May 17 2023

How Independent Hospitals Can Tap into Federal Funding

Independent hospitals serving rural communities can seek support from three key funding opportunities.

Healthcare organizations across the country continue to face tremendous financial and workforce challenges, many of which have worsened amid a global pandemic.

And though the federal public health emergency expired May 11 — and the World Health Organization declared that the spread of COVID-19 is no longer a global health crisis — that doesn’t mean the difficulties that have emerged over the past three years will suddenly disappear.      

For independent hospitals serving rural communities, these challenges are not entirely new. Even in the years before the pandemic, rural hospitals were already dealing with closures, unequal care access, staff shortages across clinical and nonclinical departments and slim operating margins. Adopting newer technologies and processes did not provide quick and easy solutions: Unreliable connectivity and lower digital literacy among communities with more aging members proved to be ongoing issues that needed complex and well-supported answers.

But independent hospitals don’t have to face these consistent problems alone. In fact, there are a number of key healthcare funding options that these organizations can apply for to help improve broadband connectivity and support expanding virtual care services.

Rural Healthcare Sidebar

Federal Funding Opportunities for Independent Hospitals

The COVID-19 pandemic spurred many large federal grant programs that, unfortunately, will not reoccur as the PHE expires. But these programs did lay the groundwork for prioritizing and enhancing virtual care services with the boom of telehealth adoption.  

As such, there are still several funding opportunities that independent hospitals can tap into:

  • Healthcare Connect Fund: This grant, managed by the Universal Service Administrative Co. (a not-for-profit corporation charged with administering certain federal grant funds), provides a 65 percent discount on broadband connectivity costs for eligible rural healthcare providers. It can provide funds for a router or switch directly connected to a service provider; help pay for installing network equipment and firewalls; and cover equipment warranties and maintenance contracts. This kind of consistent, noncompetitive funding would allow organizations to regularly budget for these needs.
  • Distance Learning and Telemedicine Grants: This competitive program, managed by the U.S. Agriculture Department’s Rural Development office, offers funding specifically to support digitally enabled connections for rural communities. For healthcare organizations, that would mean supporting the establishment or expansion of virtual care services. The grants can support audio, video licensing and interactive video equipment for providing telemedicine; related telemedicine software, for up to three years; and network components, software and computer hardware.
  • Small Rural Hospital Improvement Program: The SHIP program, managed by the Health and Human Services Department’s Health Resources and Services Administration, aims to help rural hospitals that have 49 beds or fewer meet value-based payment and care goals. The funding can cover costs for health IT hardware and software, and certain quality improvement trainings.

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While there is a lack of consistent state-level funding to support independent hospitals in their own communities, there is a growing recognition that more support is needed for these healthcare organizations to avoid exacerbating unequal access to care.

As independent hospitals tap into federal support, they should consider investments in networking, cybersecurity and virtual care. There could be more opportunities in the future for security-focused healthcare funding. Virtual care services are a major competitive advantage for traditional providers and can ultimately support overburdened staff.

This article is part of HealthTech’s MonITor blog series.


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