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- Title
Converting to Critical Access Status: How Does It Affect Rural Hospitals' Financial Performance?
- Authors
Pengxiang Li; Schneider, John E.; Ward, Marcia M.
- 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.
- Subjects
UNITED States; MEDICAL economics; RURAL hospitals; MEDICAL care financing; OPERATING revenue; HOSPITAL administration; MEDICAL care
- Publication
Inquiry (00469580), 2009, Vol 46, Issue 1, p46
- ISSN
0046-9580
- Publication type
Article
- DOI
10.5034/inquiryjrnl_46.01.46