WASHINGTON – A new analysis conducted by Dobson | DaVanzo, an independent health economics and policy consulting firm, and commissioned by the Coalition to Strengthen America’s Healthcare, finds that hospital integration can offer small rural hospitals more financial security and resources, preserving patients’ access to care in rural areas.
“Whether a financially vulnerable rural hospital chooses to affiliate with, merge with, or be acquired by a larger hospital system, the trend remains the same – aligning with a larger hospital system improves the financial viability of rural hospitals, which allows them to stay open and serve the community and surrounding area,” the report finds.
Key takeaways from the report include:
- Although not necessarily the right choice for all hospitals and communities, aligning with a larger health system can offer a lifeline for rural hospitals that can protect patients’ access to critical care around the clock.
- A majority (55%) of rural hospitals that closed between 2011 and 2021 were standalone hospitals that lacked the support of a larger hospital system.
- Hospital finances can stabilize and improve after aligning with a system. One in three hospitals that were at high risk of closure were no longer high-risk following merger or acquisition. Two in three hospitals that were at high risk of closure were no longer high-risk following affiliation.
- Combining or affiliating with hospital systems was most beneficial to hospitals at the greatest risk of closure due to financial challenges. 18% of hospitals that affiliated with, merged with, or were acquired by a larger hospital system had previously been at high risk of closure.
- Prior to merger or acquisition, rural hospitals saw average total margins of 1.8%, which rose to 2.2% following merger or acquisition. Prior to affiliation, rural hospitals saw average total margins of 1.5%, compared to 2.3% post-affiliation.
- In addition to helping preserve access to care, integration can also benefit patients and communities by addressing staffing shortages, providing logistical support, standardizing care protocols that improve patient health outcomes, and updating technology and spurring innovation that enhances quality of care and reduces costs.
The analysis shows that hospital integration can preserve access to care for rural communities. Policymakers should take into consideration the many benefits that systems provide to rural hospitals and the patients they serve.
Read the full report HERE.