Skilled nursing facilities (SNFs) are facing operational, clinical, and financial challenges like never before. Rural SNFs are facing these same challenges and others that are unique or exacerbated by their size and location. Solutions for the specific challenges of rural SNFs are available, including strategies that innovative providers are implementing now to address them head on.


Record lows in occupancy and profitability, combined with labor shortages across the country, are creating challenges for all long term and post-acute care providers. Rural SNFs face unique challenges, including:
  • Competition with critical access hospitals (CAHs) with Medicare swing beds and senior services. Forty-two percent of CAHs provide skilled care, and 25.4 percent of CAHs provide long term care services, according to Rural Health Information Hub.
  • Access to physician and other ancillary services, especially specialty services. The patient to primary care physician ratio per 100,000 people is 39.8 physicians in rural areas, compared with 53.3 physicians in urban areas, according to the National Rural Health Association.
  • Geographic isolation. While rural areas have a higher proportion of the 65 and over population, rural providers are often located in areas with few hospitals and a declining population, resulting in a decrease in referrals to skilled care.
  • Proximity to urban wages. In rural areas, prospective talent is often interested in, open to, and familiar with driving large distances to urban centers to find similar or other competitively waged positions.
  • Census decline. According to the U.S. Department of Agriculture, since the mid ’90s, growth rates in rural counties have been significantly lower than in urban counties.

Staffing Solutions

Rural providers must move beyond common labor strategies such as educational options, grants, and engagement programs such as employee support services, continuing education, and satisfaction programs. While these strategies are important and impactful, rural providers need to be more innovative to recruit and retain a qualified workforce. Other strategies include centralization models and shared staffing models.

Direct care hours have historically been adjusted for fluctuations in census and acuity but often management and leadership roles have not been adjusted, even though they are the most costly. Rural SNFs need to evaluate non-direct care roles in light of current size, service lines, and technological advancements to recreate a staffing model that meets both the operational and financial needs of the community. These changes not only reduce overall labor expense but also provide more resources for direct care.

Knowing the Options

If after role adjustments are made it is found that there is not a need for a full-time role in an area like the business office, human resources, or social services, options to ensure the completion of the tasks without a full-time, on-site resource should be considered. One option is to centralize functions to a home office or third party that can provide oversight to several communities with fewer resources than are more readily available in larger labor markets. Rural providers can also share resources through staffing and employment models where staff are shared, even between competitors.

Revenue Solutions

With decreasing occupancy and often flat reimbursement, providers need to secure new revenue sources. For rural providers this can include an expansion of services, not only in senior services, but more broadly to the community. Examples include event space rental, catering, outpatient services, and housing for non-senior medical needs.

While providers across the country are reducing length of stay, reducing readmissions, and improving quality, other members of the continuum or payers are reaping the benefits. Rural providers should look to partner with managed care providers or become one; they should also formally partner with hospitals and other at-risk payers to assist in the delivery of high-quality, lower-cost care, while benefitting financially from the savings they provide.

Different Partnerships

It is critical that rural SNFs partner in new ways. This includes partnering with other providers in the continuum and competitors. For hospitals, rural SNFs must look beyond their own local CAH to larger-market hospitals to create risk-sharing models where all parties take the risk, and reward, for better care.
There are also opportunities to partner with acute care providers in financial arrangements to put harder-to-place patients in communities with lower census.

It is critical that rural SNFs move beyond the stereotypes and challenges of rural medical quality and availability by partnering with ancillary service providers to ensure access to timely and effective services like pharmacy and rehabilitation. Through partnership and coordination, often with competitors, ancillary providers can increase availability to their services.

Rising to the Challenge

In these challenging times for rural SNFs where the option of having to close is often on the table, no ideas should be off the table. When it comes to partnering with competitors, options include sharing both direct care and leadership staff through staffing organizations, mergers, and marketing and negotiating together through provider groups. As an example, Minnesota’s CareChoice Cooperative was an early senior care group formed by nonprofit, mission-driven providers of aging services primarily for the purpose of contracting with managed care entities for skilled nursing services. CareChoice negotiates with the major health care systems in its region to be part of their network of nursing facilities for people needing short-term rehabilitation care.

Successful rural SNFs will rise to challenges they are facing to continue to provide care and employment to those in their community, partnering and operating in ways they had not imagined, even five years ago. Health care is local, and the solutions above provide rural SNFs with strategies to ensure there is the revenue and talent needed to continue rural health’s very essential, and very local, mission. ■
Erin Hennessey, MD, is a certified gerontologist with 20 years of experience in senior health care and chief executive officer for Health Dimensions Group. She can be reached at 763-225-8625 or