Literature DB >> 10312014

Urban and rural hospitals: how do they differ?

J M Hatten, R E Connerton.   

Abstract

When the Health Care Financing Administration implemented the Medicare prospective payment system (PPS), the payment rates for inpatient hospital operating costs were derived on an urban and rural basis within each region. The rates were also adjusted for area wage levels and other factors affecting hospital costs. The effect of PPS on rural hospitals is of widespread interest. This article provides data on rural and urban hospital facilities, utilization, and charges, as of April 1985. Almost 48 percent of the 5,821 short stay hospitals included in the PPS recalibration file for Federal fiscal year 1984 are located in rural areas. Rural and urban areas are designated by the Executive Office of Management and Budget or, in some instances by regulation.

Entities:  

Mesh:

Year:  1986        PMID: 10312014      PMCID: PMC4191541     

Source DB:  PubMed          Journal:  Health Care Financ Rev        ISSN: 0195-8631


Differences

Comparison of facilities and rates

Although about equal in number nationally, rural hospitals differ markedly from urban hospitals in other characteristics and utilization. Rural hospitals are much smaller—less than one-third the size of urban hospitals in average bed size (76 beds to 252 beds per hospital). Rural hospitals have about one-fourth the total number (or 2.6 million) of Medicare discharges. Rural hospitals have a utilization rate (as measured by Medicare discharges per hospital), about one-third that for urban hospitals, 945 versus 2,704. The average length of stay for rural hospitals is two days shorter per Medicare discharge (7.4 days and 9.5 days, respectively). Rural hospitals account for only 15 percent of the more than $52 billion in total inpatient charges for Medicare stays.

Charges per discharge

Total charges per discharge in rural hospitals are only slightly more than one-half (56 percent) of total charges in urban hospitals, ($3,007 versus $5,367). Ancillary charges per discharge in rural hospitals follow a similar pattern ($1,782 versus $3,072). As a percent of total charges, ancillary charges are slightly higher in rural hospitals than in urban hospitals, 59 percent and 57 percent, respectively.

Case-mix index

The average case-mix index (CMI) reflects the relative costliness of treating a mix of cases compared to a national mix of cases. For rural hospitals, the CMI is 1.0229, compared to an average of 1.1423 for urban hospitals.

State differences

Distribution of hospitals

The distribution of rural and urban hospitals by State varies widely. The District of Columbia, New Jersey, and Rhode Island are classified as completely urban and have no rural hospitals. Another 14 States have less than 50 percent of the total hospitals classified as rural hospitals. Arizona and Indiana have an equal number of each. The remaining 32 States have a higher proportion of rural hospitals than urban hospitals, with Idaho, Montana, and South Dakota having more than 90 percent of their hospitals classified as rural.

Discharges

More than 50 percent of all Medicare discharges from rural hospitals occur in just 14 of the 48 States that have rural hospitals. In three of these States— Idaho, Mississippi, and Vermont—rural hospital discharges exceed 75 percent of the total number of discharges. In contrast, fewer than 5 percent of the discharges in California, Connecticut, and Massachusetts are from rural hospitals. The range of variation in the number of Medicare discharges per hospital is large from 134 discharges per rural hospital in Alaska to 4,857 discharges per urban hospital in Delaware.

Average length of stay

Variation in the average length of stay (ALOS) is significant between States, and between rural and urban hospitals within States. New York has the longest ALOS, 13.7 days, comprised of 13.9 days for urban hospitals, and 12.2 days for rural hospitals. Short-stay hospitals in Idaho have the shortest ALOS, 6.3 days. The State of Oregon has the shortest ALOS for urban hospitals, 6.6 days, and Utah has the shortest ALOS for rural hospitals, 5.4 days. Nationally, the difference in ALOS between urban and rural hospitals is 2.1 days. Of the 48 States that have rural hospitals, 40 States have absolute differences between urban and rural hospital ALOS lower than the absolute difference for the national urban and rural ALOS. The difference in ALOS between urban and rural hospitals in the State of Idaho is a mere one-half day; the differences in the States of Alaska and Hawaii approach 3 days.

