Association of Telehealth Technology and Financial Performance in Rural Hospitals

Research center:
Project funded:
September 2020
Anticipated completion date:
December 2021

The overall goal of the proposed evaluation is to generate associations between adoption of telehealth technology and measures of hospital financial performance, measured using operating margin and patient revenue per discharge. The primary hypothesis is the adoption of telehealth technology has a positive impact on hospital revenue and improves the hospital overall operating margin.

To test the primary hypothesis, the study team will organize American Hospital Association (AHA) hospital data on telehealth adoption (which is a binary variable) and combine it with hospital financial data from the Centers for Medicare & Medicaid Services cost reports. The data will be organized to allow statistical analysis using a difference-in-difference (DID) framework that is frequently used for policy analysis. Under a DID approach, treatment hospitals (those that adopt specific telehealth technology) will be compared to control hospitals (non-adopters) before and after adoption. All rural hospitals in the analysis will have a rural hospital designation, thus the results of the analysis provide estimates of how financial performance changed for rural hospitals adopting telehealth technology compared to rural hospitals that did not adopt. The AHA database does not contain information about the telehealth system. The study will use hospitals' information technology capability (available in AHA database) as a proxy for telehealth systems as a control in this research aim. Additionally, the study will control for a number of telehealth services a hospital offers in the model.