Friend, Nebraska – In a small town where access to critical healthcare is a lifeline, Warren Memorial Hospital faced a financial crisis that pushed it to the brink of closure. The hospital, located in Friend, Nebraska, found itself grappling with a budget stretched to its limits. CEO and CFO Jared Chaffin recognized the severity of the situation last spring and quickly alerted hospital leaders and board members.
“The numbers were troubling,” Chaffin said. “When you’re only able to make payroll and can’t pay your vendors, it’s clear you’re in serious trouble.”
The financial strain was largely due to delayed insurance reimbursements. As the hospital’s cash flow dwindled, the leadership team scrambled to keep the staff paid and the doors open. Chaffin described the critical moment: “We were hours away from missing payroll. We had reimbursement money that hadn’t come in, and time had finally caught up with us.”
Facing this financial precipice, the hospital made a pivotal decision. They applied to transition from a critical access hospital to a rural emergency hospital (REH), a new designation introduced to support rural healthcare facilities. The move would mean losing inpatient services but would preserve the emergency department, a crucial resource for the community.
“Becoming an REH was our lifeline,” Chaffin explained. “Without it, people in and around Friend would have to drive at least 30 minutes to access emergency care—time that could be the difference between life and death.”
Rural emergency hospitals operate on a fixed annual budget of $3.2 million provided by the federal government, with additional revenue generated through outpatient services. Chaffin emphasized the importance of expanding these services to ensure financial stability. “We’ve been able to focus on outpatient services and try to grow them,” he said.
The designation as a rural emergency hospital is rare, with fewer than 30 facilities nationwide. In Nebraska, only six out of 64 eligible hospitals would benefit from making the transition, according to Jed Hansen, executive director of the Nebraska Rural Hospital Association.
“There are many factors to consider, including what the medical staff and the community want,” Hansen noted. “But financially, about 10% of the state’s rural hospitals would likely benefit from converting to an REH.”
For the nursing staff at Warren Memorial, the transition to a rural emergency hospital has required significant adaptation. Amy Thimm, the hospital’s chief clinical and operating officer, described the shift as a new type of healthcare. “It’s a different type of nursing,” Thimm said. “We’re all still getting used to it.”
During the transition, the city of Friend provided emergency funding to keep the hospital afloat. The decision to allocate funds was not made lightly, according to Friend’s mayor, Jewels Knoke. The city had to weigh the needs of the hospital against other community priorities.
“It was a tough decision,” Knoke said. “Do we use money intended for infrastructure and other long-standing community needs to support the hospital? In the end, we decided to stop the bleeding and keep the hospital’s doors open. Without it, lives were at stake.”
Without inpatient services, the community now relies heavily on the emergency department and outpatient clinics. However, filling the schedules of specialists who travel to Friend remains a challenge. General surgeon Caleb Schroeder, who commutes from Hastings, understands the sacrifices rural Nebraskans make to access healthcare.
“People in rural areas have to work around their schedules to fit in healthcare,” Schroeder said. “When I commit to coming to Friend, I know there will be days when there’s only one patient, and other days when there are ten. But we’re all committed to providing the care our patients need.”
Balancing financial sustainability with patient care is an ongoing challenge, but the transition to an REH has provided Warren Memorial Hospital with a new path forward. Chaffin remains optimistic about the future.
“I’d love to stop treading water and start swimming,” Chaffin said. “We’re on our way, but there’s still a lot to do. Every day is a new challenge, but we’ve come so far from where we were a year ago.”
With plans to renovate the operating room and expand outpatient services, hospital leaders are determined to bring high-quality healthcare to small-town Nebraska. The transition to a rural emergency hospital has not only secured the future of Warren Memorial but also ensured that the people of Friend and surrounding communities have access to the critical care they need.
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