Service mix and financial performance in rural hospitals: A contingency theory perspective.

BACKGROUND: Rural hospitals are increasingly at risk of closure. Closure reduces the availability of hospital care in rural areas, resulting in a disparity in health between rural and urban citizens, and it has broader economic impacts on rural communities as rural hospitals are often large employers and are vital to recruiting new businesses to a community. To combat the risk of closure, rural hospitals have sought partnerships to bolster financial performance, which often results in a closure of services valuable to the community, such as obstetrics and certain diagnostic services, which are viewed as unprofitable. This can lead to poor health outcomes as community members are unable to access care in these areas. PURPOSE: In this article, we explore rural hospital service offerings and financial performance, with an aim to illuminate if specific service offerings are associated with positive financial performance in a rural setting. METHODS: Our study used hospital organization data, as well as county-level demographics with periods of analysis from 2015 and 2019. We employed a pooled cross-sectional regression analysis with robust standard errors examining the association between total margin and service lines among rural hospitals in the United States. RESULTS: The findings suggest that some services deemed unprofitable in urban and suburban hospital settings-such as obstetrics and drug/alcohol rehabilitation-are associated with higher margins in rural hospitals. Other unprofitable service lines-such as psychiatry and long-term care-are associated with lower margins in rural hospitals. CONCLUSION: Our results suggest the need of rural hospitals to choose services that align with environmental circumstances to maximize financial performance. PRACTICE IMPLICATION: Hospital administrators in rural settings need to take a nuanced look at their environmental and organizational specifics when deciding upon the service mix. Generalizations regarding profitability should be avoided to maximize financial performance.

Assessment of the Financial Health of Rural Hospitals After Implementation of the Georgia Rural Hospital Tax Credit Program.

Importance: In 2016, Georgia implemented the Rural Hospital Tax Credit Program, which allows taxpayers to receive a tax credit for contributions to qualifying rural hospitals in the state. Empirical evidence of the program's association with the viability of the state's rural hospitals is needed. Objective: To examine the association of the tax credit program with the financial health of participating rural hospitals. Design, Setting, and Participants: This longitudinal cross-sectional study used hospital financial data from the Centers for Medicare & Medicaid Services for 2015 to 2019. A difference-in-differences analytic approach was used to examine the association of the tax credit program with rural hospital financial health. Study participants included Georgia rural hospitals eligible to participate in the program. Comparison hospitals were selected from the southern states of Alabama, Florida, Mississippi, North Carolina, South Carolina, and Tennessee. Exposures: Hospital participation in the Georgia Rural Hospital Tax Credit Program. Main Outcomes and Measures: The primary outcome of the study was financial health measured with total margin, days cash on hand, debt-asset ratio, and average age of plant as well as a Financial Strength Index (FSI), which combined the previous measures to assess overall financial strength. Results: The analytical sample included a balanced panel of 136 hospitals, with 47 Georgia Rural Hospital Tax Credit Program participants (18 [38%] critical access hospitals; 5 [11%] system affiliated; mean [SD] bed count, 60 [47]; mean [SD] Medicare inpatient mix, 52% [16]) and 89 comparison hospitals (43 [48%] critical access hospitals; 24 [27%] system affiliated; mean [SD] bed count, 52 [41]; mean [SD] Medicare inpatient mix, 67% [18]). Two years after implementation, program participation was associated with a 23% increased probability of good or excellent financial health (b = 0.23; 95% CI, 0.10-0.37; P < .001) and a 6.7-point increase in total margin (b = 6.67; 95% CI, 3.61-9.73; P < .001). Conclusions and Relevance: These early findings suggest that the Georgia Rural Hospital Tax Credit Program is associated with improvements in hospital financial health; however, additional studies are needed to assess the program's long-term impact on the financial sustainability of Georgia's rural hospitals.

An Enhanced Kaizen Event in a Sterile Processing Department of a Rural Hospital: A Case Study.