Total charges per discharge

Total charges per discharge by State for all hospitals are nearly three times higher in the District of Columbia ($8,659) than in Mississippi ($3,050). Total charges per discharge are higher in urban hospitals than in rural hospitals in every State. The differences in two States, West Virginia and New Hampshire, are minimal, where charges in rural hospitals are 80 and 94 percent of charges in urban hospitals, respectively. At the other extreme, total charges per discharge in rural hospitals in Nevada reached only 40 percent of charges in urban hospitals. The lowest total charges per discharge for urban hospitals, $3,666, are found in the State of Arkansas. The highest average charges per discharge for urban hospitals are in the District of Columbia, $8,659. Minnesota has the lowest charges per discharge, $2,347, for rural hospitals, and California has the highest, $4,734.

Ancillary charges per discharge

Ancillary charges per discharge for all hospitals by State vary by a factor in excess of three. For example, ancillary charges per discharge in Nevada ($5,276) are three times higher than in Vermont ($1,695). For rural hospitals, Minnesota ($1,255) and California ($3,049) are at the extreme ends of the range of ancillary charges per discharge, as was the case for total charges per discharge. For urban hospital ancillary charges per discharge, the range is defined by the States of New Hampshire, $2,037 and Nevada, $5,713. By State, ancillary charges as a percent of total charges for rural hospitals are characterized by less variation, with Vermont beginning the range at 45 percent, and Louisiana limiting the range at 71 percent. The range for urban hospitals extends from 43 percent in New York to 72 percent in Nevada.
Table 1

Number and percent distribution of urban and rural hospitals, by State: Federal fiscal year 1984

StateTotalUrban hospitalsRural hospitals


NumberPercentNumberPercent
United States5,8213,04152.22,78047.8
Alabama1295643.47356.6
Alaska22313.61986.4
Arizona723650.03650.0
Arkansas961919.87780.2
California48642587.46112.6
Colorado803341.34758.8
Connecticut353394.325.7
Delaware7342.9457.1
District of Columbia1111100.000.0
Florida21717781.64018.4
Georgia1666841.09859.0
Hawaii19947.41052.6
Idaho4524.44395.6
Illinois24014962.19137.9
Indiana1185950.05950.0
Iowa1302620.010480.0
Kansas1452114.512485.5
Kentucky1063028.37671.7
Louisiana1446947.97552.1
Maine451942.22657.8
Maryland534686.8713.2
Massachusetts11010494.565.5
Michigan20412460.88039.2
Minnesota1715532.211667.8
Mississippi1181512.710387.3
Missouri1517348.37851.7
Montana6346.35993.7
Nebraska991313.18686.9
Nevada241354.21145.8
New Hampshire271348.11451.9
New Jersey9494100.000.0
New Mexico491122.43877.6
New York26020277.75822.3
North Carolina1345138.18361.9
North Dakota54814.84685.2
Ohio19412664.96835.1
Oklahoma1324433.38866.7
Oregon753445.34154.7
Pennsylvania22818179.44720.6
Rhode Island1414100.000.0
South Carolina733345.24054.8
South Dakota6357.95892.1
Tennessee1476946.97853.1
Texas47124151.223048.8
Utah391641.02359.0
Vermont16212.51487.5
Virginia1025654.94645.1
Washington1055653.34946.7
West Virginia661928.84771.2
Wisconsin1456846.97753.1
Wyoming27311.12488.9

Prospective payment system recalibration file.

Table 2

Number of beds and average bed size of urban and rural hospitals, by State: Federal fiscal year 1984

