Rural hospital networks: implications for rural health reform

Abstract

This article summarizes the perspectives gained in the course of evaluating a 4-year demonstration program that supported rural hospital networks as mechanisms for improving rural health care delivery. Findings include: (1) joining a network is a popular, low-cost strategic response for rural hospitals in an uncertain environment; (2) rural hospital network survival is enhanced by the mutual resource dependence of members and the presence of a formalized management structure; (3) rural hospitals join networks primarily to improve cost efficiency but, on average, hospitals do not appear to realize short-term economic benefit from network membership; and (4) some of the benefits of these networks may be realized outside of the communities in which rural hospitals are located.