New Policy Brief on Effects of System Affiliation on Rural Hospitals

Date: October 19, 2021

The Flex Monitoring Team has released a new policy brief, The Association Between System Affiliation and Financial Performance in Critical Access Hospitals.

There is growing evidence to suggest that affiliation with a health system may have important implications for rural hospitals. However, most studies have not investigated the effects of system affiliation on CAHs, specifically, and it is important for hospitals and state Flex programs to anticipate the consequences and potential impact of system affiliation. The purpose of this study is to examine the association between system affiliation and the financial indicators included in the Critical Access Hospital Measurement and Performance Assessment System (CAHMPAS).

Data on system affiliation in 2018 were drawn from the Medicare Cost Reports in the Healthcare Cost Reporting Information System (HCRIS) and from the American Hospital Association (AHA) Annual Survey. Data on hospital financial performance, size, ownership, and operation of long-term care or rural health clinics in 2018 came from HCRIS. The final sample included 1,360 CAHs, 582 of which were identified as being affiliated with a health system and 778 of which were identified as not being affiliated.

Consistent with previous studies of rural hospitals generally, results from this analysis showed that system affiliation is significantly associated with CAH financial performance. On average, system affiliation was associated with stronger financial performance.

View Policy Brief