Rural Hospitals' Access to Capital

There is a concern that rural hospitals have difficulty obtaining loans to update their aging buildings and equipment. Medicare cost report data show that rural hospitals tend to have lower levels of debt and slightly older facilities than urban hospitals. The purpose of this project is to examine why rural hospitals borrow less and have older facilities. For example, rural hospitals may lack access to capital and/or choose to borrow less due to an inability to earn a reasonable return on capital improvements. To analyze the adequacy of capital markets, we will examine both private capital markets and existing government loan programs. This will be the first study to take an integrated approach to examining federal loan programs, state loan programs, grant programs, hospital system funding of capital needs, and the rate of return on rural capital investments. Secondary data sources that will be used include Medicare cost reports and AHA annual survey data. Primary data sources include surveys of state hospital associations and Departments of Health and structured interviews with representatives of public and private sector lenders. This project is completed.

There may be products related to this project; please contact the lead researcher for more information.