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management, networks, rural health



  1. Gregg, Walter
  2. Moscovice, Ira


This article examines the development and operation of rural health networks in the United States based on data collected from telephone surveys of rural health networks containing at least one rural hospital in the United States in 1996 and four years later in 2000. The implications of network development for health care managers participating in, or considering participation in, a rural health network are discussed.


Rural hospitals traditionally have been the cornerstone of the rural health care system for many communities.1 They often are a community's major human service organization and referral point linking patients with health care and social services that may not be locally available. Rural hospitals also have been critical for communities in ways that extend beyond their traditional health care role. They usually are a community's major resource for health education, promotion, and disease-prevention activities; a major employer; and often a repository of community history, pride, and philanthropy. Rural hospitals serve as an important anchor point, bridging gaps in health care provider distribution (e.g., via satellite clinics and mobile health units) and also act as a counter weight against the economic erosion that has befallen many rural communities.


The implementation of prospective payment for inpatient services has been problematic for small rural hospitals because of their low inpatient volumes and the high proportion of elderly residents in rural areas.2 The expansion of managed care into rural areas has further stressed hospital finances as payments for privately insured patients continue to be curbed by third-party payors. In response to these and other constraints, rural providers need to manage their resources better and improve their mode of operation.3


Over the past two decades the number of rural community hospitals has declined significantly due to closure and facility conversion to alternative operations. During this period there were 438 closures and conversions of rural hospitals, a trend that adds to the concern that further efforts to control health care costs may seriously impinge on access to quality care services for some rural areas unless those efforts are strategically linked with broader organizational and system-related factors. In response, a variety of public and private sector initiatives have emerged to directly assist rural hospitals and address concerns about rural access to care.