Financial performance of rural hospitals persistently lacking or having telehealth technology

Abstract

Background: Rural hospitals experience financial pressures that threaten their ability to continue operations and provide accessible quality healthcare services. To ensure the delivery of patient care to rural residents some rural hospitals have adopted telehealth technology. Although telehealth has been cited to have several positive outcomes, there is variation in telehealth adoption by rural hospitals. The purpose of this study is to determine the factors associated with telehealth adoption and to compare the financial condition of rural hospital telehealth adopters and non-adopters. Methods: A longitudinal retrospective cohort study design using a panel dataset (2009 to 2019) was used to compare rural hospital telehealth adopters and non-adopters, using data from the American Hospital Association (AHA) Annual Survey and Information Technology Supplement, Centers for Medicare & Medicaid Services cost report data, and the Area Health Resource File. A logistic regression model was estimated to examine hospital and community characteristics associated with telehealth adoption and a pooled ordinary least squares regression with robust standard errors was estimated to examine the association between telehealth adoption and financial performance. Results: The results indicate that rural hospital telehealth adoption is associated with hospital and community characteristics. Telehealth adoption by rural hospitals was less likely for government and for-profit hospitals, hospitals with greater Medicare patients, and hospitals in counties with a larger percentage of people <65 years without health insurance. The results further indicate that over the 11-year time period, the financial performance of rural hospital telehealth adopters was substantially better than rural hospital telehealth non-adopters, in both operating margin (6.92 percentage points) and total margin (2.18 percentage points). Conclusions: Access to financial capital, along with hospital and community factors, may influence capital investment decisions made by rural hospitals. Unfortunately, rural hospitals facing financial difficulty may be unable to commit the monetary resources to telehealth adoption. Understanding factors leading to telehealth adoption decisions and their financial implications can assist with developing policies to reduce inequity among rural hospitals and increase access to necessary services for rural patients.