StateTotalUrbanRural



Number of bedsAverage bed sizeNumber of bedsAverage bed sizeNumber of bedsAverage bed size
United States976,787168766,610252210,17776
Alabama19,34515013,8092475,53676
Alaska1,2555760120065434
Arizona10,4191458,3092312,11059
Arkansas10,8921134,9282595,96477
California82,10916978,9671863,14252
Colorado10,9781378,7942662,18446
Connecticut10,67730510,374314303152
Delaware2,0262891,408469618155
District of Columbia4,4384034,4384030
Florida50,55723347,0372663,52088
Georgia24,55214816,2272398,32585
Hawaii2,3561241,79620056056
Idaho2,884645212612,36355
Illinois55,54923146,5253129,02499
Indiana24,46520718,2543096,211105
Iowa14,8271147,9543066,87366
Kansas12,663875,9012816,76255
Kentucky15,5891478,5492857,04093
Louisiana19,82413814,7542145,07068
Maine4,6811042,7691461,91274
Maryland14,87628113,8723021,004143
Massachusetts25,24122924,572236669112
Michigan38,18318732,1322596,05176
Minnesota18,78311013,1172385,66649
Mississippi12,8581093,4712319,38791
Missouri28,24718720,8572867,39095
Montana3,696599792452,71746
Nebraska8,937903,8582975,07959
Nevada3,4091423,03323337634
New Hampshire3,2061191,9711521,23588
New Jersey29,13531029,1353100
New Mexico4,319882,2002002,11956
New York73,49328367,1263326,367110
North Carolina23,16317313,4832649,680117
North Dakota3,753701,5451932,20848
Ohio49,01425340,5633228,451124
Oklahoma14,4341098,9322035,50263
Oregon8,9981206,2611842,73767
Pennsylvania52,68623145,8982546,788144
Rhode Island3,4652483,4652480
South Carolina11,2041537,0792154,125103
South Dakota3,776601,2002402,57644
Tennessee25,14917118,6712716,47883
Texas63,72413551,18821212,53655
Utah4,3511123,40521394641
Vermont2,0591296433221,416101
Virginia21,62721215,9782855,649123
Washington11,8201139,3861682,43450
West Virginia10,0691534,6882475,381114
Wisconsin21,29214715,4192275,87376
Wyoming1,734645681891,16649

Prospective payment system recalibration file.

Table 3

Number and percent of Medicare discharges from urban and rural hospitals, by State: Federal fiscal year 1984

StateTotal dischargesUrban hospital dischargesRural hospital discharges


NumberPercentNumberPercent
United States10,849,9578,224,02075.82,625,93724.2
Alabama218,616153,04870.065,56830.0
Alaska4,8522,31447.72,53852.3
Arizona122,380102,64383.919,73716.1
Arkansas157,47666,34742.191,12957.9
California912,430870,44695.441,9844.6
Colorado97,12776,58978.920,53821.1
Connecticut128,720124,40796.64,3133.4
Delaware23,42714,57162.28,85637.8
District of Columbia30,67630,676100.000.0
Florida699,923638,74891.361,1758.7
Georgia271,506163,47960.2108,02739.8
Hawaii23,86218,22676.45,63623.6
Idaho36,2317,42120.528,81079.5
Illinois540,106423,03178.3117,07521.7
Indiana264,559189,91871.874,64128.2
Iowa154,01277,20250.176,81049.9
Kansas133,08356,99742.876,08657.2
Kentucky186,86691,59249.095,27451.0
Louisiana204,995142,00269.362,99330.7
Maine60,67333,30754.927,36645.1
Maryland160,007144,78890.515,2199.5
Massachusetts300,210288,15696.012,0544.0
Michigan401,317323,61580.677,70219.4
Minnesota194,341124,49064.169,85135.9
Mississippi159,39939,09924.5120,30075.5
Missouri305,499213,14369.892,35630.2
Montana38,14012,17231.925,96868.1
Nebraska96,53943,72845.352,81154.7
Nevada33,75229,86488.53,88811.5
New Hampshire37,74422,31259.115,43240.9
New Jersey321,934321,934100.000.0
New Mexico44,19521,97049.722,22550.3
New York764,866677,79788.687,06911.4
North Carolina246,532139,86156.7106,67143.3
North Dakota47,67621,39444.926,28255.1
Ohio453,186374,35382.678,83317.4
Oklahoma166,40394,17056.672,23343.4
Oregon120,98983,75469.237,23530.8
Pennsylvania678,550582,35585.896,19514.2
Rhode Island46,47546,475100.000.0
South Carolina124,89279,60263.745,29036.3
South Dakota44,17315,40534.928,76865.1
Tennessee299,096208,24569.690,85130.4
Texas674,777505,11074.9169,66725.1
Utah37,52329,26878.08,25522.0
Vermont21,6145,34224.716,27275.3
Virginia221,233146,54966.274,68433.8
Washington167,003130,64278.236,36121.8
West Virginia123,40052,83642.870,56457.2
Wisconsin231,656157,89868.273,75831.8
Wyoming15,3164,72930.910,58769.1

Prospective payment system recalibration file.

