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One of the most challenging businesses to run in America is a hospital. It is one of the most complex business models ever devised by man, said Peter Drucker, and it takes a special type of leader to run one, and run it well.

trustWhen it comes to the complexity and which size hospital – regional medical center versus small, rural hospital – is more difficult to lead, I take a contrarian view; I side with the small hospital.

I begin my defense of this conviction with the old adage that cash flow covers a multitude of sins. In large hospitals, mistakes, even big ones, typically can be covered by cash flow. In small hospitals, mistakes frequently show up on the profit-loss statement. But there is a far bigger, more serious challenge that small hospital CEOs must deal with, a challenge that will affect their very survival. Unfortunately, it is not as high on their priority list as are the various federal waiver programs and the future of Medicaid and Medicare reimbursement.

What is that overlooked challenge? Community trust — gaining it and sustaining it. It is the equivalent to the manufacturing quality of an automobile. Once lost, it is very hard to regain.

Without community trust, small and rural hospitals are destined to fail. That is why it must be one of the most important strategic initiatives that a CEO focuses on every day. As I wrote on Monday, I am not a big believer in adding too many “Chief” titles to the senior leadership team. But this function is critical. The CEO must function as the chief trust officer.

How you build the trust will vary from community to community but here are five important pillars of a critical partnership that must be a part of every plan:

  1. Physicians must buy in. Without physician partners, without their understanding that they play a critical role in a hospital’s trust plan, you cannot succeed.  Aligning professional and financial interests in support of the local healthcare delivery system is critical.
  2. Board members must agree with the concept and embrace it with a passion. If you have board members who are ambivalent, that is a serious drawback.
  3. Community stakeholders, including civic and political leaders, must also be active partners in the plan. They are key to creating peer pressure to encourage trust and support – to promote a community culture that emphasizes using healthcare resources whenever possible, versus driving to the larger regional medical center in a larger city.
  4. Vendors must also come to the table. The small and rural hospitals can no longer sit back and allow their vendor relationships to be a one-way street.   There are companies which recognize that their role must change and are moving to enhance their relationships. These companies must be willing to support your hospital in other ways that will foster public trust.
  5. Regional healthcare partners, like medical supply vendors, cannot look at their relationship with the rural community hospitals in their area as a one-way street. The small community hospital, with the support of its local partners, must set the terms for the relationship. They must insist that their regional tertiary hospital(s) care comes to the table with structured agreements that will respect the local medical staff’s gatekeeper role, and to help protect the small community hospital’s patient base. Outmigration of primary care patients is a cancer that threatens all smaller community hospitals. It is frequently driven by a lack of trust in the local healthcare resources.