Date of Award


Call Number

RA975.R87 S45 2012

Document Type

Bibliographic Record

Degree Name

Doctor of Philosophy in Public Policy


Muskie School of Public Service

First Advisor

Andrew Coburn

Second Advisor

David Hartley

Third Advisor

Douglas Thompson


Critical access hospitals, rural health care, rural health networks, USM Aging Initiative, Health and Wellness, Policy


Critical Access Hospitals (CAHs)are the result of a Congressional effort to financially support small rural hospitals to assure access to basic health services. CAHs have unique problems: distant and isolated rural location, difficulty recruiting and retaining staff, a small number of beds with low utilization, limited access to capital and limited technology, and a lower per capita income and more elderly population. The legislation that created CAHs contains a requirement that CAHs develop rural health networks, something many policymakers and academics believed would enable small rural providers to gain economies of scale and scope, and thereby become more financially stable. Several past studies supported this policy; however, some studies found no improvement and often negative effects of networking on hospital margins. All of these studies were conducted before Critical Access designation, and the average hospital bed size was larger than that of CAHs. This study examined the relationship of organizational affiliation on rural CAH profitability in 2004. The study is a cross-sectional examination of 463 Critical Access Hospitals’ profitability in 2004, comparing CAHs in networks, health systems, and those that are independently operated. Using descriptive and multiple regression analyses, the findings demonstrated no significant differences in the financial performance of CAHs in networks when compared to independently operated CAHs and those that are part of health systems. However, health system CAHs had higher cash flow margins than independent hospitals. Further analysis suggests that although CAHs in health systems have better cash flow margins than independently operated CAHs, they do not have increased access to technology or specialty services. The increased cash is a result of controlling costs rather than increasing revenue. Further analysis examined specific factors that contribute to differences in profitability across the three categories of hospitals. Understanding the factors that contribute to the financial performance of CAHs is critical to informing policymakers and others on steps that could be taken to strengthen policies target to CAHs.