Rural hospital CEO thrives with for-profit approach, nonprofit mindset
Rural healthcare facilities across the U.S. are struggling to survive. Much of the funding they relied on for years is disappearing without a clear path forward, and the One Big Beautiful Bill Act threatens to further reduce directed payments for Medicaid beneficiaries.
As margins tighten, rural healthcare leaders are searching for innovative solutions and partnerships. Tom Vasko saw that need three years ago when he became CEO of 25-bed, Shattuck, Okla.-based Newman Memorial Hospital, and dove right in.
“I knew in order to rebirth the 105-year-old legend of Oklahoma, we needed to take a for-profit approach with a nonprofit mindset,” he told Becker’s. “This novel approach would position the organization for resistance, strain and ward off closure. Given the circumstances, we will become more aggressive with a sense of urgency, accuracy and competitiveness. Newman will continue to be progressive. We must continue to gain top line revenue creating the opportunity for higher levels of cash flow to remain liquid.”
If rural hospitals can remain profitable, they will be able to invest in service line growth and updated infrastructure. Mr. Vasko aims to invest every dollar of positive cash flow that comes in right away to make upgrades instead of waiting for the year’s end.
“We have to reinvest and buy clinics, buy real estate, and then there’s a ramp up period. That’s a big challenge right now with OB and labor and delivery,” he said. “It’s not about just turning on the lights; it’s a lot more complex than that. You typically ramp up and it’s a very intimate relationship between the patients and providers. There has to be some dollars behind that in order to compensate for a loss temporarily until you can start sharing a profit when your volumes get to where they need to be and reimbursement kicks in.”
Mr. Vasko sees the hospital’s partnership with boutique data analytics and AI firm as critical to success, and will focus on expanding its primary care footprint via partnerships and acquisitions. Those primary care physicians will help identify patients with advanced disease states who need specialty care, which Newman can offer.
“You have to be really attuned to your finances as well as really rely on your data and listen to your team to make sure that your leadership team is the right people,” he said. “Truly listen to their ideas and apply them, and give them autonomy to implement those ideas.”
One early success story has been Newman’s orthopedics practice. The practice takes a concierge approach to medicine, which reversed the outmigration of surgical patients. Now, the hospital draws patients from Oklahoma City – two-and-a-half hours away – to receive orthopedic surgery.
“This reversal approach has contributed to community benefit and driven local economic impact for our community business,” said Mr. Vasko. “In late 2025 and throughout 2026, Newman will advance its orthopedics practice partnering with nationally recognized surgeon Dr. Manish Patel from Virginia. Pioneers within orthopedics will draw national patronization to the small rural hospital.”
In the last four months, Newman has created a model of partnership and forged deep provider relationships to gain a strong referral base and ancillary revenue.
“We’ve added the opportunity to gain an uptick of 24,000 patients visits annually,” said Mr. Vasko. “We’ve launched two additional primary care clinics and a specialty clinic in continuous countries to capture the patient base and legitimize our presence and geographic footprint.”
The hospital is also investing in its brand and creating an omnichannel advertising strategy to attract more patients and finding new ways to improve the patient experience.
“We can’t just sit still in between our four walls and keep a chair warm,” he said during an interview with Becker’s Healthcare podcast. “We have to be transformational CEOs, and that’s what I’ve coined myself. I’m not a hospital CEO. I’m a transformational CEO that has to bring and drive change with innovation and novel ideas and create high functioning teams that feel welcome to bring ideas to the table to drive the organization forward.”
Newman faces big challenges over the next few years, with 18% of patients having Medicaid and 60% having Medicare. The hospital, which serves a county that has a 15.4% poverty rate, stands to lose money on both. Statewide, 97 hospitals in Oklahoma have negative operating margins and many are wringing their hands. Not Mr. Vasko.
“Simply sitting flat footed, remaining between four walls will result in certain death for any rural facility,” said Mr. Vasko. “Over the last three years, I’ve applied more private equity and for-profit tactics with respect to liquidity and growth than ever seen in a nonprofit environment. I’m grateful these strategies are prevalent in past experiences. It’s been the defining factor in our ability to exist.”