Small Hospitals with Positive Cash Flow: Why are they Winners?

Abstract

This study evaluates the cash flow performance of hospitals that are at a greater risk of closure, specifically small hospitals. Sampling the majority of small acute-care hospitals in the United States, the study evaluates urban and rural small hospitals with positive cash flows for four consecutive fiscal periods and compares them with urban and rural hospitals with consecutive negative cash flows. In both urban and rural settings, positive cash flow small hospitals operate under a not-for-profit form of ownership and have lower operating costs, a faster collection of receivables. They also own newer, larger facilities, possess a Medicare higher case mix index, and offer more services in markets with lower per capita income.