Defining rural hospital markets.

OBJECTIVE

The purpose of this study is to examine the geographic scope of rural hospital markets.

DATA SOURCES

The study uses 1988 Medicare patient discharge records (MedPAR) and hospital financial information (HCRIS) for all rural hospitals participating in the Medicare Program.

STUDY DESIGN

Hospital-specific market areas are compared to county-based market areas using a series of geographic and socioeconomic-demographic dimensions as well as indicators of market competitiveness. The potential impact of alternative market configurations on health services research is explored by estimating a model of rural hospital closure.

DATA COLLECTION/EXTRACTION METHODS: Hospital-specific market areas were defined using the zip code of patient origin. Zip code-level data were subsequently aggregated to the market level.

FINDINGS

Using the county as the hospital market area results not only in the inclusion of areas from which the hospital does not draw patients but also in the exclusion of areas from which it does draw patients. The empirical estimation of a model of rural hospital closure shows that the definition of a hospital market area does not jeopardize the ability to identify major risk factors for closure.

CONCLUSIONS

Market area definition may be key to identifying and monitoring populations at risk from rural hospital decisions to downsize or close their facilities. Further research into the market areas of rural hospitals that have closed would help to develop alternative, and perhaps more relevant, definitions of the population at risk.