State Legislation and Policy Affecting Rural Hospital Conversion and Closure

Many rural hospitals have closed or converted to organizations that provide health services other than general, acute inpatient care. However, little is known about why rural hospitals convert rather than close. This study evaluates the relationship between state policy and rates of rural hospital conversion relative to rates of rural hospital closure. The expectation was that the relationship among state policies and rates of conversion and rates of closure differs as a function of whether a state policy facilitates rural hospital transition to alternative models of care or supports them in their existing form. National data were analyzed for all rural hospitals from 1984 to 1991. Results indicate that state policies have done little to facilitate widespread adoption of conversion among rural hospitals. Despite these findings, results also indicate that some state policies have resulted in an increase in the rate of rural hospitals conversions as an alternative to closure.     

Strategic Activity and Financial Performance of U.S. Rural Hospitals: A National Study, 1983 to 1988

This study examines the effect of 13 strategic management activities on the financial performance of a national sample of 797 U.S. rural hospitals during the period of 1983-1988. Controlled for environment-market, geographic-region, and hospital-related variables, the results show almost no measurable effect of strategic adoption on rural hospital profitability and liquidity. Where statistically significant relationships existed, they were more often negative than positive. These findings were not expected; it was hypothesized that positive effects across a broad range of strategies would emerge, other things being equal. Discussed are possible explanations for these findings as well as their implication for a rural health policy relying on individual rural hospital strategic adaptation to environmental change.     

Hospital closure: a review of current and proposed research.

This paper reviews available data describing issues and research findings with implications for hospital closings. Factors contributing to fiscal problems of hospitals (e.g., inadequate reimbursement, inflation, management problems, organizational structure, societal factors) are discussed. Selected studies offering examples of hospital and community characteristics associated with closure are presented. This review suggests that future directions for research should focus not only on hospital cost control but also on insuring equity in the distribution of hospital services. Specifically, research is needed that further describes the hospital closure phenomenon, the effects of closure, and the policy choices that might be pursued to insure equity in the continuation of hospital services to disadvantaged populations.     

Access implications of rural hospital closures and conversions

This article examines the effects of rural hospital closures and conversions on various structural dimensions of access. Based on a data set of rural hospitals in Texas during the period 1985-1990, the results indicate that closure or conversion typically had relatively little detrimental effect on hospital services and distance to alternative sources of care, but hospital bed and physician availability may have been adversely affected in certain cases. Rural hospital conversions to alternative types of health care facilities, such as ambulatory care clinics, do appear to have maintained the availability of a restricted set of medical services in some rural areas.     

Hospital-physician integration: case studies of community hospitals.

Hospitals are attempting more meaningfully to involve physicians in management as one approach to increasing the efficiency and effectiveness of their operations. The purpose of this research was to explore the relationship between the structure of the medical staff organization, the extent to which physicians are integrated into hospital decision making and the hospital's financial performance. A measure of hospital-physician integration was developed based on Alexander et al's (1986) dimensions of hospital-physician integration which were based on Scott's (1982) organizational models, ie, autonomous, heteronomous and conjoint. A multiple case study design, which comprised eight community non-teaching hospitals over 200 beds located in the Province of Ontario, Canada, was used to examine the relationship between variables. Study results suggest that there is variation among community hospitals on both contextual and organization factors. Hospitals with high levels of hospital-physician integration were located in highly populated areas, had formulated and implemented a strategic plan, had highly structured medical staff organizations, and had no budgetary deficit. In contrast, hospitals with moderate or low levels of integration were more likely to be located in lowly populated areas, had little planning activity, had a moderately structured medical staff organization, and had deficit budgeting. Suggested areas for future research include examining the role of the Board of Trustees in determining physicians' organizational roles and identifying differences in commitments, characteristics, and motivations of physicians working in rural versus urban hospitals and their impact on integrative strategies.     

Effects of market position and competition on rural hospital closures.

