Factors Influencing Rural Hospitals’ Decisions To Join An Alternative Payment Model

Abstract

• Study examines factors influencing rural hospitals' decisions to join Pennsylvania Rural Health Model (PARHM).

• Mixed-methods approach: quantitative analysis of hospital characteristics, qualitative interviews with administrators.

Key Findings

• Participating hospitals had:

  • Smaller total margins

  • Fewer inpatient discharges

  • Greater independence compared to nonparticipants.

• Factors influencing participation:

  • Desire for financial stability

  • Independence from larger systems.

• Concerns for nonparticipation included operational autonomy and administrative burden.

Rural Health Context

• Rural hospitals face challenges with fee-for-service payments contributing to financial instability and service line reductions.

• Approximately 150 rural hospitals closed since 2010.

• APMs propose a solution to shift incentives towards value over volume.

Pennsylvania Rural Health Model (PARHM)

• A voluntary program starting in 2017 to improve rural hospital financial viability.

• Participating hospitals receive global budget payments and develop transformation plans.

• In total, 67 hospitals were eligible; 18 participated between 2019-2021.

Qualitative Analysis Overview

• Interviews conducted with hospital administrators to gather insights into decision-making processes.

• Key themes emerged around financial stability, independence, and value-based care motivations.

Quantitative Analysis Overview

• Data from PHC4 and American Community Survey for hospital characteristics from 2016-2018.

• Comparative analysis between participating and non-participating hospitals to identify trends and significance in characteristics.

Limitations

• PARHM being a single-state program may limit generalizability.

• Interviews primarily with administrators, potentially introducing bias.

• Impact of COVID-19 overlapped with the study timeline.