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Unlike total health care spending in Canada, which has increased steadily over the past 20 years, capital investment (that supports infrastructure and technology) has both varied more and declined in recent years, suggesting underinvestment and inequity in health care capital. Canada's health system is particularly vulnerable to fluctuations in capital spending because the cycles for capital investment are longer than our political cycles. For the most part, use of capital instruments in Canada has not been innovative, and there are fewer studies on financing models in Canadian health care than in other countries. Canada needs greater expertise in capital investment and further research to increase regular use of innovative financial tools.

From January 2005 through December 2015, 105 rural hospitals closed. This study examined associations between community characteristics and rural hospital closure. Compared with other rural hospitals that were at high risk of financial distress but remained open over the same time period, closed rural hospitals had a smaller market share (p < .0001) despite being in areas with higher population density (p < .05), were located nearer to another hospital (p < .0001), and were located in markets that had a higher rate of unemployment (p < .05) and a higher percentage of Black (p < .05) and Hispanic (p < .01) residents. These results have three implications for rural health policy: rural hospital closures may disproportionately affect racial and ethnic minorities, community characteristics in combination with other factors make it likely that rural hospital closures will continue, and rural hospital closures illuminate the need for new models of reimbursement and health care delivery to meet the needs of rural communities.

The objective of this study is to determine whether key hospital-level financial and market characteristics are associated with whether rural hospitals merge. Hospital merger status was derived from proprietary Irving Levin Associates data for 2005 through 2016 and hospital-level characteristics from HCRIS, CMS Impact File Hospital Inpatient Prospective Payment System, Hospital MSA file, AHRF, and U.S. Census data for 2004 through 2016. A discrete-time hazard analysis using generalized estimating equations was used to determine whether factors were associated with merging between 2005 and 2016. Factors included measures of profitability, operational efficiency, capital structure, utilization, and market competitiveness. Between 2005 and 2016, 11% (n = 326) of rural hospitals were involved in at least one merger. Rural hospital mergers have increased in recent years, with more than two-thirds (n = 261) occurring after 2011. The types of rural hospitals that merged during the sample period differed from nonmerged rural hospitals. Rural hospitals with higher odds of merging were less profitable, for-profit, larger, and were less likely to be able to cover current debt. Additional factors associated with higher odds of merging were reporting older plant age, not providing obstetrics, being closer to the nearest large hospital, and not being in the West region. By quantifying the hazard of characteristics associated with whether rural hospitals merged between 2005 and 2016, these findings suggest it is possible to determine leading indicators of rural mergers. This work may serve as a foundation for future research to determine the impact of mergers on rural hospitals.

Rural hospitals differ from urban hospitals in many ways. For example, rural hospitals are more reliant on public payers and have lower operating margins. In addition, enrollment in the health insurance Marketplaces of the Affordable Care Act (ACA) has varied across rural and urban areas. This study employed a difference-in-differences approach to evaluate the average effect of Medicaid expansion in 2014 on payer mix and profitability for urban and rural hospitals, controlling for secular trends. For both types of hospitals, we found that Medicaid expansion was associated with increases in Medicaid-covered discharges. However, the increases in Medicaid revenue were greater among rural hospitals than urban hospitals, and the decrease in the proportion of costs for uncompensated care were greater among urban hospitals than rural hospitals. This preliminary analysis of the early effects of Medicaid expansion suggests that its financial impacts may be different for hospitals in urban and rural locations.

The implementation of the Affordable Care Act has led to a large decrease in the number of uninsured people. Yet uncompensated care will still occur, particularly in states where eligibility for Medicaid is not expanded. We compared rural hospitals in Medicaid expansion and nonexpansion states in terms of the amount of uncompensated care they provided and their profitability and market characteristics in 2013. We found that rural hospitals in expansion states provided more dollars of uncompensated care than those in nonexpansion states and that the difference was at least partly driven by greater uncompensated costs associated with public programs such as Medicaid. We found higher dollar values of unrecoverable debt and charity care among non-critical access rural hospitals in nonexpansion states than among those in expansion states. Compared to hospitals in expansion states, those in nonexpansion states provided greater amounts of uncompensated care as a percentage of revenues and appeared to be more financially vulnerable; thus, these hospitals may be more likely to experience financial pressure or losses. Policy makers need to formulate strategies for maintaining access to care for rural populations residing in nonexpansion states.