OBJECTIVE: To examine the dynamic effects of competition and hospital market position on rural hospital closures. DATA SOURCE/STUDY SETTING: Analysis of all rural community hospitals operating between 1984 and 1991, with the exception of sole-provider hospitals. Data for the study are obtained from four sources: the AHA Annual Surveys of Hospitals, the HCFA Cost Reports, the Area Resource File, and a hospital address file constructed by Geographic Inc. DATA COLLECTION AND ANALYSIS: Variables are merged to construct pooled, time-series observations for study hospitals. Hospital closure is specified as a function of hospital market position, market level competition, and control variables. Discrete-time logistic regressions are used to test hypotheses. PRINCIPAL FINDINGS: Rural hospitals operating in markets with higher density had higher risk of closure. Rural hospitals that differentiated from others in the market on the basis of geographic distance, basic services, and high-tech services had lower risks of closure. Effects of market density on closure disappeared when market position was included in the model, indicating that differentiation in markets should be taken into account when evaluating the effects of competition on rural hospital closure. CONCLUSIONS: Our findings suggest that rural hospitals can reduce competitive pressures through differentiation and that accurate measures of competition in geographically defined market areas are critical for understanding competitive dynamics among rural hospitals.     

Strategic adaptations to PPS by rural hospitals: implications for theory and research.

Medicare's Prospective Payment System (PPS) has introduced a new environment in which hospitals must either alter their strategies for delivering services or face closure. This is a challenge for rural hospitals that often lack the resources and supportive economic climate of their urban counterparts. Few guidelines are available to assist rural hospitals in responding organizationally to PPS-induced constraints. This article examines the plight of rural hospitals from the perspective of strategic adaptation. A conceptual framework is proposed for studying strategic adaptations to PPS by rural hospitals. The implications for developing a sound research methodology are also discussed. On the basis of this research agenda, it may be possible to clarify how rural hospitals should adapt to PPS (and similar) constraints now, and in the future.     

Closing rural hospitals in Saskatchewan: on the road to wellness?

Rising health care costs at a time of economic stagnation, federal cutbacks to Medicare, and an obsession with budget deficits at all levels of government have contributed to a sense of urgency to reform the Canadian health care system. Accompanying these economic and political motivations for reform, has been a shift in our understanding of health and well-being that lays less emphasis on the institutionalization and medicalization of health care. As part of its wellness approach to health, the Saskatchewan government in 1992 announced the closure and conversion of 52 small rural hospitals to wellness centres as part of a shift from institutional care to community based care. While the health costs and benefits of this shift are contested, the paradox is that closing rural hospitals may have unrealized health and social costs because of the psychological and community importance of hospitals to the meaning of place. This paper begins with a review of the meaning and importance of local institutions for communities. It is clear from this starting point that the debate about the economic and health benefits and costs of rural hospital closures is a limited basis for understanding hospital closures. Finally, the history of Saskatchewan hospitals and a narrative of the recent closures of rural hospitals drawn from a sampling of provincial newspapers and oral discussions highlights the need to understand the hospital closure in terms of its impact on health irrespective of the medical impacts.     

Horizontal and Vertical Integration-Diversification in Rural Hospitals: A National Study of Strategic Activity, 1983–1988

Abstract: This study examines both the magnitude of and factors influencing the adoption of 13 horizontal and vertical integration and diversification strategies in a national sample of 797 U.S. rural hospitals during the period 1983–1988. Using organization theory, hypotheses were posed relating environmental and market factors, geographic location, and hospital characteristics to the adoption of horizontal and vertical integration and diversification. Results indicate that only one of 13 strategies was adopted by more than 50 percent of all rural hospitals during the study period, and that most of the directional hypotheses were not confirmed using Cox's proportional hazards models. In particular, environmental and market factors were unrelated to the strategies studied. Issues of methodology and theory are discussed; however, during an historically turbulent period, both relatively low levels of rural hospital strategic activities and lack of predictive power of the theory suggest caution in relying heavily on a policy for rural hospital survival that is dependent on individual market-oriented strategic behavior.     

Strategic planning in rural health care organizations.

Is strategic planning associated with higher levels of performance in health care organizations? Is strategic planning effective? This article examines strategic planning's impact on rural hospital and rural nursing facility performance, organizational characteristics, and strategy. The findings suggest that strategic planning in rural hospitals is strongly associated with higher profits, operating margins and planning effectiveness, and associated to a lesser extent with lower costs and higher revenues per patient day. However, strategic planning does not appear to be associated with higher performance in nursing facilities. The implications for strategic planning in rural health care organizations are discussed.     