Operating Rooms (ORs) generate the largest revenues and losses in a hospital. Without the prompt supply of sterile surgical trays from the Sterile Processing Department (SPD), the OR would not be able to perform surgeries to its busy schedule. Nevertheless, little emphasis has been brought in the medical literature to research on surgical instrument processing in the medical literature. The present study was done applies an Enhanced Kaizen Event (EKE) in the SPD of a rural hospital to identify sources of waste and minimize non-value-added steps in the SPD processes. The EKE consisted of three successive Plan-Do-Check-Act (PDCA) cycles, which focused on improvements at the departmental level first, then at an area level, and finally at the station level. The EKE yielded an improved streamlined workflow and a new design for the SPD layout, one of its areas, and a workstation. This paper aims at building a methodology, including identified steps. Results exhibited a 35% reduction in travel distance by the staff, eliminating non-value-added processes, reducing errors in the sterilization process, and eliminating cross-contamination for sterilized materials.

Rural Surgery and Status of the Rural Workplace: Hospital Survival and Economics.

Nearly 60 million people live in a rural area across the United States. Since 2005, 162 rural hospitals have closed, and the rate of rural hospital closures seems to be accelerating. Major drivers of rural hospital closures are poor financial health, aging facilities, and low occupancy rates. Rural hospitals are particularly vulnerable to policy and market changes, and even small changes can have a disproportionate effect on rural hospital financial viability. Surgery can be safely performed in rural hospitals; however, hospital closures may be putting the rural population at increased risk of morbidity and mortality from surgical disease.

Capital Expenditures Increased at Rural Hospitals That Merged Between 2012 and 2015.

EXECUTIVE SUMMARY: The number of rural hospital mergers has increased substantially in recent years. A commonly reported reason for merging is to increase access to capital. However, no empirical evidence exists to show whether capital expenditures increased at rural hospitals after a merger. We used a difference-in-differences approach to determine whether total capital expenditures changed at rural hospitals after a merger. The comparison group (rural hospitals that did not merge during the 2012 through 2015 study period) was weighted using inverse probability of treatment weights. The key outcome measure was logged total capital expenditures.Merging resulted in a 26% increase in capital expenditures and also was associated with a significant improvement in plant age. The postmerger improvement in plant age may have been partially attributable to merger-related accounting changes and partially attributable to increased capital expenses, possibly on long-term asset renovations and replacement.These findings suggest that through mergers, rural hospital board members and executives who have accepted or are considering a merger may improve a hospital's ability to increase capital expenditures. Further, increased capital investments in rural hospitals may be an important signal to the community that the acquirer intends to keep the rural hospital open and continue providing some volume and level of services within the community. Future research should determine how capital is spent after a merger.

Rural Hospital Mergers Increased Between 2005 and 2016-What Did Those Hospitals Look Like?

The objective of this study is to determine whether key hospital-level financial and market characteristics are associated with whether rural hospitals merge. Hospital merger status was derived from proprietary Irving Levin Associates data for 2005 through 2016 and hospital-level characteristics from HCRIS, CMS Impact File Hospital Inpatient Prospective Payment System, Hospital MSA file, AHRF, and U.S. Census data for 2004 through 2016. A discrete-time hazard analysis using generalized estimating equations was used to determine whether factors were associated with merging between 2005 and 2016. Factors included measures of profitability, operational efficiency, capital structure, utilization, and market competitiveness. Between 2005 and 2016, 11% (n = 326) of rural hospitals were involved in at least one merger. Rural hospital mergers have increased in recent years, with more than two-thirds (n = 261) occurring after 2011. The types of rural hospitals that merged during the sample period differed from nonmerged rural hospitals. Rural hospitals with higher odds of merging were less profitable, for-profit, larger, and were less likely to be able to cover current debt. Additional factors associated with higher odds of merging were reporting older plant age, not providing obstetrics, being closer to the nearest large hospital, and not being in the West region. By quantifying the hazard of characteristics associated with whether rural hospitals merged between 2005 and 2016, these findings suggest it is possible to determine leading indicators of rural mergers. This work may serve as a foundation for future research to determine the impact of mergers on rural hospitals.

