Mixed Evidence That Rural Hospitals’ Finances Improved With Participation In The Pennsylvania Rural Health Model

The voluntary Pennsylvania Rural Health Model (PARHM) provided participating rural hospitals with global budgets rather than traditional fee-for-service payments to improve financial stability. Whether participation in PARHM was associated with financial improvements is unknown. In this synthetic difference-in-differences study from the period 2014-23, we estimated changes in rural hospital finances associated with PARHM participation among seventeen PARHM participants and forty nonparticipating Pennsylvania comparison hospitals. In unadjusted models, participation was associated with a 4.5-percentage-point differential increase in operating margins and a 4.7-percentage-point differential increase in total margins; however, these changes were nonsignificant in adjusted models (3.0 and 3.2 percentage points, respectively). Results were similar when we compared PARHM participants with 160 border-state comparison hospitals and when we used alternative difference-in-differences estimators. These findings offer mixed evidence that global budgets may help stabilize rural hospital finances in the short term.