Table 4

Medicare discharges per urban and rural hospital, average length of stay, and case-mix index, by State: Federal fiscal year 1984

StateTotalUrbanRural



Discharges per hospitalALOS in daysCMIDischarges per hospitalALOS in daysCMIDischarges per hospitalALOS in daysCMI
United States1,8649.01.11342,7049.51.14239457.41.0229
Alabama1,6958.11.08122,7338.41.11698987.20.9979
Alaska2217.81.05727719.31.13581346.50.9856
Arizona1,7007.81.16132,8518.11.18375486.51.0449
Arkansas1,6407.21.05313,4927.91.12761,1836.70.9988
California1,8777.61.16492,0487.71.16846886.21.0931
Colorado1,2147.71.12452,3218.11.14644376.41.0426
Connecticut3,6789.71.19443,7709.71.19662,1578.81.1302
Delaware3,34710.41.10384,85711.01.12852,2149.51.0632
District of Columbia2,78912.21.19562,78912.21.19560
Florida3,2258.31.13463,6098.51.14371,5297.01.0400
Georgia1,6367.51.09642,4048.11.15091,1026.61.0139
Hawaii1,2568.71.20532,0259.41.24635646.61.0730
Idaho8056.31.11313,7116.71.31196706.21.0619
Illinois2,2509.61.10032,83910.11.12711,2877.81.0033
Indiana2,2428.81.10143,2199.21.13631,2657.71.0124
Iowa1,1858.01.11852,9699.01.19247396.91.0442
Kansas9187.71.10212,7148.31.19746147.21.0307
Kentucky1,7638.41.06963,0539.21.12561,2547.71.0158
Louisiana1,4247.81.07272,0588.21.11948406.70.9676
Maine1,3488.41.10961,7539.21.15601,0537.41.0531
Maryland3,01910.31.09683,14810.41.09712,1749.31.0938
Massachusetts2,72911.51.08762,77111.61.08902,0099.31.0539
Michigan1,9679.21.10852,6109.51.12499717.61.0400
Minnesota1,1367.51.16002,2638.11.22356026.51.0468
Mississippi1,3517.71.01482,6078.51.10031,1687.40.9870
Missouri2,0238.71.11732,9209.31.16111,1847.41.0161
Montana6056.91.11473,0438.11.23394406.41.0588
Nebraska9757.81.07933,3648.71.16306147.01.0100
Nevada1,4067.81.17372,2978.01.19173535.61.0353
New Hampshire1,3988.51.09131,7168.91.08551,1027.91.0998
New Jersey3,42512.01.12783,42512.01.12780
New Mexico9027.21.11051,9977.71.18385856.81.0381
New York2,94213.71.08923,35513.91.09801,50112.21.0206
North Carolina1,8408.71.12182,7429.21.16381,2857.91.0667
North Dakota8837.71.07502,6748.81.20365716.70.9704
Ohio2,3369.21.12992,9719.51.15091,1597.81.0302
Oklahoma1,2617.71.09712,1408.21.16358217.11.0105
Oregon1,6136.41.16582,4636.61.20739086.01.0725
Pennsylvania2,9769.91.11973,21710.11.13022,0478.61.0561
Rhode Island3,32010.21.16383,32010.21.16380
South Carolina1,7118.71.11442,4129.01.15261,1328.11.0472
South Dakota7017.21.06113,0818.31.19314966.60.9905
Tennessee2,0358.61.06773,0189.11.11341,1657.40.9629
Texas1,4338.01.10022,0968.41.13897386.90.9848
Utah9626.51.22641,8296.81.27933595.41.0392
Vermont1,3518.81.12062,6719.91.33231,1628.51.0511
Virginia2,1699.21.09322,6179.71.13391,6248.31.0132
Washington1,5916.61.18282,3337.01.21107425.51.0817
West Virginia1,8708.11.05332,7818.71.09841,5017.61.0195
Wisconsin1,5988.31.12852,3228.81.15769587.01.0663
Wyoming5677.41.03731,5769.21.11814416.61.0012

Prospective payment system recalibration file.

NOTES: ALOS is average length of stay. CMI is case-mix index.

