Rural Hospital Mergers from 2005 through 2016

Date
08/2018
Description

Hospital mergers and acquisitions are changing the face of healthcare in both rural and urban communities across the country. There are many factors driving mergers, such as cost savings, increased access to capital, increased access to technology, etc., but concerns about rural hospital mergers have also been voiced, including reduced negotiating power with insurers, outsourcing of support services, centralized administration, greater use of agency versus full-time local nurses, and other actions to lower expenses and boost margins. Regardless, many industry analysts see the pace of mergers continuing. Given the trend toward greater consolidation and the potential impact on rural communities, the purpose of this study was to describe the number and geographic distribution of 380 rural hospital mergers from 2005 through 2016.

This study found that mergers have been a common phenomenon among rural hospitals. Approximately 12% of all rural hospitals merged from 2005 through 2016. The number of mergers increased steadily from 2009 through 2014 and then dropped in 2015 and 2016. Mergers have been geographically concentrated. More than half of all rural hospital mergers occurred in 11 states. More than half of all rural hospital mergers were in the South, but other geographic patterns are not apparent.

These findings support the need for further research investigating why so many rural hospitals are merging, the financial impact of merging, and the impact on access to care within rural communities.

Center
North Carolina Rural Health Research and Policy Analysis Center
Authors
Dunc Williams Jr, Sharita Thomas, Hilda Howard, George Pink