focus on patient care and actively partner with leadership in decision-making. The approach has resonated especially well with providers who value proximity to nature, clean air, and affordable housing — and once they come, they tend to stay for the entirety of their careers.
Lincoln Health in Colorado has partnered with an immigration law firm to support international nurse recruitment, primarily for its long-term care facility. Culture fit is central to the strategy: the hospital wants physicians who understand what it means to live in a remote frontier community where the next closest hospital is roughly 100 miles away. The hospital is also growing its local pipeline — its COO recently began teaching a certified nursing assistant course for high school students through a local community college.
Retention is just as important as recruitment. Strategies that have worked include more flexible shift options (4-, 6-, and 10-hour shifts in addition to traditional 8- and 12-hour shifts), retention bonuses, free memberships to local facilities, and financial incentives for meeting performance goals. At Scotland County Hospital in Missouri, CEO Meagan Weber has focused on growing the local workforce since 2022, creating career pathways for residents who want to stay in the community.
5. Use Telehealth to Extend Reach, Not Just Replace Visits
Telehealth has become an essential tool for rural hospitals, but the most successful implementations go beyond simple video visits. They use telehealth to fundamentally expand what the hospital can offer locally.
Potomac Valley Hospital’s virtual ICU is a prime example. The partnership with Ruby Memorial means that patients who would previously have been transferred to a larger facility can receive critical care in their own community, close to family and support systems.
UPMC developed an inpatient telepalliative care service across six rural hospitals in Western Pennsylvania. The program completed 841 encounters over 26 months, with volumes growing from 8 encounters per month to 66. The service was designed with a shared-cost business model and focused on empowering local staff to champion the program.
Telehealth can also reduce avoidable transfers. High-performing rural hospitals define which cases can remain local with specialist support and which require transfer. Clear criteria reduce uncertainty for emergency clinicians and create a safer, faster escalation process. Hospitals that track transfer reasons, consult response times, and accepted local cases can identify where a new protocol or partnership could make the greatest difference.
6. Consider the Rural Emergency Hospital Model
For some rural hospitals, the Rural Emergency Hospital (REH) designation has been a financial lifeline. The model, which took effect in January 2023, allows facilities to close infrequently used inpatient beds and focus on 24/7 emergency and outpatient services. In exchange, hospitals receive a 5% Medicare outpatient payment increase and an average annual facility payment of about $3.2 million.
Harper County Hospital in Oklahoma is a compelling success story. The hospital had operated at a loss for 10 consecutive years, averaging only 1.5 to 2 inpatient cases per day. After converting to an REH in October 2023, the hospital has made money every month except one — a positive swing of almost $300,000 from the prior year’s deficit. The hospital expanded outpatient offerings including pulmonary rehabilitation, wound care, sleep studies, and diabetic education, matching new service lines with both patient demand and clinical capacity.
The conversion is not without tradeoffs. Hospitals lose inpatient and swing bed services, and some state-level funding may not continue. Clifton-Fine Hospital in New York found that some grants it expected to continue did not, leaving the facility short of projected revenue in its first year. But for hospitals where inpatient volumes have declined to unsustainable levels, the REH model offers a predictable financial foundation that allows them to preserve what their communities use most: emergency and outpatient care.
7. Lead with Transparency and Community Engagement
Perhaps the most underappreciated strategy among successful rural hospitals is radical transparency. When communities understand the financial realities their hospital faces — and the path forward — they become partners in the solution rather than obstacles.
Harper County Hospital held town hall meetings in each municipality before its REH conversion. By explaining that no positions would be eliminated and that the conversion would add services, hospital leaders built trust and secured broad support.
East Adams Rural Healthcare in Washington held two community forums to address concerns and outline a path forward as it worked to avoid closure. The hospital’s CFO described the approach simply: “Everything we do we talk about, and share what the next steps are. That includes the community — whether they asked a clinical, financial or legal question, they walked away from the meetings with answers”.
MaineHealth has taken community engagement further by integrating primary care with public health through its Center for Health Improvement. The system uses a hub-and-spokes model where community health departments in each local hospital’s service area oversee partnerships with primary care clinicians, local government agencies, schools, and community-based organizations. These partnerships are guided by multisector community coalitions and address health issues prioritized by community health needs assessments.
The Bottom Line
No single strategy will save every rural hospital. The challenges are too diverse, and the circumstances too varied. But the hospitals that are succeeding share common traits: they are honest about their financial realities, disciplined about their service lines, creative about partnerships and workforce, and transparent with their communities.
The path forward is not about doing more with less. It is about doing what matters most with focus, intention, and the courage to make difficult choices. Rural hospitals that embrace this mindset are not just surviving — they are building a foundation for the next 50 years.