Table 5

Total charge per Medicare discharge, ancillary charge, and percent of ancillary charge to total for rural and urban hospitals, by State: Federal fiscal year 1984

StateTotalUrbanRural



Total charge per dischargeAncillary charge per dischargePercentTotal charge per dischargeAncillary charge per dischargePercentTotal charge per dischargeAncillary charge per dischargePercent
United States$4,796$2,76057.5$5,367$3,07257.2$3,007$1,78259.3
Alabama4,4543,03268.15,0093,40067.93,1592,17468.8
Alaska5,3202,50647.16,8483,18046.43,9261,89148.2
Arizona4,9073,03761.95,2273,22061.63,2462,08564.2
Arkansas3,0631,95163.73,6662,34964.12,6251,66163.3
California6,5333,93060.26,6203,97360.04,7343,04964.4
Colorado4,4492,61558.84,8082,85459.43,1111,72655.5
Connecticut4,9392,71354.94,9852,74555.13,6331,77848.9
Delaware4,8042,35949.15,3902,54447.23,8392,05553.5
District of Columbia8,6594,36850.48,6594,36850.4000.0
Florida5,3273,63868.35,4683,73468.33,8542,63568.4
Georgia3,6312,39766.04,1912,74465.52,7851,87267.2
Hawaii5,1932,95957.05,8183,35357.63,1711,68553.2
Idaho3,1691,82857.73,8372,26359.02,9961,71657.3
Illinois5,7243,21256.16,4283,59756.03,1811,82057.2
Indiana3,7122,05455.34,1562,32355.92,5831,37153.1
Iowa3,5942,05157.14,5532,61757.52,6311,48356.4
Kansas3,6072,12658.94,8533,05362.92,6731,43153.5
Kentucky3,6101,97554.74,3152,29253.12,9331,67157.0
Louisiana4,1462,81067.84,6903,13866.92,9222,06970.8
Maine4,3212,40555.74,8952,74456.03,6211,99355.0
Maryland4,3082,07648.24,4512,13748.02,9541,49350.5
Massachusetts5,4742,84251.95,5442,87751.93,7881,99552.7
Michigan5,5092,87452.26,0193,13452.13,3881,79352.9
Minnesota3,6632,04055.74,4022,48056.32,3471,25553.5
Mississippi3,0502,12169.54,0422,90871.92,7281,86568.4
Missouri4,6742,86861.45,3783,31361.63,0521,84260.3
Montana3,4771,96856.64,6812,72058.12,9121,61555.4
Nebraska3,4932,21663.44,8243,22966.92,3901,37757.6
Nevada7,3495,27671.87,8905,71372.43,1931,92260.2
New Hampshire3,8481,96751.13,9402,03751.73,7141,86550.2
New Jersey4,5702,14146.84,5702,14146.8000.0
New Mexico4,2982,71763.25,1343,29564.23,4712,14661.8
New York5,9222,53042.76,2462,64742.43,4031,62047.6
North Carolina3,5432,12960.13,9832,39360.12,9661,78460.2
North Dakota3,6622,16759.24,7612,93561.62,7681,54255.7
Ohio4,7422,46051.95,0682,61851.73,1971,71153.5
Oklahoma4,0132,64665.94,7853,22767.43,0051,88762.8
Oregon3,9422,18355.44,2422,34755.33,2651,81455.6
Pennsylvania6,1533,38855.16,5263,60155.23,8962,10253.9
Rhode Island4,4402,16048.64,4402,16048.6000.6
South Carolina3,9282,49763.64,3282,81164.93,2251,94760.4
South Dakota3,1591,85058.64,1602,51860.52,6231,49256.9
Tennessee4,1542,76966.74,7833,21167.12,7131,75664.7
Texas3,9772,58264.94,5132,95765.52,3811,46761.6
Utah3,5922,16160.23,8932,34460.22,5241,51259.9
Vermont3,6311,69546.74,9812,52450.73,1881,42344.6
Virginia4,3522,58559.44,9162,91959.43,2451,92859.4
Washington3,7882,06354.54,0422,19354.32,8731,59555.5
West Virginia3,7152,23660.24,2022,49359.33,3502,04361.0
Wisconsin3,7912,26159.64,2872,52859.02,7271,68861.9
Wyoming3,3512,02660.54,0722,37058.23,0291,87261.8

Prospective payment system recalibration file.

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