Regionalization of Isolated Pediatric Femur Fracture Treatment: Recent Trends Observed Using the Kids' Inpatient Database.

BACKGROUND: Isolated pediatric femur fractures have historically been treated at local hospitals. Pediatric referral patterns have changed in recent years, diverting patients to high volume centers. The purpose of this investigation was to assess the treatment location of isolated pediatric femur fractures and concomitant trends in length of stay and cost of treatment. METHODS: A cross-sectional analysis of surgical admissions for femoral shaft fracture was performed using the 2000 to 2012 Kids' Inpatient Database. The primary outcome was hospital location and teaching status. Secondary outcomes included the length of stay and mean hospital charges. Polytrauma patients were excluded. Data were weighted within each study year to produce national estimates. RESULTS: A total of 35,205 pediatric femoral fracture cases met the inclusion criteria. There was a significant shift in the treatment location over time. In 2000, 60.1% of fractures were treated at urban, teaching hospitals increasing to 81.8% in 2012 (P<0.001). Mean length of stay for all hospitals decreased from 2.59 to 1.91 days (P<0.001). Inflation-adjusted total charges increased during the study from $9499 in 2000 to $25,499 in 2012 per episode of treatment (P<0.001). Total charges per hospitalization were ∼$8000 greater at urban, teaching hospitals in 2012. CONCLUSIONS: Treatment of isolated pediatric femoral fractures is regionalizing to urban, teaching hospitals. Length of stay has decreased across all institutions. However, the cost of treatment is significantly greater at urban institutions relative to rural hospitals. This trend does not consider patient outcomes but the observed pattern appears to have financial implications. LEVEL OF EVIDENCE: Level III-case series, database study.

Understanding Barriers to Telemedicine Implementation in Rural Emergency Departments.

STUDY OBJECTIVE: Telemedicine has potential to add value to the delivery of emergency care in rural emergency departments (EDs); however, previous work suggests that it may be underused. We seek to understand barriers to telemedicine implementation in rural EDs, and to describe characteristics of rural EDs that do and do not use telemedicine. METHODS: We performed a secondary analysis of data from the 2016 National Emergency Department Inventory survey, identifying rural EDs that did and did not use telemedicine in 2016. All rural EDs that did not use telemedicine were administered a follow-up survey asking about ED staffing, transfer patterns, and perceived barriers to telemedicine use. We used a similar instrument to survey a sample of EDs that did use telemedicine, but we replaced the question about barriers with questions related to telemedicine use. Data are presented with descriptive statistics. RESULTS: We identified 977 rural EDs responding to the 2016 National Emergency Department Inventory-USA survey; 453 (46%; 95% confidence interval 43% to 50%) did not use telemedicine. Among rural nonusers, 374 EDs (83%; 95% confidence interval 79% to 86%) responded to our second survey. Of the 177 rural EDs using telemedicine that we surveyed, 153 responded (86%; 95% confidence interval 80% to 91%). Among rural EDs not using telemedicine, 235 (67%) reported that their ED, hospital, or health system leadership had considered it. Cost was the most commonly cited reason for lack of adoption (n=86; 37%). CONCLUSION: Among US rural EDs, cost is a commonly reported barrier that may be limiting the extent of telemedicine adoption.

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

More than 100 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.

Developing an antimicrobial stewardship program across a rural health system: The Avera Health experience.

