The single-hospital county: is its hospital at risk?

This article focuses on a hospital group that has not received adequate attention in the literature: the sole provider of short-term, acute hospital care located in a county. In Tennessee, SPHs (single provider hospitals) are fewer in number but are present in more counties than multiprovider hospitals (MPHs). They are smaller in size, less labor and capital intensive, more likely to be a government hospital, and more likely to be in a rural area with low income and limited health care resources. SPHs operate with lower costs, charge patients less, and have lower revenue write-offs than MPHs. As a result, their cash flow is sufficient to fund their depreciation and they consistently earn modest returns. Between 1982 and 1988, a total of 16 hospitals failed in Tennessee but only 3 were SPHs. While SPHs have not been profitable enough to make them ideal candidates for takeover by major hospital systems, they are not a population that is unduly at risk.