Holly McCormack, DNP, RN, serves as CEO of Cottage Hospital, a 35-bed independent, nonprofit critical access hospital in Woodsville, N.H. She is well-versed in the unique challenges rural hospitals face, particularly in recruitment and retention.
Dr. McCormack has led Cottage Hospital since April 2021, after previously serving as its chief nursing officer and director of inpatient services.
In a conversation with Becker's, Dr. McCormack highlighted the hospital's focus on fostering career growth through a leadership ladder and outlined plans to expand those efforts. She also shared insights on the hospital's capital investments, service expansions and community partnership strategies.
Editor's note: Responses were lightly edited for length and clarity.
Question: What do you expect to be the biggest financial challenge facing health systems in the coming year, and how are you preparing to address it?
Dr. Holly McCormack: The challenges for us that continue are around the workforce, but we do see a rise in our expenses overall. We've realized about a 40% increase in our total expenses if you compare that back to 2019 or 2020, so pre-pandemic time.
The workforce continues to be a struggle for us, and I think we have specific complications around being in a rural location — it's very hard to recruit to a rural location. The nursing shortage has really complicated the cost of what we pay for labor, and there are other associated factors, like a lack of housing in the area.
When we recruit to our area, it's not only about recruiting somebody; we also have to find a place for them to live, and that's been a specific challenge for us. It's not something that, as a small, independent hospital, we can take on by ourselves.
So we just need to focus on the things that we can control, and we realize there's not a silver bullet that's going to fix this. We have to try a lot of different things.
Around the workforce, we're looking at different options. For instance, we've started internal travel contracts with our per diem staff to control expenses and also control quality. Employing our own staff in these per diem contracts helps us to know and be familiar with the people who will be working for us, maintain a level of quality, and still meet the demands of the workforce.
The gig economy came about during the pandemic, and I think it's here to stay. We are working with other vendors — ShiftMed is one of the vendors we're working with — that can help us fill staffing gaps. This helps decrease burnout by providing relief to our current staff and plugs gaps where we may not need a long-term travel contract but still have open shifts that need coverage.
So I would say our biggest financial challenge is still the workforce, but there are plenty of other contributing factors as well.
Q: Given the current economic climate, how are you prioritizing capital investments for the upcoming year? In what specific areas do you see the highest ROI?
HM: We are undergoing an infrastructure project related to an upgrade of our aging plant. Our sewer system needed an update, but we took that opportunity to also make improvements to our inpatient unit. Our unit was built in 1960, so these improvements allow us to have a more modern facility, which I think is more attractive for people to work in — and obviously, more attractive for patients, too. It also provides a quieter environment. Our older facility had cinderblock walls, and noise traveled easily. We've been able to address that as part of this project.
On another front, we're trying to make investments in equipment and technologies to help retain our workforce, decrease burnout and increase retention. For example, we are currently evaluating artificial intelligence technologies. We have an AI steering committee to look at specific use cases and determine what we can do.
If we can't increase the workforce for a specific need, maybe there's a way to use technology to decrease the demands of that job. For instance, we're looking into ambient listening technology to help with transcription for our providers. Hopefully, that will reduce after-hours charting and weekend documentation, improve the quality of notes, and allow providers to focus more on face-to-face interactions with patients during visits.
Q: How is your M&A strategy evolving to support your organization's long-term goals, and how do you determine which acquisitions will add the most value to your health system both operationally and culturally?
HM: Being an independent, critical access hospital is a bit of a rare breed now. People used to say we were fiercely independent. I think now we say we're cautiously independent.
We're always evaluating to ensure it makes sense for the future of our hospital. Cottage Hospital is 121 years old, and we need to figure out how to be here for another 120 years for our community. We evaluate strategically to make sure we're in a stable standing for our community. Does it make sense to stay independent? Are we taking full advantage of partnerships?
At this point, we've prioritized strategic partnerships to help us provide services. For example, we work with an academic medical center for pathology and radiology, including after-hours radiology coverage. That makes the most sense for us right now — leveraging strategic partnerships rather than pursuing a full acquisition. It's something we're constantly evaluating.
Q: What strategic moves is your organization making to expand outpatient and ambulatory services, and how do you plan to balance this with maintaining inpatient care?
HM: We're coming off the tail end of a conversion with our electronic health record. We're getting our outpatient clinics back to pre-conversion volume, but after that, we're focusing on expanding services in other areas.
We have a 10-bed acute geropsychiatric unit, and our hope is to expand into outpatient services for geriatric psych. We're exploring potential partnerships to make that happen.
This makes sense for our community's demographics and addresses the behavioral health crisis in New Hampshire. It's something we see as critically important for patients transitioning out of our inpatient unit. Having an outpatient option would provide an essential step-down service.
Q: What specific strategies will your health system deploy in the coming year to improve employee retention, particularly in critical front-line roles?
HM: We're doing a lot to build relationships with potential future staff early on. For instance, we work with local high schools to offer healthcare experiences — not just clinical roles, but also areas like IT, medical records and coding.
If you say "coding" to a 17-year-old, they'll probably think of something entirely different than healthcare. So we make sure they're aware of these roles and the opportunities available in healthcare.
We also have strong partnerships with local nursing programs. Having nursing students do internships with us gives us the chance to get to know them, and they get to know us. It helps build a relationship before they're even employees, so they feel this is a place where they can grow.
Internally, we're restructuring our nursing leadership hierarchy to create more entry-level leadership opportunities. We've had the same director-level positions for years, but it's been difficult for staff nurses to step into those roles. Creating a leadership ladder allows for growth and succession planning, which is critical for retention.
We also focus on cross-training and matching employees to roles that align with their interests. For example, if a nurse wants to specialize in surgery, we invest in extended orientation and training to help them achieve that goal.
We've always emphasized "growing our own" staff at Cottage Hospital. It's a concept that's gained buzz recently, but we've been doing it for years. I started here as an inpatient director before becoming CNO and then CEO. Our CFO started as an accountant.
We've also worked with local high schools to create a licensed nursing assistant program. We've graduated several cohorts of nursing assistants, and it's a great way to develop relationships with students early on. We can offer them positions when they finish, and hopefully inspire them to continue their journey into LPN or RN programs.
We're also evaluating the market to see what service lines we can bring to our community to address existing voids. We want to ensure our older population has access to the care they need here.
Q: How are strategic partnerships with community organizations and other healthcare institutions shaping your efforts to address key challenges within your health system and drive long-term success?
HM: Particularly in a rural setting like ours, it's important to support one another. For example, there's a federally qualified health center right across the street from us. It's a great partnership opportunity. We provide ancillary services they may need, and they serve as a referral center for our patients upon discharge if they choose not to use our rural health center.
We're also collaborating with another critical access hospital in northern New Hampshire to conduct our community health needs assessment. It makes sense to partner because we're serving overlapping demographics. It reduces costs and ensures we're meeting shared community needs.
We also rely on external partners for staffing and recruitment. Vendors and schools are vital partners for us — whether high schools or colleges. These relationships are essential for recruitment and retention.