Rural hospital masters what many large hospitals have not
National Rural Health Association | Rural Health Voices
Author: Angela Shultis | Monday, Jun. 24, 2019
In 2002, Meeker Memorial Hospital in Litchfield, Minn. – population 6,500 – was at risk of joining the growing number of rural hospitals in the U.S. unable to maintain positive profit margins. Eighty-one rural hospitals closed between 2010 and August 2017, according to University of North Carolina’s Cecil G. Sheps Center for Health Services Research, and many others are vulnerable. About 41 percent of rural facilities operated with negative margins in 2016, a Chartis Group and iVantage study of 2,100 hospitals revealed. Hospital closures in small towns like Litchfield mean patients lose access to their closest emergency room, and local economies suffer devastating blows.
A single phone call may have changed Litchfield’s fate. A hospital board member called Mark Madden, an old friend who had grown up in the small community. He knew Madden had become a search consultant, helping health care organizations find qualified executives to fill vacant leadership roles. Madden, whose 86-year-old mother still lives in Litchfield, happily accepted the challenge.
Battling the currents of health care change
Meeker Memorial was a century-old pillar of the community Madden loved, but for nearly a decade the facility had weathered shrinking health care margins. As a result, certain structures, equipment, and technology required modernization, and the small facility was unable to accommodate additional patient volume. These factors, among others, hampered both patient and physician attraction.
Madden’s first priority was to meet with the hospital’s board members, physicians, and direct reports to understand what it would take to turn things around.
“Mark had a way of getting to the heart of things and really helped us hone in on the precise competencies and profile we needed in our next CEO,” says former Meeker Memorial Board Member Mike Huberty, who worked with Madden on subsequent searches.
A pivotal moment in Meeker Memorial’s journey
It was time for Meeker Memorial to make some big changes. The hospital was on the verge of losing money, the board had developed a strained relationship with the exiting CEO, and relationships with local providers were poor. Madden set out to find qualified leadership candidates and educate the board on how they would need to change their working relationship with the incumbent, if he or she were to be successful.
The priority was to identify health care leaders with the following attributes:
- A firm grasp on the future of health care and a vision for how Meeker Memorial could develop a strategy to provide the community with high-quality, sustainable care.
- The ability to collaborate with board members, government and community leaders, physicians, and the greater medical community on a common vision.
- Strong financial and operational experience to ensure financial viability.
In May 2002, Mike Schramm was hired as CEO. He had turned around a smaller hospital and clinic system in Sibley County, Minn., about 50 miles from Litchfield. Meeker Memorial was a larger hospital with a strong medical staff, which appealed to Schramm.
“Mark has very good political instincts, he had a good read on the operational challenges, and his insights prepared me well for the role,” Schramm says of his experience working with Madden. “I knew exactly what I was getting into, which is a tremendous benefit when you’re entering a new organization.”
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