Hospital Choice by Rural Medicare Beneficiaries: Does Hospital Ownership Matter? - A Colorado Case

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About 45 percent of rural patients in Colorado bypassed their local rural hospitals during the 1990s. The effect of this phenomenon is a reduction in occupancy rates and a decrease in the competitiveness of rural hospitals, thereby ultimately causing rural hospitals to close and adversely affecting the communities that they were designed to serve. This study tests whether hospital ownership affects hospital choice by patients after controlling for institutional and individual dimensions. A conditional logistic regression is used to analyze Colorado Inpatient Discharge Data (CIDD) on 85,529 patients in addition to hospital data. Rural Medicare beneficiaries are influenced to choose a particular hospital by a combination of hospital characteristics (the number of beds, the number of services, accreditation, ownership type, and distance from patient residence) and patient characteristics (medical condition, age, gender, race, and total charge for services). Increasing rural hospitals' survivability, collaborating with other rural hospitals, expanding the number of available services, making strategic alliance with other providers are possible strategies that may help ward off encroachment by urban competitors.