PURPOSE: The stages of development of a health system-wide antimicrobial stewardship program (ASP) using existing personnel and technology are described. SUMMARY: Small hospitals with limited resources may struggle to meet ASP requirements, particularly facilities without onsite infectious disease physicians and/or experienced infectious disease pharmacists. Strategies for ASP development employed by Avera Health, a 33-hospital health system in the Midwest, included identifying relevant drug utilization and resistance patterns, education and pathway development, and implementation of Web-based conferencing to provide pharmacists throughout the system with access to infectious disease expertise on a daily basis. These efforts resulted in an evolving single-system ASP that has leveraged existing resources to overcome some system barriers. Program outcomes to date include a reduction in the use of a targeted agent, improved pathogen susceptibility trends, and rates of hospital-associated Clostridium difficile infection below national benchmarks. CONCLUSION: The Avera Health ASP grew from a collaborative project targeting levofloxacin overuse and resistance among key bacteria to a formal, health system-wide ASP in a rural setting. This program used existing personnel to provide standardized processes, educational campaigns, and antimicrobial expertise through the use of technology. This ASP program may provide helpful examples of ASP strategies for other rural health systems with similar resources.

Medicare Access and CHIP Reauthorization Act and Rural Hospitals.

The cost of health care within the United States has continued to increase, whereas the quality of patient care has generally decreased in some areas. With the continued use of Medicare's former physician reimbursement algorithm, termed sustainable growth rate, national expenditures within the United States have been expected to increase 5.6% annually. To modernize the delivery and financing of care, Congress has introduced the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which has permanently eliminated and replaced the sustainable growth rate. The purpose of this study was to review MACRA and its implementation to determine how it would financially impact rural hospitals. Two reimbursement pathways have been created for physicians under the MACRA. In addition, the financing and competition among facilities created by the act have been expected to impact physicians and health care organizations. Rural hospitals have been set to receive reduced government reimbursements and have been predicted to compete poorly with larger hospitals and health care corporations. Furthermore, the payment tracks available through the act have been projected to impact solo and small practice physicians negatively.

The impact of the introduction of a point-of-care haematology analyser in a New Zealand rural hospital with no onsite laboratory.

INTRODUCTION: Hokianga Hospital is a small rural hospital in the far north of New Zealand serving a predominantly Maori population of 6500. The hospital, an integral part of a comprehensive primary healthcare service, provides continuous acute in-hospital and emergency care. Point-of-care (POC) biochemistry has been available at the hospital since 2010 but there is no onsite laboratory. This study looked at the impact of introducing a POC haematology benchtop analyser at Hokianga Hospital. METHODS: This was a mixed methods study conducted at Hokianga Hospital over 4 months in 2016. Quantitative and qualitative components and a cost-benefit analysis were combined using an integrative process. Part I: Doctors working at Hokianga Hospital completed a form before and after POC haematology testing, recording test indication, differential diagnosis, planned patient disposition and impact on patient treatment. Part II: Focus group interviews were conducted with Hokianga Hospital doctors, nurses and a cultural advisor. Part III: An analysis of cost versus tangible benefits was conducted. RESULTS: Part I: A total of 97 POC haematology tests were included in the study. Of these, 97% were undertaken in the setting of the acute clinical presentation and 72% were performed out of hours. The average number of differential diagnoses reduced from 2.43 pre-test to 1.7 post-test, (χ2 tests p<0.05). There was a significant reduction in the number of patients transferred and an increase in the number of patients discharged home (χ2 tests p<0.05). Part II: Three main themes were identified: impact on patient management, challenges and the commitment to 'make it work'. POC haematology had a positive impact on patient management and clinician confidence mainly by increasing diagnostic certainty. The main challenges related to the hidden costs of implementing the analyser and its associated quality assurance program in a remote-from-laboratory setting. Part III: Tangible cost-benefit analysis showed a clear cost saving to the health system as a whole. CONCLUSIONS: This is the first published study evaluating the impact of haematology POC testing on acute clinical care in a rural hospital with no onsite laboratory. Timely access to a full blood count POC improves clinical care and addresses inequity. There was an overall reduction in healthcare costs. The study highlighted the hidden costs of implementing POC systems and their associated quality assurance programs in a remote-from-laboratory context.

Maryland's Experiment With Capitated Payments For Rural Hospitals: Large Reductions In Hospital-Based Care.

