Colorado expected to broaden its support for rural hospitals


Boram Kim


A panel of Colorado’s rural healthcare leaders outlined policies and investment opportunities that can support the state’s rural hospital system on Wednesday during the Health Cabinet Affordability Summit, a virtual event led by the Department of Health Care Policy and Financing (HCPF).


Stay one step ahead. Join our email list for the latest news.



Colorado has prioritized rural hospital investment around transformation and innovation, particularly around telemedicine and investments. The Hospital Transformation Program (HTP), which ties provider fee-funded Medicaid payments to quality-based initiatives, has been working to redirect supplemental payments toward delivery model transformation regardless of payer coverage type. 

Nancy Dolson, HCPF special financing division director, said half of HTP’s $60 million Rural Support Fund has been invested in improving rural and critical access hospitals, including ongoing support for the administration of emerging payment methodologies.  

“The Office of eHealth Innovation is investing $17.4 million to connect rural providers to health information exchanges, which helps providers exchange information [and] improve patient care and outcomes,” Dolson said. “And additionally, the governor’s budget proposed $10 million in stimulus funding to support rural hospital access and affordability initiatives that was passed by the legislature and has been managed by HCPF and an advisory committee. And yesterday, we are pleased to release the application for rural hospitals to apply for the Rural Provider Access and Affordability Stimulus Grants.”

The Rural Provider Access and Affordability Stimulus Grant Program, which the legislature passed last session, will award $10 million to qualified rural hospitals toward improving healthcare access and affordability. The program offers rural hospitals the opportunity to apply for up to $650,000 in funding to improve areas such as health information technology. 

Michelle Mills, CEO of Colorado Rural Health Center, said many rural communities struggle with being able to afford, upgrade, and maintain electronic medical records and replace outdated medical equipment. 

“We have currently 16 rural hospitals of the 43 that are operating in the red right now, which is down from the 22 that existed last year,” Mills said.  But in large part that’s due to COVID funding that came in and we definitely understand that there’s this tsunami that is coming when COVID funds end.”

Mills said 75% of the funding for a rural hospital comes from their outpatient clinic, with an average daily inpatient census between one to three patients. 

Benjamin Anderson, vice president of rural health and hospitals at the Colorado Hospital Association (CHA), announced the launch of the association’s strategy for supporting rural healthcare delivery. CHA is centering the strategy around three approaches: rural advocacy for policy and long-term financial viability, collaborative capacity building, and transformational board leadership. 

Anderson said the association was taking a holistic view around strengthening rural hospitals by addressing board leadership diversity to more accurately reflect the communities the boards are serving. 

Kevin Stansbury, chair of CHA’s board and CEO of Lincoln Community Hospital in the rural city of Hugo, cited four issues leaders in rural and frontier health were faced with, which are finding ways to deliver essential services in the community, having adequate workforce to do so, maintaining the adequate profit margins to remain viable, and having access to capital. 

“It shouldn’t be a surprise to anybody that [rural and frontier] costs incrementally tend to be higher than those in the urbans,” Stansbury said. “We’re typically independent hospitals. We don’t have the bargaining power necessarily to negotiate with the drug companies or with medical equipment companies, and so what we’re working to do is to try to collaborate together to find innovative ways that we can look to improve quality, increase access, and bring the cost of healthcare down in rural settings.

While our cost—again, comparatively speaking as a percentage of our overall cost—may be higher for administrative, I would submit that our overall costs per patient discharge tend to be lower. There’s a lot that goes into that, but we’re very aware of those things and working really hard to find ways to reduce those costs.”