The adoption of provider-based rural health clinics by rural hospitals: a study of market and institutional forces

Abstract

Objective: To examine the response of rural hospitals to various market and organizational signals by determining the factors that influence whether or not they establish a provider-based rural health clinic (RHC) (a joint Medicare/Medicaid program).

Data sources/study setting: Several secondary sources for 1989-1995: the AHA Annual Survey, the PPS Minimum Data Set and a list of RHCs from HCFA, the Area Resource File, and professional associations. The analysis includes all general medical/surgical rural hospitals operating in the United States during the study period.

Study design: A longitudinal design and pooled cross-sectional data were used, with the rural hospital as the unit of analysis. Key variables were examined as sets and include measures of competitive pressures (e.g., hospital market share), physician resources, nurse practitioner/physician assistant (NP/PA) practice regulation, hospital performance pressures (e.g., operating margin), innovativeness, and institutional pressure (i.e., the cumulative force of adoption).

Principal findings: Adoption of provider-based RHCs by rural hospitals appears to be motivated less as an adaptive response to observable economic or internal organizational signals than as a reaction to bandwagon pressures.

Conclusions: Rural hospitals with limited resources may resort to imitating others because of uncertainty or a limited ability to fully evaluate strategic activities. This can result in actions or behaviors that are not consistent with policy objectives and the perceived need for policy changes. Such activity in turn could have a negative effect on some providers and some rural residents.