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Generating new revenue with hospital labs

Like many critical access hospitals struggling to keep their doors open, Lost Rivers Medical Center in Arco, Idaho, was in dire straits a few years back. The hospital had filed for bankruptcy in 2013, and Brad Huerta was recruited as the hospital’s new CEO to help turn it around.

huerta.jpgThe turnaround in recent years has been stunning, due in part to Huerta’s pursuit of new partnerships and revenue streams. “Today we’ve retired the bankruptcy and we’re one of only two hospitals in the state with zero debt service,” Huerta says. “We opened the first Level IV trauma center in Idaho and implemented the first telepharmacy and cloud-based EMR programs in the state.”

The hospital’s geographical footprint is larger than the state of Rhode Island, and it’s the only health care facility serving 12,000 people in central Idaho. “We’re held to the same standards as a larger system, but we have lower patient volume and fewer resources to get it done,” Huerta says. “That’s why we’re always striving for creative solutions to help us close the gap.”

Leveraging excess capacity

“Our partnership with InReach is an example of the types of solutions rural hospitals need to stay in the game,” Huerta says. “We’re mandated to have laboratory equipment and technicians available to run lab tests at all hours of the day and night, but we’re not using our labs to capacity due to low patient volume. With InReach, we can leverage some of that excess capacity and get more from our investment.”

Through its partnership with InReach, Lost Rivers Medical Center processes lab panels for physician offices and urgent care clinics within 200 miles of the hospital. “InReach runs the management of the program while we handle the clinical side,” Huerta explains. “It’s a win-win because we’re making use of our excess capacity, and physicians around the state can get their lab results done quickly instead of outsourcing their labs out of state.”

Gainshare solutions

With patient volume declining in many rural hospitals across the country, Huerta believes finding ways to utilize excess capacity will help rural hospitals stay competitive in changing conditions. “Rural areas aren’t getting any bigger,” he says. “They’re already small, and many areas are seeing population decreases. This is a major challenge in rural health care, and as long as we’re in an environment where volume is rewarded, we’re going to struggle.”

In Huerta’s experience, “gainshare” models where partnerships are tied to the success of the program have been the most effective. “With a gainshare model, everyone is invested in the financial viability, patient satisfaction, and overall success of the program. That’s why we went with InReach. In an age of shrinking volume and shrinking reimbursement, they gave us a viable service line that doesn’t depend on either of those,” Huerta says.

Collaboration among rural hospitals is another critical component. “The success of Lost Rivers Medical Center is based on the ability to stand on the shoulders of others who are willing to help, including groups like NRHA and rural hospital collaboratives,” Huerta says. “Now we’re in a position where we’re able to pay it forward by collaborating with other hospitals facing some of the same challenges.”

To learn more about scalable solutions for hospital laboratories, visit inreachdx.com.

NRHA commissioned the above piece from InReach Community Diagnostics, a trusted NRHA partner, for publication within the Association’s Rural Health Voices blog

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