How and Why This Rural Hospital CEO Taps Into Public's 'Buy Local' Sensibility

The top executive of Grande Ronde Hospital and Clinics hosts monthly breakfasts with community leaders to build rapport and demystify the institution in the public's eyes.

The fact that rural hospitals are especially vulnerable to the healthcare industry's shifting market dynamics is nothing new.

Policymakers have been tracking rural hospital closures for more than 30 years, as the rate of closures slowed in the late 1990s and early 2000s then accelerated again in the past decade, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina–Chapel Hill.

At least 118 rural hospitals have closed since 2010, according to data compiled by the Sheps Center. That includes at least 17 closures thus far in 2019, with more than two months to go before the end of the year.

But, in addition to the financial pressures of the past decade, there could be new competitive pressures on the horizon, as large retailers reach for a piece of the market for lower-acuity healthcare services.

Walmart last month opened a health center prototype in Dallas, Georgia—a city of 13,000 residents in a county of 164,000 residents, according to U.S. Census Bureau estimates—where the superstore will provide primary care, counseling, and other services, with the goal of perfecting a model to replicate elsewhere. The company said it already has plans to open a second site early next year in nearby Calhoun, Georgia, a city with 16,000 residents in a county of about 58,000 residents.

While some have described Walmart's health centers as a potentially positive development for rural health, it remains unclear what impact the retailer's health centers will have on the incumbent provider organizations that currently serve these rural communities.

In the face of that uncertainty, rural healthcare leaders are employing a variety of tactics to reinforce the long-term viability of the organizations they oversee. Some are linking arms with larger systems through mergers and acquisitions. Some are focusing on service lines that will differentiate them from potential competitors. And some are trotting out a tactic that works in concert with any other defensive strategy: consciously building affinity within the local market.

Jeremy P. Davis, MHA, president and CEO of Grande Ronde Hospital and Clinics (GRH) in La Grande, Oregon, said he has been working to deepen his organization's ties to the local community, fostering a sense of loyalty that could come in handy if an outside competitor were to attempt to intermediate GRH's patient relationships.

To that end, Davis has hosted a monthly "key leaders breakfast" for community leaders at GRH's flagship facility, a 25-bed critical access hospital in a county with fewer than 27,000 residents. The event for 15–20 guests has drawn mayors, representatives, fire chiefs, school teachers, business leaders, and others, he said. He usually introduces a physician or two to those who attend.

Davis, who took the helm at GRH late last year after serving as CEO of a critical access hospital in Wyoming, said he launched the monthly breakfast initiative by asking GRH staff to recommend names of people who should attend. That generated a list of 60–70 names. Davis keeps adding to that list by asking each round of participants to recommend future attendees.

More than 110 people have attended the events during the first seven months, beginning last February, Davis said.

The practice helps to demystify the hospital in the mind of community members, to make the institution familiar to those it serves, he said.

"I'm talking about cost, quality, or access, some of the things happening on a national stage," he said during a recent HealthLeaders CEO Exchange gathering.

"Consequently, I'm really promoting the hospital to the community over and over again, so that way when the time does come where we have some threat, I've hopefully built support," he added.

While GRH aims to earn the community's support by offering quality services at affordable prices, Davis said he sees a benefit in consciously planting the seeds of appreciation and rapport in the minds of local leaders.

"If they want our community to be successful, it's that 'buy local' mentality," he said, noting that GRH represents nearly 5% of the local workforce.

Critical access hospitals are often an economic engine for their communities and are sometimes among few large employers, making their partnerships with local stakeholders especially important, according to the National Rural Health Association.

But the need to lead both internally and externally—to win support not only from your employees but from the relevant public as well—exists regardless of whether you're running a small hospital, mid-sized health system, or massive academic medical center with thousands of employees.

The type of affinity-building exercise that Davis has employed at GRH may look different at a larger organization in a more-populous community, but the core principle translates. If policymakers and business leaders view the long-term success and viability of a healthcare organization as aligned and intertwined with that of the broader community, then outside competitors may have a tougher time interloping.

This defensive tactic can't replace the basic responsibility to provide the right care at the right place, time, and price. But investing proactively in community relationships just might help to smooth over a rough patch later on.

Related: Staying Power: How CEOs Can Lead Through Uncertainty

The HealthLeaders CEO Exchange annually gathers leading hospital and health system CEOs for a custom dialogue on only the critical issues facing the future of their organizations. The 2019 event was held September 25–27 in Park City, Utah. For more information on this and future events, please email exchange@healthleadersmedia.com.