Uncompensated Care Burden May Mean Financial Vulnerability For Rural Hospitals In States That Did Not Expand Medicaid.

The implementation of the Affordable Care Act has led to a large decrease in the number of uninsured people. Yet uncompensated care will still occur, particularly in states where eligibility for Medicaid is not expanded. We compared rural hospitals in Medicaid expansion and nonexpansion states in terms of the amount of uncompensated care they provided and their profitability and market characteristics in 2013. We found that rural hospitals in expansion states provided more dollars of uncompensated care than those in nonexpansion states and that the difference was at least partly driven by greater uncompensated costs associated with public programs such as Medicaid. We found higher dollar values of unrecoverable debt and charity care among non-critical access rural hospitals in nonexpansion states than among those in expansion states. Compared to hospitals in expansion states, those in nonexpansion states provided greater amounts of uncompensated care as a percentage of revenues and appeared to be more financially vulnerable; thus, these hospitals may be more likely to experience financial pressure or losses. Policy makers need to formulate strategies for maintaining access to care for rural populations residing in nonexpansion states.

Rural Hospital Mergers and Acquisitions: Which Hospitals Are Being Acquired and How Are They Performing Afterward?.

The number of stand-alone rural hospitals has been shrinking as larger health systems target these hospitals for mergers and acquisitions (M and As). However, little research has focused specifically on rural hospital M and A transactions. Using data from Irving Levin Associates' Healthcare M and A Report and Medicare Cost Reports from 2005 to 2012, we examined two research questions: (1) What were the characteristics of rural hospitals that merged or were acquired, and (2) were there changes in rural hospital financial performance, staffing, or services after an M and A transaction? We used logistic regression to identify factors predictive of merger, and we used multiple regression to examine various hospital measures after an M or A. Study results showed that hospitals with weaker financial performance but lower staffing levels and staffing costs were more likely to merge or be acquired. Statistically weak evidence suggested that operating margins declined after the merger; stronger evidence suggested reductions in salary expense. There was no statistically significant evidence of changes to the number of full-time equivalent (FTE) employees, the service lines that were included in the study, capital expenditures, or the amount of debt financing among the hospitals that merged or were acquired. M and A may not result in a rapid influx of capital, a relief of debt burden, or an improvement in bottom-line profitability. However, M and A may be a viable option for maintaining the hospital and the access to care it provides.