Variations in Financial Performance Among Peer Groups of Critical Access Hospitals

Abstract

Among the large number of hospitals with critical access hospital (CAH) designation, there is substantial variation in facility revenue as well as the number and types of services provided. If these variations have material effects on financial indicators, then performance comparisons among all CAHs are problematic. To investigate whether indicators of financial performance and condition systematically vary among peer groups of CAHs. Suggestions from CAH administrators, a literature review, expert panel advice, and statistical analysis were used to create peer groups based on whether a CAH: (1) had less than $5 million, $5-10 million, or over $10 million in net patient revenue; (2) was owned by a government entity; (3) provided long-term care; and (4) operated a provider-based Rural Health Clinic. Significant differences in financial performance and condition exist among CAH peer groups. CAHs should ensure that they use appropriate peer comparators when assessing their financial performance and condition. If quality, outcome, safety and access are affected by financial performance and condition, it may also be important for research in these areas to control for peer group differences among CAHs.