Organizational structure within multi-hospital systems in rural America effect on financial performance

Considering the increasing challenges to providing access to affordable healthcare in the United States and its effect on the economy, it is critical for patients, healthcare organizations, financial institutions, and federal and state agencies to understand the impact of different organizational structures within affiliated hospitals. The objective of this study was to investigate the impact of different organizational structures within rural multi-hospital systems (MHS) on the hospitals’ financial performance. The data for this study were drawn from the 2020 American Hospital Association (AHA) Annual Survey. The AHA survey provided information on rural hospitals’ organizational structure and financial information. The three financial measures used were 1) operating margin, 2) return on equity (ROE), and 3) days cash on hand. There were 757 hospitals in the financial indicators pool. The financial indicators showed that there are significant variations within days cash on hand and the types of MHS organizational structures. It was concluded that there was a significant relationship related to centralized and decentralized days cash on hand, with decentralized MHS having the lowest days cash on hand (32.63 days). • 768 rural hospitals in the U.S. face closure risks. • Decentralized MHS was found to have the lowest days cash on hand of 32.63 days. • Rural hospitals suffered greatly in states that did not adopt the Medicaid expansion.