Federal Program Gives Rural Hospitals CPR

September 27, 2004 -- Posted at 5:39 p.m. CDT

WALNUT RIDGE -- Financial survival can be a real challenge for hospitals, especially if it's in a rural area. Rural hospitals tend to treat a larger proportion of older patients who rely on medicare, which makes medicare reimbursement critical for rural hospitals.

Twenty-one rural hospitals in Arkansas receive money from the government through the "Critical Access" program. The program reimburses rural hospitals the full cost for treating medicare patients. Without the program most of these hospitals would be in the red, because sometimes the medicare reimbursement is not enough.

"If you have large volume then financially you can survive, but for the small facilities that don't have large volumes then sometimes the money you collect are much less that what it cost you to operate," said Sandy Sullins with Lawrence Memorial Hospital.

The program has turned the financial situation at Lawrence Memorial Hospital in Walnut Ridge around.

"We've been able to be more competitive with salaries."

Funding has allowed management at Lawrence Memorial to carry out strategic plans instead of just talking about them. They've done so well that they've won a top leadership award from Health Leaders magazine. The medical staff also purchased new equipment and they're expanding their building.