Characteristics of Communities Affected by Critical Access Hospital Mergers

Abstract

This brief describes demographic, socioeconomic, health status, and geographic characteristics of communities served by Critical Access Hospitals (CAHs) by their merger status. 


Key Findings
• Between 2010 and 2022, CAHs were the targets of 128 mergers, meaning a health care entity acquired or merged them under a single owner. 
• CAH mergers were unevenly distributed across U.S. Census regions, largely concentrated in the Midwest and the South.
• Communities where CAHs merged had lower rates of uninsurance for both adults and children, lower median household incomes, lower-than-median income inequality, and higher unemployment rates compared with counties without CAH mergers.

Implications
CAH leadership and boards contemplating a merger should consider local community characteristics and potential tradeoffs to ensure that decisions consider patient and community needs, and not just financial impacts. For example, if a merger results in higher prices and/or lower wage growth as some previous research has suggested, our findings that mergers are occurring in counties with lower household incomes and higher unemployment may suggest negative impacts on patients’ ability to access care. CAHs in areas with high uninsurance may also be less able to consider affiliation as a strategy for improving financial stability or avoiding closure. They may need to consider alternative approaches for financial stability.

Topics

Community Impact Finance