Determinants of hospital closure in South Korea: use of a hierarchical generalized linear model

Understanding causes of hospital closure is important if hospitals are to survive and continue to fulfill their missions as the center for health care in their neighborhoods. Knowing which hospitals are most susceptible to closure can be of great use for hospital administrators and others interested in hospital performance. Although prior studies have identified a range of factors associated with increased risk of hospital closure, most are US-based and do not directly relate to health care systems in other countries. We examined determinants of hospital closure in a nationally representative sample: 805 hospitals established in South Korea before 1996 were examined-hospitals established in 1996 or after were excluded. Major organizational changes (survival vs. closure) were followed for all South Korean hospitals from 1996 through 2002. With the use of a hierarchical generalized linear model, a frailty model was used to control correlation among repeated measurements for risk factors for hospital closure. Results showed that ownership and hospital size were significantly associated with hospital closure. Urban hospitals were less likely to close than rural hospitals. However, the urban location of a hospital was not associated with hospital closure after adjustment for the proportion of elderly. Two measures for hospital competition (competitive beds and 1-Hirshman--Herfindalh index) were positively associated with risk of hospital closure before and after adjustment for confounders. In addition, annual 10% change in competitive beds was significantly predictive of hospital closure. In conclusion, yearly trends in hospital competition as well as the level of hospital competition each year affected hospital survival. Future studies need to examine the contribution of internal factors such as management strategies and financial status to hospital closure in South Korea.     

医院发展战略分析

中国市场经济和医疗行业改革的深入发展 ,医院自主发展和独立主体地位的获得 ,提出了医院发展战略问题。制定医院发展战略首先需要掌握战略分析方法。作者将战略管理中的分析方法引入医院发展管理领域 ,提出 3种模式下医院发展战略分析 :即医疗资源导向的战略分析、竞争战略分析和基于知识进步的战略分析。同时 ,提出战略整合和当前中国医院普遍面临的若干战略问题。     

The strategic behavior of U.S. rural hospitals: a longitudinal and path model examination

This article explores the relationships among rural hospital strategic behavior (market power and cost control strategies), environmental and organizational characteristics, and the influence these have on the financial performance of rural hospitals in the United States. The study finds that only market power strategies and organizational characteristics (ownership and size) exhibit significant impacts on rural hospital financial performance.     

Rural vs urban hospital performance in a ‘competitive’ public health service

In some western countries, market-driven reforms to improve efficiency and quality have harmed the performance of some hospitals, occasionally leading to their closure, mostly in rural areas. This paper seeks to explore whether these reforms affect urban and rural hospitals differently in a European health service. Rural and urban hospital performance is compared taking into account their efficiency and perceived quality. The study is focused on the Andalusian Health Service (SAS) in Spain, which has implemented a freedom of hospital choice policy and a reimbursement system based on hospital performance. Data Envelopment Analysis, the Mann–Whitney U test and Multidimensional Scaling techniques are conducted for two years, 2003 and 2006. The results show that rural and urban hospitals perform similarly in the efficiency dimension, whereas rural hospitals perform significantly better than urban hospitals in the patient satisfaction dimension. When the two dimensions are considered jointly, some rural hospitals are found to be the best performers. As such, market-driven reforms do not necessary result in a difference in the performance of rural and urban hospitals.     

Rural hospital administrators and strategic management activities

This study examines the association of characteristics of rural hospital administrators and the adoption of seven strategic activities in a national sample of 797 U.S. rural hospitals during the period 1983-1988. Based on the premise that managerial activities can affect organizational change, we test five hypotheses relating head administrator characteristics to strategic adaptation, controlling for environment-market and hospital-related variables. Bivariate analysis of the strategic adoption showed a positive association with administrative turnover and a negative association with head administrator age. Multivariate logistic regression showed that only high levels of turnover were associated with strategic activities, net of control variables. The implications of these findings and the lack of predictive power of other rural hospital administrator characteristics--especially affiliation with the American College of Healthcare Executives--are discussed within the context of a "strategic management policy" for rural hospitals.     

