Strategies Adopted By Rural Hospitals in the US for Financial Sustainability

Presented at the Academy Health 2018 Annual Research Meeting

Research Objective:

The recent string of hospital closures has brought additional attention to the rural healthcare delivery landscape. The purpose of this study was to describe efforts undertaken by rural hospitals to improve financial performance and viability.

Study Design:

The study was a descriptive cross-sectional study. A survey was mailed to a stratified random sample of Chief Executive Officers (CEOs)/Administrators of active non-federal critical access hospitals and short-term acute hospitals located in United States rural counties (i.e., non- Core Based Statistical Area). Ninety-four surveys were completed and returned (27.8% response rate). Survey data were merged with county-level data from the University of Wisconsin’s County Health Rankings (for county-level sociodemographic information). Data were analyzed using descriptive statistics. Bivariate associations were examined using chi-square, t-test, and Pearson’s correlations, as appropriate. All analyses were weighted to account for the sampling design.

Population Studied:

Chief Executive Officers (CEOs)/Administrators of active non-federal critical access hospitals and short-term acute hospitals located in United States rural counties.

Principal Findings: All participants responded that their hospitals had adopted at least one of the 19 strategies assessed. The most common strategies adopted by rural hospitals for the purposes of improving financial performance included improving patient satisfaction/care experience, adding new service lines or expanding existing services, increasing community outreach and improving employee and physician engagement. Seventy-five percent or more of respondents reported adopting these strategies. Cost-cutting measures, such as department or unit closures and staff layoff, were less commonly adopted, even though over 90% of adopters of these cross-cutting measures reported that they had been effective at improving financial performance. The findings also highlighted some differences in approaches toward improving financial performance based on regional location, and the characteristics of the population served. For example, rural hospitals reporting a higher proportion of self-paying patients were less likely to have merged with or been acquired by another hospital (p

Conclusions: Rural hospitals nationwide have adopted varying strategies for financial improvement. The findings suggest that the selected strategic approach for financial improvement may depend on hospitals’ context.

Implications for Policy or Practice:

The findings from this study hold significant strategic planning implications for rural hospitals.