Time for ‘Novel Ideals’: Rural Health Leaders Share Strategies Amid Budget Constraints

Innovation is at the forefront for the organization. In 2024, it opened the Sanford Virtual Care Center as part of a $350 million virtual care initiative. The 60,000-square-foot facility offers virtual clinical services, caregiver education and a space dedicated to technological innovation. Today, Sanford Health clinicians and vendor partners at the center are collaborating to develop tools enabled with artificial intelligence to enhance care delivery, while medical students and veteran clinicians are learning to provide high-quality virtual care through simulations that leverage augmented and virtual reality technology.

Two-thirds of all Sanford Health patients who use virtual care live more than 30 miles away from any of the organization’s hubs, Newman notes. The organization uses a hybrid care model to make it easier for patients to access care.

Take, for instance, another longtime patient with Type 1 diabetes. For almost 20 years, Newman says, she drove more than an hour each way for each of her four annual appointments. Today, she simply walks across the street from her home to a local brick-and-mortar satellite clinic in Lidgerwood, N.D., and because she’s not comfortable using technology, the staff help her access her patient portal.

From there, Newman leads a video visit, talking with his patient about everything from her grandkids to the blood sugar data from her Wi-Fi-connected insulin pump.

“It’s the same care she’s always had,” he says. “The only difference is now it’s even better because it’s a better experience for her.”

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A Matter of Survival for Rural Hospitals

A third of rural hospitals are at risk of closing due to serious financial problems, according to the Center for Healthcare Quality and Payment Reform, mainly tied to imbalanced reimbursements. Some experts think the new $50 billion Rural Health Transformation Program (RHTP) could provide hospitals a lifeline, but with looming federal cuts to state Medicaid programs adding pressure to existing budgetary uncertainties, they acknowledge it could be an uphill battle for many.

A growing number of rural health systems are following strategies like Sanford Health’s to survive: They’re evolving by adopting new digital tools that improve patient care while driving operational efficiency.

“The big question for a lot of these hospitals is how to improve access,” says Dan Shane, associate professor at the University of Iowa’s RUPRI Center for Rural Health Policy Analysis. “And the answer for many has been to rely more on telehealth, especially when it comes to providing specialty services, and to use technologies that allow them to be more productive.”

For some, that includes solutions such as ambient clinical documentation tools and software designed to automate tasks such as coding and claims processing, Shane says. It could also mean investing in an interoperable electronic health records system or in platforms that improve cyber resilience.

“I think the view of most health IT practitioners at this point is that the health infrastructure writ large is completely dependent on having a robust technological infrastructure and backbone,” says Scott McEachern, CIO at Southern Coos Hospital and Health Center. “It’s gone from being a ‘nice-to-have’ to essential, like having a good roof on your building.”

Based in Bandon, Ore., Southern Coos serves a rural community of about 12,000, and includes a primary care clinic and a 21-bed critical access hospital. A participant in Microsoft’s Rural Health Resilience Program, the organization is currently evaluating AI tools intended to boost efficiency in revenue cycle management and help staff deal with administrative tasks such as medical records requests.

The hospital recently established a committee of stakeholders with expertise in data and AI governance and, heeding its guidance, is testing solutions on specific use cases before moving ahead with full implementation.

“Our hypothesis is that, by using these tools, people will be able to shift their focus to more patient-facing care,” McEachern says. “That could be clinical care or it could be helping people with their bills or helping them navigate Medicare and Medicaid regulations.”

Southern Coos is also working with the Oregon Health Authority and rural hospitals across the state to determine how best to allocate the $197 million that Oregon has been awarded through the RHTP, McEachern says. One idea under consideration involves investing in a shared EHR for hospitals on the southern Oregon coast. A shared cybersecurity model is also on the table, primarily for the cost savings the approach could provide.

“We’re very remote here, and yet all of the critical access hospitals in the region have remained independent,” he says. “We really need to collaborate more, or there’s a possibility that we may not survive.”

Rural Healthcare Providers Prepare for an Uncertain Future

Developing a strategy to ensure long-term viability is also a priority for the leadership team at Bingham Healthcare. A nonprofit health system centered on a critical access hospital in Blackfoot, Idaho, the organization includes 23 clinical locations across the state’s eastern region.

Like others, Bingham Healthcare is constantly wrestling with its bottom line as it looks to implement much-needed upgrades. Up until the end of 2025, it benefitted from participation in a state-funded program that rewarded organizations for providing value-based care. That initiative was eliminated by the state legislature “with a stroke of a pen,” notes Chief Nursing Officer Holly Davis. The Medicaid cuts came soon after, leaving the organization in a tight spot.

“So, now, what are we supposed do?” Davis asks. “Where do we get the capital to stay current?”

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The RHTP is one possible answer, but as in Oregon, it’s still unclear how the program’s funds will be distributed. Bingham Healthcare’s modernization wish list spans everything from making its pharmacy more tech-enabled to new bedside monitors, cybersecurity tools and virtual care capabilities, Davis says.

Funds could also go toward the infrastructure required to support the organization’s population health program, a highly successful initiative that leverages patient data from the EHR to identify care gaps and develop targeted interventions.

Davis, who leads that program, says her approach for now will be to forge ahead in the way that she always has. She’s focused on leveraging population health strategies to improve patient outcomes and control costs.

She’s also preparing for the future by hiring new staff who are “digitally savvy and tech-forward.” Rural healthcare organizations like hers will survive through innovation, and individual and team effort, she adds.

“You can have the fanciest systems and the best tools, but to be successful, you need to have people who are willing and able to use them,” Davis says.