Predicting Financial Distress in Acute Care Hospitals

ABSTRACT

Hospitals continue to face financial pressures from healthcare reform and heightened competition. In this study, our objective was to quantify the financial distress in acute care hospitals in Texas, applying multivariate logistic regression in a four-year longitudinal analysis. Of the 310 acute care hospitals, 50 (16.1%) were in financial distress in the most recent year, up considerably year over year. Distressed hospitals had fewer beds, lower patient acuity, and less outpatient revenues than those in good financial condition. Administrators should identify business turnaround strategies for combating distress to avoid potential closure.

KEYWORDS:

• Financial distress
• acute care hospital
• business strategy
• bankruptcy