One of the objectives of the Flex program is to provide a greater degree of financial stability for CAHs through the use of cost-based reimbursement. Making use of the financial indicators developed by project staff, the focus of this project is a longitudinal analysis of the dimensions and indicators of financial performance pre- and post-conversion. Care will be taken to consider only those indicators and dimensions that are directly comparable under PPS and cost-based reimbursement are considered. Although there has been some work on the effect of conversion, it has mostly been limited to effect on average margins. One of the central tenets of our work on this project is that the financial health of the hospital must be evaluated comprehensively on a multitude of factors and not simply total or operating margin. Descriptive analyses are used to capture changes in all dimensions of financial performance. The product from this project is a report and accompanying Findings Brief that will be distributed to policymakers.

Publications

• Impact of Conversion to Critical Access Hospital Status on Hospital Financial Performance and Condition
  Policy Brief
  North Carolina Rural Health Research and Policy Analysis Center
  Date: 11/2006
  This policy brief analyzes financial ratios associated with critical access hospitals' profitability, liquidity, and capital structure.