Converting to critical access status: how does it affect rural hospitals' financial performance?

Pengxiang Li; John E Schneider; Marcia M Ward

doi:10.5034/inquiryjrnl_46.01.46

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Journal article

Converting to critical access status: how does it affect rural hospitals' financial performance?

Pengxiang Li, John E Schneider and Marcia M Ward

Inquiry (Chicago), Vol.46(1), pp.46-57

2009

DOI: 10.5034/inquiryjrnl_46.01.46

PMID: 19489483

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https://doaj.org/article/6c52dc515c29443692dfc9381505a1cdView

Open Access

Abstract

To improve rural access to care, the Balanced Budget Act of 1997 allowed eligible rural hospitals to convert to critical access hospitals (CAHs), which changed their Medicare payment from a prospective payment system (PPS) to a cost-based system. The objective of this paper is to examine the effects of CAH conversion on rural hospital operating revenues, operating expenses, and operating margins using an eight-year panel of 89 rural hospitals in Iowa. Ad hoc hospital revenue, cost, and profit functions were estimated using panel data fixed-effects linear models. We found that rural hospital CAH conversion was associated with significant increases in hospital operating revenues, expenses, and margins.

Budgets

Critical Care

Health Services Accessibility

Hospital Costs

Hospitals, Rural - classification

Hospitals, Rural - economics

Hospitals, Rural - statistics & numerical data

Iowa

Medicare - economics

Models, Statistical

Organizational Innovation

Reimbursement Mechanisms

United States

Details

Title: Subtitle: Converting to critical access status: how does it affect rural hospitals' financial performance?
Creators: Pengxiang Li - Division of General Internal Medicine, University of Pennsylvania, 19104, USA. penli@mail.med.upenn.edu
John E Schneider
Marcia M Ward
Resource Type: Journal article
Publication Details: Inquiry (Chicago), Vol.46(1), pp.46-57
DOI: 10.5034/inquiryjrnl_46.01.46
PMID: 19489483
NLM abbreviation: Inquiry
ISSN: 0046-9580
eISSN: 1945-7243
Grant note: HS015009 / AHRQ HHS
Language: English
Date published: 2009
Academic Unit: Health Management and Policy
Record Identifier: 9984221638902771

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