Nurseries on the west coast where root rot is not too much of a problem, use fir bark particles to root and grow cuttings. They sell the plants in fir bark with no soil. Pine bark is alleged to work as well.

There are 4 things that contribute to rhododendron demise due to Phytophthora root rot:

1) the pathogen must be present, but it usually is. You can buy disease-free plants and use a sterile medium to plant in.
2) moist conditions must exist. Provide excellent drainage.
3) warm temperatures must exist, and hot is ideal. Keep the root zone cool with mulch and partial shade.
4) the rhododendron variety or species must be susceptible to Phytophthora. Use a resistant variety or species. According to Clemson University, the rhododendron hybrids: Caroline, Martha Isaacson, Professor Hugo de Vries and Red Head are considered resistant and the rhododendron species: R. davidsonianum, R. delavayi, R. glomerulatum, R. hyperythrum, R. lapponicum, R. poukhanense, R. pseudochrysanthum, R. quinquefolium, and R. websterianum are resistant.

An aggravating factor is planting too deeply in the soil.

The North Carolina extension service recommends:

Set root-rot susceptible plants in raised beds and thoroughly mix a porous material such as bark (not sawdust or peat) into the bed. The material should be incorporated to a depth of 8-12 inches. In some areas drain tile and gravel placed 6-12 inches below the surface may also help reduce excess soil moisture.

All newly planted rhododendrons should be watched closely for symptoms, and infected plants or prunings should be removed promptly.

Planting directly into soft wood bark works just fine everywhere. I've been doing this for 25+ years with excellent results. In hot areas - especially those with hot night temperatures - bark is probably the best of all planting media because of its anti-fungal properties. Don't use very fine bark, though. The size often sold as "mini nuggets" is about right. The very fine material does not provide the aeration rhododendrons require. If the bark is partially composted or aged, all the better, but I've never seen a nitrogen depletion problem with fresh bark. Don't be tempted to use wood chips. Even if they're from soft woods, they will not work.

John Doppel of the Lehigh Valley area here in Pennsylvania is a very successful hybridizer and plantsman specializing in Rhododendrons. He lives near a mill that makes wooden spoons, forks, knives, etc. He has an endless supply of saw dust from the mill. He plants all of his rhododendrons and azaleas in saw dust and has no problems at all except he has to use an egg spray to keep deer away, but that is unrelated.

I know that as saw dust decomposes it can form a gooey mess and the Rhododendron Species Foundation discovered that the hard way. But John has found a way to use saw dust successfully. It may partly be due to the mix of woods they use. I believe they are all "hard woods". He doesn't have to add nitrogen and his plants are all very healthy.

How does the bark anchor the plant??? My mulch is washed away with the rain.

Yeah how does bark anchor the plant? also will pine straw work? and BTW thanks to all that commented!

No, pine straw will not work.

And the bark particles are fine textured, not like the nuggets used for mulch, but a lot larger than sawdust. Conifer bark has been the primary ingredient in woody container mixes for many dozens of years. Its terrific texture allows for rapid root development. They are typically called pine bark fines and can sometimes be difficult to locate in some parts of the country.

We don't experience the nitrogen depletion with BARK products, as opposed to wood. Wood and bark are very different from each other. Wood will decompose fairly rapidly while the bark pieces are very long lasting. Bark fines, and very few other ingredients are what I have been using as my container medium for many years.

Rhodyman's comments are interesting. I wonder if the sawdust used by John Doppel is slightly composted? You need to be our spy, Rhodyman!