Facing the Pressure: How Operational Assessments Help Rural and Community Hospitals Chart a Sustainable Path Forward

Operational assessments not only identify where a hospital stands in key performance areas, but it also examines how and why those conditions developed.

Aug. 13, 2025 | | By David Domingue, CHC SVP of Business Development

Community hospitals, especially those designated as Critical Access Hospitals (CAHs), are facing mounting pressures from multiple fronts. Workforce shortages, rising supply costs, aging infrastructure and changing reimbursement models all strain hospital operations. At the same time, the rapid growth of Medicare Advantage plans introduces new barriers to care and payment, adding to the financial uncertainty.

Medicare Advantage plans are now a dominant force in health care coverage, but for rural hospitals, the shift has brought significant challenges. According to the American Hospital Association, these plans frequently delay care, deny claims and impose burdensome prior authorization requirements, which result in longer hospital stays, increased administrative work and cash flow disruption. For hospitals already operating with limited margins, the strain is becoming unsustainable.

In this environment, hospital leaders must take proactive steps to assess their financial health, evaluate strategic options and develop a realistic plan for long-term viability. For many, the first step is an operational assessment.

A Roadmap to Improvement

An operational assessment provides a comprehensive view of hospital performance and lays the groundwork for a performance optimization plan. Conducted in collaboration with hospital leadership, the operational assessment identifies specific opportunities to decrease expenses, improve performance and enhance care delivery. It can also help inform critical decisions around potential partnerships, management support and other paths to stability.

Key areas of focus include:

Operations. With an estimated one-third of health care spending attributed to waste, operational assessments uncover inefficiencies that may be increasing costs without contributing to quality care. The goal is to streamline operations while maintaining or improving clinical outcomes.

Staffing. Labor costs remain a top concern. Assessments include productivity evaluations and workforce planning that consider recruitment, retention and provider alignment. Strategies to reduce turnover and reliance on contract labor are essential to cost control.

Supply chain. Rising costs and reimbursement delays make supply chain optimization more critical than ever. An assessment evaluates purchasing practices, vendor relationships and opportunities for group purchasing or standardization that can yield meaningful savings.

Revenue cycle and finance. Assessments evaluate the full revenue cycle, from contract negotiation to final collections. This includes analyzing charge capture, coding accuracy, billing efficiency and expense management. Identifying and correcting gaps in the revenue cycle can significantly improve cash flow.

Leadership. Effective leadership is vital during challenging times. Assessments examine governance, resource allocation, communication and planning to determine whether the current leadership model supports the hospital’s goals, and whether external partnership or interim support could be beneficial.

Information technology. Technology infrastructure must support both operations and care delivery. The assessment includes a review of clinical and financial IT systems, cybersecurity risks and interoperability issues. It also considers how technology investments can relieve pressure on staff and improve efficiency.

Strategy. Even hospitals focused on survival need a strategic plan. An assessment looks beyond day-to-day solvency and helps position the organization for future growth by identifying service lines with potential, evaluating market trends and considering partnership models that may strengthen long-term sustainability.

More Than a Diagnosis: A Plan for Action

CHC Consulting’s operational assessments begin with a thorough data review and stakeholder interviews to capture both quantitative and qualitative perspectives. This process not only identifies where the hospital stands in each performance area, but it also examines how and why those conditions developed.

The outcome is a tailored performance enhancement plan with realistic recommendations, financial projections and timelines. CHC collaborates with hospital leadership to align the plan with the hospital’s goals, culture and community needs.

Some hospitals choose to implement the recommendations independently, while others partner with CHC Consulting for ongoing support, interim leadership, or full management services. In either case, the operational assessment offers a clear path forward that is grounded in data, shaped by experience and focused on sustainability.