Why "margin per patient" falls short in rural settings
In many health systems, a key financial metric is the margin per patient – essentially, the profit (or loss) made on each patient encounter. While optimizing per-patient margin can make sense in high-volume urban hospitals or elective service lines, this approach doesn't work well in the rural context. Rural hospitals cannot cherry-pick patients or services based on profitability; as the sole providers in their respective areas, they must serve everyone – emergency cases, chronically ill patients, Medicaid, and uninsured individuals – regardless of the slim or negative margin those encounters might bring.

If a rural hospital tried to maximize the margin per patient in the traditional way, it would be forced to cut essential services or turn away many community members, undermining its mission and reducing access in an already underserved area. This misguided strategy results in "care deserts," diminishing healthcare accessibility and destabilizing rural economies. Instead, rural healthcare demands a shift toward viewing financial sustainability through the lens of overall health system revenue margin.
Patient-first financing: Shifting to system-wide financial sustainability
One of the most promising strategies to improve overall revenue and community health in rural settings is to adopt patient-centric financing solutions, making it easier for patients to pay for care without financial distress. Unlike per-patient margins, system-wide revenue margins prioritize long-term community health outcomes and financial stability. This broader approach encourages investment in preventive and routine care, reducing costly emergency interventions and improving patient engagement and health outcomes.

A patient-first financing approach flips the script from the conventional "treat then bill (and chase)" model to a proactive model of "plan and pay" at the outset of care. In practice, this means offering patients financing options when scheduling their appointments or procedures tailored to their ability to pay. Rather than waiting until after a service is provided and hoping the patient can pay the lump sum (or sending them to collections when they can't) or demanding a $1,000 deductible at check-in, the hospital helps arrange an affordable payment plan or loan before care is delivered.

This doesn’t mean rural healthcare systems need to become banks. From ensuring fair terms and compliance to dealing with the countless variety of associated tasks, managing in-house payment plans can be time-consuming, complex, and costly. Fortunately, modern financing models are evolving. Just as retailers offer consumers 0% interest installment plans while receiving full payment upfront, healthcare providers can offer patients similar financing through third-party partners.

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