For over 73 years, North Arkansas Regional Medical Center has played a pivotal role in providing healthcare for our community, and we are commited to contnuing to serve our community for future generatons. Rural hospitals, like NARMC, are essental for delivering healthcare services to residents and contributng to the overall well-being of rural communites. Many hospitals, similar to NARMC have a significant impact on the economic growth of a community. NARMC is the second largest employer in Boone County.

Unfortunately, 30% of rural hospitals in the United States face the risk of closure, according to the Center for Healthcare Quality and Payment Reform. Since February 2023, there have been 42 hospitals that are closing departments or ending services according to Becker’s Hospital Review.

Hospitals across the naton are reducing services, ceasing operatons, and reducing staff in response to the current financial environment of the healthcare industry. The primary cause of these closures is inadequate payments from health insurance plans that fail to support essental services. The reimbursement provided to hospitals, has not increased to cover the cost of care with inflaton.

In a proactve effort, North Arkansas Regional Medical Center is implementng measures to bolster sustainable healthcare within the communites we serve. Rural hospitals are impacted by inflaton. For healthcare organizatons to remain healthy, we must address operatng expenses to cover inflaton in various areas. Below are a few examples of the inflaton that we have seen directly impact North Arkansas Regional Medical Center:

• Cybersecurity insurance: A 35% increase

• Addressing escalated Food Costs • Managing elevated Medicine Costs

• Coping with a 20% rise in Supply Costs

• Adaptng to a 15% increase in Labor Costs • Tackling persistent challenges in Health Insurance Costs

• Utlity cost over 10% higher than a year ago

Overall expenses are almost 3 tmes higher than the additonal revenues. Hospital and Clinic services are reimbursed based on contractual agreements with insurance companies and the hospital receives only a small percentage of the actual charges. Usually, the hospital receives less than 30% of the total charges. Many tmes, the insurance company is not reimbursing the hospital enough to cover the actual cost of providing the care.

The decision to reorganize areas of our healthcare delivery system has been a very thoughtul and deliberate process. The NARMC management team has been working on expense reducton and efficiency plans for over 18 months. These plans have allowed various services to remain in place, and allowed for significant growth in certain areas.

We have seen an increase in our total clinic volume of 12%, however, some clinics have seen a significant decline in volume. With those changes, we have made the difficult decision to combine those services areas. We are working with our patents and providers in the impacted areas to transiton care and we will ensure each patent has access to care in the NARMC system. For those who prefer not to travel, telemedicine services are also available. NARMC is commited to serving our communites, and we appreciate your support through these necessary transitons.

• Temporarily ceasing services for Center for Memory Mood and Thought (Inpatent Geriatric Behavioral Health Unit)

• Transitoning all urgent care services to The Med Plaza

• Closing two rural health clinics in Marshall, AR, and Lead Hill, AR. We are ensuring that every patent can stll receive care, either through our telemedicine services or by accessing other NARMC providers based in Harrison.

• Creatng efficiencies within the workforce, and resultng in an overall reducton of 3% in the workforce.

President and CEO Sammie Cribbs Roberson expressed, "This is a necessary organizatonal realignment to ensure future success and contnued growth. We extend genuine appreciaton for the dedicaton and contributons of our affected employees. Our commitment to providing support and assistance to individuals impacted by these changes remains unwavering during this challenging period."

Despite the challenges, NARMC is delighted to see an increase in patent visits across the organizaton. We know how important healthcare is to everyone in our community is and we are honored to be part of that. Healthcare services are the patent’s choice, and we thank each of you for choosing to support NARMC! NARMC is excited about the growth and remains focused on the future