Since the inception of the Medicare Rural Hospital Flexibility Program in 1997, over 1,300 rural hospitals have converted to critical-access hospitals, which entitles them to Medicare cost-based reimbursement instead of reimbursement based on the hospital prospective payment system (PPS). Several changes to eligibility for critical-access status have recently been proposed. Most of the changes focus on mandating that hospitals be located a certain minimum distance from the nearest hospital. Our study found that critical-access hospitals located within fifteen miles of another hospital generally are larger, provide better quality, and are financially stronger compared to critical-access hospitals located farther from another hospital. Returning to the PPS would have considerable negative impacts on critical-access hospitals that are located near another hospital. We conclude that establishing a minimum-distance requirement would generate modest cost savings for Medicare but would likely be disruptive to the communities that depend on these hospitals for their health care.

The number of rural hospital mergers has increased substantially in recent years. A commonly reported reason for merging is to increase access to capital. However, no empirical evidence exists to show whether capital expenditures increased at rural hospitals after a merger. We used a difference-in-differences approach to determine whether total capital expenditures changed at rural hospitals after a merger. The comparison group (rural hospitals that did not merge during the 2012 through 2015 study period) was weighted using inverse probability of treatment weights. The key outcome measure was logged total capital expenditures.Merging resulted in a 26% increase in capital expenditures and also was associated with a significant improvement in plant age. The postmerger improvement in plant age may have been partially attributable to merger-related accounting changes and partially attributable to increased capital expenses, possibly on long-term asset renovations and replacement.These findings suggest that through mergers, rural hospital board members and executives who have accepted or are considering a merger may improve a hospital's ability to increase capital expenditures. Further, increased capital investments in rural hospitals may be an important signal to the community that the acquirer intends to keep the rural hospital open and continue providing some volume and level of services within the community. Future research should determine how capital is spent after a merger.

Leaders are best positioned for strategically powerful decisions when they approach challenges with a firm grasp of the most pertinent tools of finance. Rich with examples, both real and fictional, this book makes the practical application of abstract concepts comprehensible. This edition has been updated to reflect the December 2017 federal tax bill. Gapenski's Understanding Healthcare Financial Management offers a practical introduction to the useful concepts that every healthcare decision-maker needs to know, giving leaders a real advantage as they face some of the most consequential choices of their careers.

Borrowing, earning, spending, forecasting, monitoring, and budgeting--all of these financial activities are woven into virtually every major decision a healthcare institution makes.Leaders are best positioned for strategically powerful decisions when they approach challenges with a firm grasp of the most pertinent tools of finance.

The objective of this study was to investigate the effect of the Magnet Recognition (MR) signal on hospital financial performance. MR is a quality designation granted by the American Nurses Credentialing Center (ANCC). Growing evidence shows that MR hospitals are associated with various interrelated positive outcomes that have been theorized to affect hospital financial performance.In this study, which covered the period from 2000 to 2010, we applied a pre-post research design using a longitudinal, unbalanced panel of MR hospitals and hospitals that had never received MR designation located in urban areas in the United States. We obtained data for this analysis from Medicare's Hospital Cost Report Information System, the American Hospital Association Annual Survey Database, the Health Resources & Services Administration's Area Resource File, and the ANCC website. Propensity score matching was used to construct the final study sample. We then applied a difference-in-difference model with hospital fixed effects to the matched hospital sample to test the effect of the MR signal, while controlling for both hospital and market characteristics.According to signaling theory, signals aim to reduce the imbalance of information between two parties, such as patients and providers. The MR signal was found to have a significant positive effect on hospital financial performance. These findings support claims in the literature that the nonfinancial benefits resulting from MR lead to improved financial performance. In the current healthcare environment in which reimbursement is increasingly tied to delivery of quality care, healthcare executives may be encouraged to pursue MR to help hospitals maintain their financial viability while improving quality of care.