Rural community hospitals and factors correlated with their risk of closing

The issue of rural hospital closings in the United States in recent years has become of increasing concern to health care policy analysts. Rural communities face unique health needs, necessitating access to local health care. Much has been written about the social, economic, legislative, and technological changes that have increased the stress on rural hospitals in the 1980s. However, quantifiable models have been lacking with which to examine in detail factors associated with rural hospitals and to correlate such factors with individual hospitals' risks of closing. In this study, we identify variables correlated with rural community hospital closures in the period 1980-87. Using epidemiologic case-control methods, 161 closed rural hospitals were matched 1 to 3 with a control group of 483 rural hospitals which remained open during the same period. A series of hospital performance indicators and demographic, economic, and social community variables were entered into a multiple logistic regression model. Four variables were found to be positively correlated with risk of closure. They are for-profit ownership; nongovernment, not-for-profit ownership; presence of a skilled nursing or other longterm care unit; and the number of other hospitals in the county. Variables negatively correlated with risk of closure were accreditation by the Joint Commission on the Accreditation of Healthcare Organizations, the number of facilities and services, and membership in a multihospital system. Policy and research implications at the Federal, State, and local levels are discussed.     

Rural Health Research Community Perceptions of the Effects of Rural Hospital Closure on Access to Care

The purpose of this case study was to ascertain the perceptions of health professionals who were located in six rural communities where hospital closure occurred, regarding the impact of closure on community residents. These health professionals were asked to respond to questions about effects of hospital closures on the availability of medical services such as emergency care, physician services, hospital services and nursing home care. To control for trends in medical services utilization that were unrelated to hospital closure, the study design included comparison areas where similar hospitals remained open. A standardized questionnaire was administered to three health professionals in each of the areas that experienced a hospital closure and also in the matched comparison areas. Interviews of the health professionals in closure areas provide evidence suggestive of some perceived negative effects of hospital closure on these communities. These negative effects include difficulty recruiting and retaining physicians, concern of residents about the loss of their local emergency room, and increased travel times to receive hospital services. The perceived effects of closure appeared to be mediated by the distance required for travel to the nearest hospital. Respondents perceived increased travel times to most significantly affect vulnerable populations, such as the elderly, the disabled and the economically disadvantaged. Respondents in the majority of comparison areas also reported access barriers for vulnerable populations. These barriers primarily center on problems of obtaining transportation and enduring the rigors of travel. Improvements in the availability of transportation to medical care may offer some stabilization to communities where hospitals closed; however, it also is the case that transportation improvements are needed to increase access to care in rural communities where hospitals remained open.     

公立医院战略绩效管理体系概念框架研究

探讨了开展公立医院战略绩效管理的必要性,剖析了当前公立医院绩效管理的弊端及实质,结合对战略绩效管理理论和医院战略绩效内涵特征的分析,提出了集本质特征、功能定位和未来发展于一体的,包含了2个层面、4个模块和7个循环子系统的公立医院战略绩效管理体系概念框架。     

Strategic planning processes and hospital financial performance

Many common management practices in healthcare organizations, including the practice of strategic planning, have not been subject to widespread assessment through empirical research. If management practice is to be evidence-based, evaluations of such common practices need to be undertaken. The purpose of this research is to provide evidence on the extent of strategic planning practices and the association between hospital strategic planning processes and financial performance. In 2006, we surveyed a sample of 138 chief executive officers (CEOs) of hospitals in the state of Texas about strategic planning in their organizations and collected financial information on the hospitals for 2003. Among the sample hospitals, 87 percent reported having a strategic plan, and most reported that they followed a variety of common practices recommended for strategic planning-having a comprehensive plan, involving physicians, involving the board, and implementing the plan. About one-half of the hospitals assigned responsibility for the plan to the CEO. We tested the association between these planning characteristics in 2006 and two measures of financial performance for 2003. Three dimensions of the strategic planning process--having a strategic plan, assigning the CEO responsibility for the plan, and involving the board--are positively associated with earlier financial performance. Further longitudinal studies are needed to evaluate the cause-and-effect relationship between planning and performance.     

公立医院治理结构变革对战略绩效管理的影响研究

公立医院治理结构是实施战略绩效管理的前提和基础。当前公立医院治理的困境是导致绩效管理体系不健全的根本原因。公立医院法人治理结构的变革将理顺战略绩效管理体系,赋予其明确的战略目标和绩效管理责任。