Abstract
BACKGROUND: Hospitals are closing after poor financial performance leaving many patients without access to medical care. Identifying the factors associated with financial distress offers hospitals avenues for potential intervention to avoid bankruptcy and closure. MATERIALS AND METHODS: We performed a retrospective analysis of private U.S. hospitals' financial information from 2011 to 2018. A mixed effects logistic regression model was used with the primary outcome of hospital financial distress (based on the Altman Z-score). RESULTS: Our sample included 2,720 private hospitals contributing a total of 20,022 hospital-year observations. The proportion of hospitals experiencing financial distress each year ranged from 22.0% to 24.3%. For-profit status was associated with an increased odds of financial distress (adjusted odds ratio (aOR), 4.36 [95% Confidence Interval (CI) 3.05 - 6.24]) as compared to non-profit status. A higher share of hospital revenue from Medicaid was also associated with increased odds of financial distress (aOR for the highest quartile, 2.28 [95% CI 1.73 - 3.00]) as compared to the lowest quartile. A higher case mix index (aOR for the highest quartile, 0.32 [95% CI 0.23 - 0.46]) and an increased share of hospital revenue from outpatient services (aOR for the highest quartile, 0.34 [95% CI 0.23 - 0.49]) were associated with decreased odds of financial distress as compared to their respective lowest quartiles. CONCLUSIONS: A significant proportion of private U.S. hospitals experience financial distress. Increasing case complexity and the proportion of patient revenue from outpatient services may represent avenues to avoid financial distress.