Publication Date: Apr 2020
Author(s): CAH Financial Indicators Team
Research Center(s): North Carolina
Project: Analyzing Financial and Operational Performance of CAHs
Under the Medicare Rural Hospital Flexibility (Flex) Program, states with Critical Access Hospitals (CAHs) are eligible to receive federal funds to support hospital improvement. This study finds:
• Compared to CAHs with no participation, CAHs with two years of participation and three years of participation showed increases in total margin of 1.60 and 3.95 percentage points, respectively.
• Compared to CAHs with no participation, CAHs with three years of participation showed a 3.16 percentage point increase in operating margin.
• We found no evidence that one year of participation improved profitability indicators, suggesting that continued participation may be necessary to see changes in financial indicators.
• Because interventions were not randomly assigned, we were unable to determine whether there was a causal relationship between participation and financial performance. Results were sensitive to model specification and should be interpreted with caution.