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

Authors

  • Stephen S. Mick PhD,

    1. Mick is with the Department of Health Services Management and Policy of the School of Public Health at the University of Michigan in Ann Arbor, MI.
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  • Laura L. Morlock PhD,

    1. Morlock is with the Department of Health Policy and Management of the School of Hygiene and Public Health at Johns Hopkins University in Baltimore, MD.
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  • David Salkever PhD,

    1. Salkever is with the Department of Health Policy and Management of the School of Hygiene and Public Health at Johns Hopkins University in Baltimore, MD.
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  • Gregory de Lissovoy PhD,

    1. de Lissovoy is with the Department of Health Policy Management of the School of Hygiene and Public Health at Johns Hopkins University in Baltimore, MD.
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  • Faye Malitz MAS,

    1. Malitz is with the Department of Health Policy Management of the School of Hygiene and Public Health at Johns Hopkins University in Baltimore, MD.
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  • Christopher G. Wise PhD,

    1. Wise is with the Department of Health Services Management and Poliy of the School of Public Health at the University of Michigan in Ann Arbor, MI.
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  • Alison Jones PhD

    1. Jones is with Arizona State University in Tempe, AZ.
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ABSTRACT:

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.

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