Challenge
In 2003, 25-bed Fairview Hospital transitioned to a Critical Access Hospital (CAH), marking a pivotal moment in its financial and operational structure. The shift from a Prospective Payment System (PPS) to a cost-based reimbursement model introduced significant challenges. Leadership recognized the need for expert guidance to navigate this new landscape, maximize reimbursement opportunities, and build a sustainable operational framework.
Massachusetts’s rigorous quality and patient safety regulations also required Fairview to maintain high performance across key clinical metrics. Benchmarking against larger institutions posed difficulties, making employee engagement and patient experience critical differentiators.
Process
Fairview Hospital engaged Stroudwater Associates to explore and improve financial and operational efficiencies. Stroudwater’s extensive experience in rural healthcare and the collaborative approach to the project ensured that hospital leadership was actively involved in the process, creating an environment where solutions were clear, actionable, and sustainable for long-term success.
Key aspects of Stroudwater’s approach included:
- Cost Report Optimization: Stroudwater’s detailed analysis of cost reports helped identify discrepancies and opportunities for maximizing reimbursement, ensuring financial sustainability.
- Operational Efficiency Analysis: Engaging leadership, department managers, and frontline staff, Stroudwater facilitated a holistic review of hospital operations to align financial and quality goals while promoting continuous improvement.
- Prioritization & Strategic Planning: Fairview’s management team collaborated with Stroudwater to develop a structured, prioritized list of improvement initiatives, securing buy-in at all levels.
- Employee & Patient Engagement Strategy: Stroudwater recognized Fairview’s focus on culture and worked to enhance workforce morale and patient experience metrics.
Results
Through this partnership, Fairview Hospital achieved measurable financial and operational improvements as follows:
- Financial Impact:
- Implemented reimbursement optimizations that resulted in millions in financial returns.
- Identified adjustments in maternity services and emergency room standby time, generating recurring annual savings of $700,000+.
- Helped advocate for legislative changes in Massachusetts, securing $2.6 million annually for the state’s three CAHs through Medicaid reimbursement reforms.
- Operational & Cultural Advancements:
- Developed a strategic roadmap that leadership and management actively used for ongoing improvement.
- Strengthened departmental leadership and staff engagement, fostering a culture of shared ownership in hospital performance.
- Maintained Fairview’s ranking as one of the nation’s top 10–20 small hospitals and #1 in patient experience in Massachusetts for 11 out of 13 years.
Impact
The collaboration between Fairview Hospital and Stroudwater Associates demonstrates how expert guidance and strong teamwork can drive financial sustainability and cultural transformation. By integrating financial insights with a commitment to employee and patient engagement, Fairview continues to serve as a model for rural healthcare excellence.
Fairview’s leadership emphasized the value of Stroudwater’s approach, noting that their process not only identified financial opportunities but also empowered hospital leadership with knowledge and practicable insights.
“Stroudwater never came in as a critic. Instead, they worked with us, encouraged us, and guided us through key opportunities. Their approach built trust and collaboration, ensuring that our team felt supported rather than overwhelmed. Their deep understanding of rural healthcare made their recommendations practical and relevant, and we continue to see the value of their insights years later.” — Tony Rinaldi, Former Fairview Hospital Executive
Looking Ahead
Fairview Hospital remains committed to continuous improvement, leveraging its strong foundation to navigate the evolving healthcare landscape. With a structured approach to financial and operational planning, the hospital continues to adapt to the needs of its community while maintaining excellence in care delivery.
