A comparison of critical access hospitals and other rural acute care hospitals in Pennsylvania

Abstract

PurposeAs the Flex Program celebrates its 25th anniversary, we examined changes in critical access hospital (CAH) financial performance, investigated whether CAH status has reduced hospitals’ financial vulnerability, and identified factors influencing financial performance.MethodsWe collected data on acute care hospitals in Pennsylvania's rural counties for 2000‐20. Our sample contained 1,444 hospital‐year observations. We used trend analysis to compare the financial performance of CAHs and rural prospective payment system (PPS) hospitals (non‐CAHs). We investigated the effect of CAH status on financial performance and identified the time‐variant factors impacting financial performance using fixed‐effects regression analysis.ResultsThe median total margin of CAHs lagged behind that of non‐CAHs. When compared to non‐CAH costs over the same period, the median cost per patient day incurred by CAHs has increased, with the rate of increase being significantly higher in the most recent decade. Our findings show that while CAH status does not appear to have a direct impact on the total margin, it is significantly associated with a higher cost per patient day.ConclusionsCAHs in Pennsylvania appear to be facing a double whammy of declining margins and rising costs compared to non‐CAHs. Our findings demonstrate how crucial the Flex program has been in sustaining CAHs in Pennsylvania ever since its inception. Our findings have implications for rural health care delivery as well. While providing financial support and operational flexibility to CAHs should be a continuing policy priority, a long‐term policy goal should be to envision an economic development strategy that capitalizes on the unique strengths of each of the rural archetypes.

Reimagining America’s Rural Health: Challenges and Opportunities

“…These challenges were accompanied by multiple Critical Access Hospital (CAH) closures. The North Carolina Rural Health Research Program's (NC RHRP), real-time tracking reported 80 closures (Cai et al, 2017). To add to the problem, about an additional 673 rural hospitals were vulnerable to closure, with 68% of those being CAHs (Cai et al, 2017), leading up to the arrival of the 2019 COVID-19 pandemic.…”

“…The North Carolina Rural Health Research Program's (NC RHRP), real-time tracking reported 80 closures (Cai et al, 2017). To add to the problem, about an additional 673 rural hospitals were vulnerable to closure, with 68% of those being CAHs (Cai et al, 2017), leading up to the arrival of the 2019 COVID-19 pandemic. Furthermore, new demands from Affordable Care Act (ACA) (Patient Protection & Affordable Care Act, 2010) were posing new demands on rural health clinics' resources (Haddox, 2018).…”