HJAR Nov/Dec 2025

HEALTHCARE JOURNAL OF ARKANSAS I  NOV / DEC 2025 45 first and most important factors. If the near- est alternate hospital is far away — typically more than 35 miles —maintaining some in- patient capacity locally becomes crucial. In such isolated areas, a CAH or small PPS hos- pital may be necessary to ensure residents are not left without access to essential care. This reality is especially evident in the Delta, where a single hospital often serves a wide geographic radius. If that facility provid- ed only emergency stabilization under the REHmodel or ceased inpatient services al- together, residents could be forced to travel long distances for admission or specialized care. Local officials have noted that sending patients and families hours away not only disrupts continuity but also imposes emo- tional and financial burdens that compound poor outcomes. Population size and hospital volume are also decisive. The average daily census, or number of inpatients, reveals whether in- patient care is justified. Hospitals averaging only a handful of inpatients per day may not need full-time inpatient units. Arkansas hospital leaders suggest that a facility con- sistently seeing fewer than five inpatients might benefit from the REH model. Extremely low volumes indicate that staff and resources devoted to inpatient care could be redirected toward outpatient and emergency services, where they would have greater impact. In these cases, converting to an REH can improve financial viability without significantly affecting access. Con- versely, hospitals with higher inpatient us- age or fluctuating seasonal demandmay still require the flexibility that inpatient beds of- fer — thus leaning toward CAH or PPS status. Another important consideration is the availability of critical services. Every com- munity has specific health needs that must influence designation decisions. Maternity care is a prime example. Several rural Ar- kansas hospitals have closed their labor and delivery units in recent years because of low birth volumes and high costs, while others have kept themopen despite financial strain because their communities depend on them. The REH designation, however, could threat- en such services due to its no-inpatient rule and 24-hour-stay limit. If a county has no other obstetric providers nearby, closing that unit or converting to REH status could lead to unsafe situations such as mothers deliver- ing en route to distant facilities. Therefore, in communities with ongoing need for ob- stetric, surgical, or other inpatient-intensive services, maintaining a CAH or PPS designa- tion may be the more responsible choice. Financial and staffing considerations also shape each decision. The hospital’s fiscal health and workforce capacity must sup- port whichever model is chosen. CAH and REH designations come with different reim- bursement structures that can either help or hinder operations. Cost-based reimburse- ment for CAHs can strengthen margins for low-volume inpatient care, while the subsi- dies for REHs can offset the loss of inpatient revenue. Yet both models require adjust- ments in staffing. An REHmight need fewer inpatient nurses and support staff, which could reduce local employment. Transpar- ent communication and robust community engagement are therefore vital to maintain- ing trust and ensuring that the transition aligns with local priorities and expectations. BUILDING A FOUNDATION FOR LONG-TERM SUSTAINABILITY To complement these operational issues, payment models must evolve to reward val- ue and stability rather than volume. Rural hospitals that invest in prevention, chronic disease management, and addressing social determinants of health should receive finan- cial recognition for these outcomes. Aligning reimbursement with prevention and innova- tion would sustain small hospitals, reduce avoidable emergency visits, and improve population health. This is especially impor- tant for facilities that shoulder the costs of standing ready around the clock even when volumes are low. At the same time, regulatory and payer alignment is key tomaintaining the integrity of Arkansas’s rural hospital network. Uni- versal recognition of CAH status across all payers would stabilize reimbursement and allow hospitals to plan long-term. Reducing administrative delays and red tape in CAH approval and renewal processes would fur- ther help hospitals access critical financial protections in a timely manner. Simplifying these procedures would allow administrators to focus their attention on community health, innovation, and work- force retention rather than navigating com- pliance hurdles. Infrastructure investment, both physical and digital, remains essential to sustaining access in rural Arkansas. Continued mod- ernization of facilities, broadband expan- sion, and telehealth integration will enhance care coordination and extend access to rural residents. Strategic public–private partner- ships and philanthropic support can amplify Camille Watson Senior Data and Evaluation Specialist and Executive Assistant Arkansas Rural Health Partnership