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Hospital Choice by Rural Medicare Beneficiaries: Does Hospital Ownership Matter? - A Colorado Case

Author: CHUL-YOUNG ROH and KEON-HYUNG LEE
Published in JHHSA, Vol. 28 No. 3

About 45 percent of rural patients in Colorado bypassed their
local rural hospitals during the 1990s. The effect of this phenomenon is
a reduction in occupancy rates and a decrease in the competitiveness of
rural hospitals, thereby ultimately causing rural hospitals to close and
adversely affecting the communities that they were designed to serve.
This study tests whether hospital ownership affects hospital choice by
patients after controlling for institutional and individual dimensions. A
conditional logistic regression is used to analyze Colorado Inpatient
Discharge Data (CIDD) on 85,529 patients in addition to hospital data.
Rural Medicare beneficiaries are influenced to choose a particular
hospital by a combination of hospital characteristics (the number of
beds, the number of services, accreditation, ownership type, and
distance from patient residence) and patient characteristics (medical
condition, age, gender, race, and total charge for services). Increasing
rural hospitals’ survivability, collaborating with other rural hospitals,
expanding the number of available services, making strategic alliance
with other providers are possible strategies that may help ward off
encroachment by urban competitors.

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