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Adoption and Perceived Effectiveness of Financial Improvement Strategies in Critical Access Hospitals

Authors

  • George M. Holmes PhD,

    1. Department of Health Policy and Management, UNC Gillings School of Global Public Health, Chapel Hill, North Carolina
    2. North Carolina Rural Health Research and Policy Analysis Center, Sheps Center for Health Services Research, University of North Carolina, Chapel Hill, North Carolina
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  • George H. Pink PhD

    1. Department of Health Policy and Management, UNC Gillings School of Global Public Health, Chapel Hill, North Carolina
    2. North Carolina Rural Health Research and Policy Analysis Center, Sheps Center for Health Services Research, University of North Carolina, Chapel Hill, North Carolina
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  • The authors gratefully acknowledge Roger Thompson who provided valuable advice and expertise. This work was funded through a cooperative agreement with the federal Office of Rural Health Policy, Health Resources and Services Administration, US Department of Health and Human Services (PHS Grant No. U27RH01080). For further information, contact: George M. Holmes, PhD, 1104B McGavran-Greenberg Hall, Department of Health Policy and Management, UNC Gillings School of Global Public Health, Campus Box 7411, Chapel Hill, NC 27599-7411; e-mail mark_holmes@unc.edu.

Abstract

Purpose: To ascertain the use and perceived success of strategies to improve the financial performance of Critical Access Hospitals (CAHs).

Methods: Information about the use and perceived effectiveness of 44 specific strategies to improve financial performance was collected from an online survey of 291 CAH Chief Executive Officers and Chief Financial Officers. Responses were merged with financial and operational characteristics of the respondents’ hospitals obtained from Medicare cost reports. Use rates and perceived success and failure were calculated for each strategy. A cluster analysis was applied to classify strategies based on their use and success. Finally, CAH characteristics were examined to predict the use of individual strategies.

Findings: Financial improvement strategies are pervasive among CAHs. The administrators who responded to the survey in this study reported using an average of 17.0 of the maximum 44 strategies listed in the survey questionnaire. Revenue/cost, human resource, and capital strategies were more frequently used than service expansion and reduction strategies. Overall, CAH characteristics did not explain the use or perceived success of specific strategies, but they did partially predict the number of strategies attempted.

Conclusions: CAH administrators have used multiple strategies to improve financial performance with a wide variety of reported success. More research into the effectiveness of specific interventions is needed to help administrators select evidence-based strategies.

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