What is Causing the Increase in Rural Hospital Costs?
This project examines why reported costs per Medicare discharge have risen faster at rural hospitals than at urban hospitals and what factors contribute to the wide variance in costs among rural hospitals. Using Medicare Cost Report data for 1995-2000, we create a model for explaining changes in hospital costs. Our model is based on the assumption that hospital boards want to improve the quality of care, access to care, employee compensation, and hospital profitability. Because the objective of hospital boards is assumed to stretch beyond maximizing profits, we develop a cost function that includes variables to detect differences in hospital missions and financial resources. Our model tests the degree to which key variables can explain differences in hospital costs and changes in hospital costs over time.
There may be products related to this project; please contact the lead researcher for more information.