Access, Quality, And Financial Performance Of Rural Hospitals Following Health System Affiliation

Abstract

More than a hundred rural hospitals have closed since 2010. Some rural hospitals have affiliated with health systems to improve their financial performance and potentially avoid closure, but the effects of affiliation on rural hospitals and their patients are unclear. To examine the relationship between affiliation and performance, we compared rural hospitals that affiliated with a health system in the period 2008-17 and a propensity score weighted set of nonaffiliating rural hospitals on twelve measures of structure, utilization, financial performance, and quality. Following health system affiliation, rural hospitals experienced a significant reduction in on-site diagnostic imaging technologies, the availability of obstetric and primary care services, and outpatient nonemergency visits, as well as a significant increase in operating margins (by 1.6-3.6 percentage points from a baseline of −1.6 percent). Changes in patient experience scores, readmissions, and emergency department visits were similar for affiliating and nonaffiliating hospitals. While joining health systems may improve rural hospitals' financial performance, affiliation may reduce access to services for patients in rural areas.Access to high-quality health care services remains a challenge in rural areas of the United States, 1 with more than a hundred rural hospitals having closed since 2010. 2 Hospital closures are often due to poor financial performance, 3 and while operating margins of urban hospitals have increased in recent years, operating margins of rural hospitals have steadily decreased. 4 Hospital closures are likely to exacerbate disparities that already exist for rural residents in access to health care, 5 as well as in life expectancy and mortality. 6 Urban-rural life expectancy gaps increased by a factor of five from 1969 to 2009, 7 and mortality in the poorest nonmetropolitan areas is 22 percent higher than in similarly poor metropolitan areas. 8 Furthermore, community hospitals are economic anchors; closures of sole community hospitals in rural areas are associated with reduced income and increased unemployment. 9 While Congress sought to provide financial protection to rural hospitals via the critical

For Rural Hospitals That Merged, Inpatient Charges Decreased and Outpatient Charges Increased: A Pre‐/Post‐Comparison of Rural Hospitals That Merged and Rural Hospitals That Did Not Merge Between 2005 and 2015

“…A recent study that evaluated rural hospital affiliations advanced our understanding of changes in certain services associated with affiliations 53 . Those services included outpatient nonemergency visits, on‐site diagnostic imaging technologies, and the availability of obstetric and primary care services 53 .…”

“…A recent study that evaluated rural hospital affiliations advanced our understanding of changes in certain services associated with affiliations 53 . Those services included outpatient nonemergency visits, on‐site diagnostic imaging technologies, and the availability of obstetric and primary care services 53 . The authors stated that, for affiliated hospitals, they “found no evidence that rural hospitals were reducing inpatient services overall and shifting more services to outpatient settings.” 53 That study differed from our study in several ways.…”

“…Those services included outpatient nonemergency visits, on‐site diagnostic imaging technologies, and the availability of obstetric and primary care services 53 . The authors stated that, for affiliated hospitals, they “found no evidence that rural hospitals were reducing inpatient services overall and shifting more services to outpatient settings.” 53 That study differed from our study in several ways. It investigated different outcomes, used data from a slightly different sample period (2008–2017), created a control group in a different manner, and, most notably, evaluated hospital affiliations—not mergers—as the treatment.…”

The U.S. Health Care System on the Eve of the Covid-19 Epidemic: A Summary of Recent Evidence on Its Impaired Performance

“…But a new study indicates that, although affiliation improved rural hospitals' finances, it led to significant reductions in the availability of diagnostic imaging technologies, obstetric and primary care services, and outpatient care. 34 Many "nonprofit" health systems rake in enormous profits. In 2018, Kaiser Foundation Health Plan and Hospitals had an operating surplus of $1.9 billion.…”

The CTSA program’s role in improving rural public health: Community-engaged disease prevention and health care innovation

“…Claire O'Hanlon and coauthors compare the attributes of the 306 rural hospitals that created health system affiliations in 2009 and 17 with those of rural hospitals that did not. They found that operating margins increased significantly following rural hospital affiliation with a health system [26]. However, affiliating hospitals "experienced a significant reduction in on-site diagnostic imaging technologies, the availability of obstetric and primary care services, and outpatient nonemergency visits."…”