In 2010 Maryland replaced fee-for-service payment for some rural hospitals with "global budgets" for hospital-provided services called Total Patient Revenue (TPR). A principal goal was to incentivize hospitals to manage resources efficiently. Using a difference-in-differences design, we compared eight TPR hospitals to seven similar non-TPR Maryland hospitals to estimate how TPR affected hospital-provided services. We also compared health care use by "treated" patients in TPR counties to that of patients in counties containing control hospitals. Inpatient admissions and outpatient services fell sharply at TPR hospitals, increasingly so over the period that TPR was in effect. Emergency department (ED) admission rates declined 12 percent, direct (non-ED) admissions fell 23 percent, ambulatory surgery center visits fell 45 percent, and outpatient clinic visits and services fell 40 percent. However, for residents of TPR counties, visits to all Maryland hospitals fell by lesser amounts and Medicare spending increased, which suggests that some care moved outside of the global budget. Nonetheless, we could not assess the efficiency of these shifts with our data, and some care could have moved to more efficient locations. Our evidence suggests that capitation models require strong oversight to ensure that hospitals do not respond by shifting costs to other providers.

Economic efficiency versus accessibility: Planning of the hospital landscape in rural regions using a linear model on the example of paediatric and obstetric wards in the northeast of Germany.

BACKGROUND: Costs for the provision of regional hospital care depend, among other things, on the population density and the maximum reasonable distance to the nearest hospital. In regions with a low population density, it is a challenge to plan the number and location of hospitals with respect both to economic efficiency and to the availability of hospital care close to residential areas. We examined whether the hospital landscape in rural regions can be planned on the basis of a regional economic model using the example which number of paediatric and obstetric wards in a region in the Northeast of Germany is economically efficient and what would be the consequences for the accessibility when one or more of the three current locations would be closed. METHODS: A model of linear programming was developed to estimate the costs and revenues under different scenarios with up to three hospitals with both a paediatric and an obstetric ward in the investigation region. To calculate accessibility of the wards, geographic analyses were conducted. RESULTS: With three hospitals in the study region, there is a financial gap of €3.6 million. To get a positive contribution margin for all three hospitals, more cases have to be treated than the region can deliver. Closing hospitals in the parts of the region with the smallest population density would lead to reduced accessibility for about 8% of the population under risk. CONCLUSIONS: Quantitative modelling of the costs of regional hospital care provides a basis for planning. A qualitative discussion to the locations of the remaining departments and the implementation of alternative healthcare concepts should follow.

Costs and Trends of Emergency Department Utilization Pre-ACA and Post-ACA: Evidence From a Rural Georgia Hospital.

BACKGROUND: A high volume of emergency department (ED) visits in the rural United States may be the result of barriers to accessing primary care. The Affordable Care Act (ACA) increased the number of insured, which may improve patient access to primary care and therefore reduce ED utilization. The objective of this study is to estimate the trends and cost of ED utilization pre-ACA and post-ACA implementation in a rural United States. DATA AND METHODS: We use 2009-2013 ED utilization data from a rural Georgia hospital to estimate trends and costs by demographic characteristics, referring source, and payor information. T tests and log-linear regression models are used to assess the sociodemographic factors impacting ED inflation-adjusted costs before (2009-2010) and after ACA (2011-2013) implementation. RESULTS: During 2009-2013, 39,970 ED encounters were recorded with an average cost (AC) of $2002 per visit. Results indicate that during pre-ACA, on average, 8702 encounters were recorded per year with an AC of $1759. During post-ACA, there were 7521 annual visits, with an annual AC of $2241. Regression model results indicate that AC were significantly higher for men, older adults, nonblack patients, those with private insurance, and during the post-ACA period. CONCLUSIONS: Results suggest that post-ACA, declining ED visits may be due to more patients with insurance accessing primary care instead of ED. We further hypothesize that increased AC during this period may be due to ED visits being of an emergent nature, which require more resources to treat. Further comprehensive investigation is warranted to study the impact of ACA on ED utilization for nonemergency purposes among rural and nonrural hospitals.