Are Rural Hospitals Better Off Because of Telehealth?

For the past few months, I’ve been writing quite a bit about the use of telehealth to fix rural healthcare. A few weeks ago, someone in my extended network posed a great question on LinkedIn:

"Are rural hospitals (critical access hospitals and 'Tweeners') better off financially as a result of telemedicine partnerships? Or are these partnerships driving down their CMI [Case Mix Index] by encouraging earlier triaging and transfers?"

Having spent the better part of 12 years immersed in implementing telehealth in rural areas and working with a variety of telemedicine service providers, this question prompted deeper reflection. 

Over the years I’ve witnessed firsthand how telehealth can both help and pose a threat to rural hospitals. While telemedicine offers tremendous benefits in terms of access to specialty care and improved patient outcomes, there are complexities involved in assessing its full impact, especially on hospital finances.

The Promise of Telehealth for Rural Hospitals

Telehealth is increasingly transforming healthcare delivery, especially in rural areas where access to specialty care is limited. Rural hospitals have long struggled with workforce capacity, attracting and retaining specialists, and maintaining financial sustainability. Telehealth can help alleviate these challenges, offering solutions ranging from emergency care to chronic disease management.

However, understanding the value of telehealth requires looking beyond surface-level metrics, such as technology adoption or reducing hospital transfers. A deeper dive is needed into different service models and their implications for rural healthcare systems.

To evaluate the impact of telehealth in rural hospitals, we need to consider various TeleSpecialist models, the timing of care in the patient’s episode of care, and the type of specialists that are accessed through telehealth.

TeleSpecialist Models: Rural hospitals have access to a range of telehealth specialists, but the model of telemedicine used varies. The three primary types are:

1. Virtual-only Specialists: These are telemedicine providers who offer consultations entirely through virtual means, without a physical presence in the area.
2. Hybrid Specialists: These clinicians may be working in a nearby health system or academic medical center or travel to the rural region periodically, combining virtual consultations with occasional in-person visits.
3. In-house hybrid specialists: Health systems with rural hospitals might employ specialists who work both in-person and virtually from home, providing an integrated solution that better supports the community and the specialists’ work-life balance.

Each of these models has a direct impact on care delivery, access, and continuity of care for rural patients.

Timing of Care in the Patient Episode: A key factor in understanding the impact of telehealth is when it’s utilized in a patient's care journey. Different stages of care require different approaches for leveraging telehealth:

• Pre-Treatment (e.g., Emergency Department triage): Telehealth allows rural EDs to triage patients more effectively, providing quick access to specialists who can guide the next steps in patient care.
• In-Treatment (e.g., Inpatient Care): Rural hospitals can offer more complex care, including critical care services, through telemedicine, helping to keep sicker patients in their local hospitals instead of transferring them out.
• Post-Treatment (e.g., Swing Beds, Rehab): After patients are transferred out for specialized care, telehealth enables rural hospitals to provide follow-up care, often through virtual visits, that improves recovery and prevents unnecessary readmissions.

Specialties Commonly Accessed via Telehealth: Rural hospitals may not always have the necessary specialists on-site, but telehealth gives them the ability to offer consultations across a range of specialties, such as:

• Critical Care (e.g., TeleTriage)
• Intensive Care (e.g., TeleICU, TeleSepsis)
• Neurology (e.g., TeleStroke)
• Psychiatry (e.g., TeleCrisis)
• Cardiology, Pulmonology, Nephrology, Rheumatology, etc.
• Rehabilitation services (e.g., TeleTherapy)

These specialties are critical to managing the complexity of rural patients’ needs, and telehealth allows for more timely and comprehensive care.

The Impact of Telehealth for Rural Hospitals

Telehealth doesn’t just change how rural hospitals operate — it transforms the very experience of care for patients and providers alike. From saving lives in the ER to ensuring patients don’t fall through the cracks after they’re discharged, telehealth is creating a new model of care in rural settings.

Pre-Treatment: Imagine a patient in a rural emergency department, suspected of having a stroke. Without telehealth, the patient might be rushed to a tertiary hospital hours away. But with TeleStroke, the local ED can consult a neurologist in real-time, making critical decisions faster and preventing unnecessary transport. This not only saves valuable time — it can save lives. 

