Is bigger better?: exploring the impact of system membership on rural hospitals
- Collection:
- Health Policy and Services Research
- Author(s):
- Melnick, Glenn, author Fonkych, Katya, author
- Contributor(s):
- California HealthCare Foundation, issuing body.
- Publication:
- [Oakland, Calif.] : California Health Care Foundation, May 2018
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Health Facility Merger Hospitals, Rural -- organization & administration Forecasting Hospitals, Rural -- economics Hospitals, Rural -- trends Patient Transfer -- statistics & numerical data Rural Population State Government Humans California United States
- Genre(s):
- Technical Report
- Abstract:
- Rural hospitals play a critical role in delivering essential health care services to a significant portion of California's residents. In 2016, 59 rural hospitals, located in 36 of the state's 58 counties, provided a wide range of long-term, acute, maternity, emergency, and primary care to more than two million patients. On average, these patients were sicker, older, and more vulnerable than their counterparts in California's urban areas, and much more likely to be covered by Medicare and Medi-Cal than by commercial insurance. Despite their crucial role, some of California's rural hospitals seem financially precarious--in 2015, 8 of the state's 59 rural hospitals reported negative net income. Consistent losses increase the likelihood that a facility will close, a fate shared by nearly a quarter of the state's rural hospitals over the past 20 years. In response, several rural hospitals have received special designation from the federal government making them eligible for enhanced Medicare reimbursement, and legislation pending in the California legislature would increase Medi-Cal payment to rural facilities. Single hospitals joining multihospital systems has been another response. Currently, 19 of the state's rural hospitals have attempted to alleviate financial pressure by joining a system composed of at least two other hospitals. The formation and growth of these arrangements is not unique to California's rural areas, nor to the state as a whole. But while the impact of multihospital systems on the prices health insurers--and ultimately, consumers--pay is well documented, less is known about their consequences for the financial health and care integration patterns of rural facilities. This study explores how system membership impacts the financial performance and transfer patterns of rural hospitals in California. It examines which rural hospitals are in systems, the extent to which rural hospitals receive direct subsidies or other financial benefits from their system, and whether joining a system increases or decreases the likelihood of a rural hospital remaining open. Importantly, it also examines evidence for the impact of system membership on transfer patterns, which bears on care quality, safety, and patient experience. These findings may help inform policymakers at the state and federal level as they seek to address negative consequences of hospital system formation on consumers broadly, while also ensuring access to care in rural areas. The brief concludes with a discussion of policy implications and areas for further study.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (19 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101744418 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101744418