Evaluating the Success of the Flex Program in Reaching Vulnerable Rural Hospitals Open Access

Abstract

Rural hospitals in the United States are at high risk of closure, and federal funding to support them is limited. The Flex Monitoring Program and accompanying critical access hospital designation is a federal program that aims to support low-volume rural hospitals and prevent them from closing through its cost-based reimbursement and state grants. Evidence supports the Flex Program's success in improving the financial status of those hospitals which receive critical access designation. But the question still remains as to whether the most vulnerable, most financially unstable rural hospitals are receiving critical access designation. Low-volume, rural control hospitals were compared against critical access hospitals, specifically in the years before their designation. A fixed effects linear regression was run on financial indicators such as operating margin and current ratio, using an outcome variable of critical access status. Results indicate that hospitals with lower operating margins, higher current ratios, lower net income, and fewer total operations were more likely to become critical access hospitals. Therefore, the critical access hospital designation is, on average, targeting the most vulnerable rural hospitals. The Flex Program is successfully supporting those hospitals most at risk of closure and proves to be a both effective and efficient policy.

Table of Contents

Introduction

Background

Literature Review

Data

Methods

Results

Discussion

Conclusion

About this Honors Thesis

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School	Emory College
Department	Economics
Degree	B.A.
Submission	Honors Thesis
Language	English
Research Field	Economics, General Health Sciences, Public Health Health Sciences, Health Care Management
Keyword	key performance indicators healthcare policy FLEX program rural health critical access hospital
Committee Chair / Thesis Advisor	Ian McCarthy, Emory University
Committee Members	Michelle Lampl, Emory University David Howard, Emory University

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