Acquisition of Small Rural Hospitals by Multihospital Systems*

Abstract

The occurrence of multihospital systems, two or more hospitals owned, leased, or managed by a separate organization, represents a note-worthy change in the way health care is organized today. The impact of this for small rural hospitals, however, has only been studied indirectly or anecdotally. This investigation, using data from national surveys, systematically documents and analyzes this trend and discusses its potential impact. By 1983 almost one quarter of all small rural hospitals were affiliated with multihospital systems. This growth occurred primarily over the last few years, and was accompanied by a rapid surge in the involvement of for-profit systems. This contrasts sharply with traditional rural hospital care which had been provided primarily by nonprofit or religious institutions. There also were differences in the form of affiliation the hospitals had with their parent organizations, with the most recent movement toward management contracts. Differential changes also occurred in the patterns of affiliation by geographic region.