The changing face of rural Catholic hospitals

Socioeconomic trends and developments within the U.S. healthcare system have challenged rural hospitals' ability to maintain adequate operating margins and offer needed services. However, some hospitals have fared better in this negative environment than have others. To clarify factors that distinguish the most viable rural Catholic hospitals from the least viable, our study identified a group of 30 "consistently sound" hospitals and 30 "adversely affected" hospitals based on profit margins and six other financial measures. As a group, rural hospitals suffered from declining inpatient utilization, increasing levels of indigency, and adverse reimbursement. However, the consistently sound hospitals' margins increased to 11 percent form 1985 to 1989, whereas margins at adversely affected hospitals fell nearly 8 percentage points during the same period. Adversely affected hospitals were less likely to belong to a system and had significantly fewer average staffed beds than did the consistently sound facilities. Their communities had significantly lower per capita income, and they devoted a greater percentage of their resources to care for the poor. Adversely affected hospitals also reduced the scope of available services more drastically than did consistently sound hospitals during the period under study.