Importance of Surgery to Rural Hospital Financial Condition and Market Share

Project funded:
September 2009
Project completed:
March 2011
Anecdotal evidence supports the notion that the viability of many rural hospitals is strongly affected by their offering surgical services. Recent studies showing a decline in the general surgery workforce in rural areas have reignited concern regarding the stability of rural hospitals and access to care for rural residents. The hypothesized relationship between provision of surgical services and institutional viability has potential implications for workforce planning and reimbursement policy. Federal physician workforce policy has, to date, only focused on primary care physicians as they were considered a key element in access to health care for rural residents. If the contraction in the supply of general surgeons is creating problems for access to specialized services for rural residents, this may prompt the federal government to direct resources to reduce the outflow of general surgeons through incentive programs for institutions or individuals.

This study explores the current provision of surgical services in rural hospitals. Questions answered will include the percentage of rural hospitals that offer surgical services; the number that have discontinued or cut back on surgical services over the last decade; whether the presence or absence of surgical services is related to market characteristics such as size, proximity to a larger hospital, or remoteness; and, whether discontinuation of surgical services result in a change in hospital profitability, liquidity, capital structure, and/or market area. Products from this project will include a final report, a Findings Brief, and a paper for submission to a peer-reviewed journal.