Prediction of Financial Distress among Rural Hospitals Research Brief Released
From 2005 through 2015, more than 100 rural hospitals have closed their doors to patients in need of inpatient services. To better understand factors affecting rural hospital financial distress and to develop an early warning system to identify hospitals at risk of distress, the North Carolina Rural Health Research Program developed the Financial Distress Index (FDI). The FDI model forecasts the risk of distress in two years using the most currently available hospital financial performance, government reimbursement, organizational characteristics and market characteristics. The objective of the brief, Prediction of Financial Distress among Rural Hospitals, is to: 1) describe the ability of the FDI model to identify a group of rural hospitals facing an increased closure rate and 2) evaluate the potential impact drivers of the FDI model may have on the percent of hospitals at high risk of financial distress and closure.
George Pink, PhD
North Carolina Rural Health Research and Policy Analysis Center