Similarly, TeleTriage and TeleCrisis can help prevent unnecessary transfers to tertiary hospitals by offering expert guidance remotely.

In-Treatment: Rural hospitals often face the challenge of managing patients with complex, high-acuity conditions. Through telehealth, rural providers can consult with intensivists, pulmonologists, and other specialists in real time, improving their ability to manage critical care. This has the potential to keep more patients in the community and reduce the need for costly transfers to urban hospitals. 

Consider a rural hospital facing an influx of patients with severe sepsis. The on-site staff is under-resourced and thus overwhelmed. Through telehealth, an intensivist can jump in, assess the patient, and guide the local team with precise, real-time advice. This can prevent complications, save lives, and keep the patient in the community.

Post-Treatment:  A patient’s journey doesn’t end when they leave the hospital. For rural patients, follow-up visits can be a logistical nightmare. Telehealth offers a solution by enabling, for example, cardiologists to check in with patients virtually after heart surgery, ensuring recovery is on track without the stress of long-distance travel.

For patients who need to remain hospitalized, “virtual rounding” by the specialist is enabled by telehealth, as are options for TeleTherapy, ensuring additional rehabilitation services are available for patients recovering from surgeries, strokes, or injuries.

So, can rural hospitals really thrive with telehealth? The evidence shows that they can. By improving patient outcomes, expanding access to care, and even saving money in the long run, telehealth is more than just a tool—it’s a lifeline for rural healthcare.

Challenges to Consider

While the benefits are clear, it’s important to acknowledge the challenges. Rural hospitals must tackle infrastructure challenges, educate patients, motivate their staff, and navigate reimbursement. But when these obstacles are overcome, the rewards are well worth the effort.

Coordination: Telehealth workflows need to be seamless and well-integrated with existing hospital processes. Rural providers must ensure that telehealth consultations do not disrupt patient care or create bottlenecks in busy hospitals. In addition, some TeleSpecialty services require trained nurses to facilitate the in-person aspects of the virtual visit.

Financial Incentives: The financial incentives for rural hospitals to adopt telehealth are sometimes unclear. Telehealth services often come with additional operational costs, and reimbursement policies can vary. For example, some rural hospitals may struggle with low facility fees that barely cover their cost or additional co-pays that might discourage patients from using telehealth services.

Patient Education: Ensuring that patients understand the benefits of telehealth is essential to driving adoption. In some rural areas, patients may be unfamiliar with telemedicine, and building trust with these technologies will take time.

So, Are Rural Hospitals Better Off?

Given the above challenges and opportunities, the question of whether rural hospitals are better off because of telehealth is more complex than a simple "yes" or "no."

However, I believe the answer is clear: rural hospitals can absolutely be better off through telehealth, provided they adopt a comprehensive strategy that takes into account the needs of their patients and the unique challenges of rural care delivery.

Going back to the original LinkedIn post, the leading question is that rural hospitals may be missing out on patients that are transferred too quickly. Based on our experience with a number of Critical Access Hospitals and based on recent presentations by two rural-facing health systems in New Hampshire and Oklahoma, I don’t believe that to be the case.  Most rural hospitals transfer patients out because they cannot care for them adequately. And here, Telehealth can help.

"Telehealth offers rural hospitals an incredible opportunity to improve patient outcomes, expand access to specialists, and ensure sustainability. But success requires more than just adopting technology — it demands a thoughtful, coordinated approach that integrates telehealth into the entire care continuum. 

Are you ready to take the next step in your telehealth journey? Share your thoughts below or reach out to explore the value that telehealth can create for your rural hospital and your community.

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Christian Milaster and his team launch, expand, and grow Telehealth Programs for rural health centers, behavioral health agencies, health systems, schools, and libraries. Christian is the Founder and CEO of Ingenium Digital Health Advisors where his team and consortium of experts partner with healthcare leaders to enable the delivery of extraordinary care by accelerating the adoption of digital health innovation.

To explore how we can help your organization solve your challenges, contact Christian by phone or text at 657-464-3648, via email, or video chat.