Implications Of The Balanced Budget Act On Rural Hospitals PDF Download

The Balanced Budget Act of 1997 allows qualified rural hospitals in the United States to convert to Critical Access Hospital (CAH) status. In order to aid Medicare reimbursement rates, CAHs receive cost-based reimbursement for Medicare patients. However, the overall improvement in financial indicators of CAHs remains unclear. Therefore, this analysis has three goals: - To compare the financial performance of Pennsylvania CAHs and rural hospitals. - To assess the evidence of the effects of conversion on financial performance. - To identify factors affecting financial performance. Rural hospitals are classified as rural hospitals that are not eligible to convert to CAH status or elected not to convert. Prior research on CAHs is limited and focuses primarily on quality assessment and quality indicators. Additionally, no prior research examines the financial indicators of CAHs in Pennsylvania. As a result of this analysis, rural hospitals in Pennsylvania considering a conversion to CAH status will be able to project likely financial impacts. Policymakers will also be able to compare the financial indicators of CAHs to other rural hospitals in Pennsylvania to determine if the Balanced Budget Act of 1997 is achieving its desired impact in Pennsylvania. Descriptive statistics are utilized to assess the financial performance of hospitals and the effects of conversion by examining the change in financial indicators in the two years before and after conversion. A repeated measures analysis of variance identifies factors associated with the financial indicators of CAHs in Pennsylvania compared to rural hospitals before and after conversion to CAH status. Using a general linear model, this analysis examines the effect of adjacency to a metropolitan county and net patient revenue on financial performance.