BOWMAN, N.D. — Independent rural hospitals are increasingly forming collaborative groups to share resources and combine bargaining power with the goal of saving money and improving patient care.
The networks, which have cropped up in several states in recent years, offer small-town hospitals an alternative to selling to large hospital systems and forfeiting local autonomy.
“We found that we could both have the power of negotiation as a larger entity but also be able to negotiate lower costs for services and equipment,” said Dennis Goebel, CEO of Southwest Healthcare Services, a Bowman hospital that is part of the 22-member Rough Rider Network in North Dakota.
Since 2010, 153 rural hospitals in the U.S. have either shuttered completely or cut inpatient services, according to the Sheps Center for Health Services Research at the University of North Carolina. And 441 joined hospital chains between 2011 and 2021, according to a report commissioned by the Coalition to Strengthen America’s Healthcare, an advocacy group consisting of hospitals and health associations.
Proponents of the networks hope more collaborations will be fueled by the recently approved federal $50 billion Rural Health Transformation Program, which became law as part of the sweeping tax-and-spend measure backed by the Trump administration.
Many hospitals that join networks are motivated by the chance to combine their patient rolls for value-based care contracts, a reimbursement model in which insurers pay providers based on the quality of care they provide and the health outcomes of their patients.
The hospitals can also pool staffers for health insurance plans, share specialists, and receive better rates on contracts for services ranging from prescription drug programs to mobile imaging.
Retta Jacobi recently took advantage of the latter service when a semitruck with an MRI machine inside its trailer parked outside the Bowman hospital in southwestern North Dakota, a sparsely populated region dotted with ranchland and Badlands rock formations. She hoped the scan would pinpoint what was causing pain in her shoulders.
The mobile MRI operation visits one or two hospitals in the Rough Rider Network each day. Without it, Bowman residents would have to drive 40 minutes for similar scans.
Researchers haven’t yet examined whether the networks are working, according to a 2020 paper from the Rand Corp., a research nonprofit.
But leaders from network members say their programs are saving money and improving patient outcomes by, for example, increasing rates of preventive care and decreasing hospital admissions.
Jacobi, who provides speech therapy to children in the local school district, is doing physical therapy after a doctor examined her MRI results. She’s thankful she could get a diagnosis and treatment advice without having to travel far for the scan.
“Anytime we can maintain more local control, it’s a good thing for our small towns,” Jacobi said.
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