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Downsizing in the 1980s failed to improve financial performance of rural hospitals

About 15 percent of rural hospitals downsized during the mid and late 1980s by selling, shutting down, or restructuring ownership of a hospital unit or service. The 1980s were especially difficult for rural hospitals, and hospitals that downsized reduced expenses in an attempt to improve financial performance, according to Stephen S. Mick, Ph.D., and Christopher G. Wise, Ph.D., of the University of Michigan. However, these hospitals did not perform any better financially than hospitals that did not downsize. It may be that downsizing was not a chosen strategy, but that what passed for downsizing was actually organizational decline, explain the researchers, who were supported by the Agency for Health Care Policy and Research (HS05998).

They analyzed the survey responses of 797 chief administrators of rural hospitals about their facilities' service mix, financial strategies, and personnel during fiscal years 1982-1983 and 1987-1988, as well as secondary data from the American Hospital Association and other databases. They calculated hospitals' profitability (difference between total operating and nonoperating revenue and total operating and nonoperating expenses) and liquidity (ability to meet short-term obligations).

Results showed that before 1983, hardly any rural hospitals needed to downsize because of poor financial performance. In 1983, 2 percent of rural hospitals reported having downsized; by 1988, 15.1 percent or 120 of 797 responding rural hospitals reported some form of downsizing. Hospitals that downsized in FY 1982-1983 did not have significantly lower total profit margins than those that did not downsize (0.006 and 0.028, respectively). By FY 1987-1988, total profit margins for both groups of hospitals had declined, but no statistically significant difference emerged (-0.019 for downsizing hospitals vs. -0.032 for non-downsizing hospitals). In fact, hospitals that downsized actually had a significantly poorer current liquidity ratio by FY 1987-1988 (2.621 vs. 3.023).

For more details, see "Downsizing and financial performance in rural hospitals," by Drs. Mick and Wise, which appears in Health Care Management Review 21(2), pp. 16-25, 1996.

High levels of functional disability found among Mexican-American nursing home residents

Mexican-American nursing home residents are more functionally disabled than non-Hispanic white residents, chiefly because elderly Mexican Americans are burdened by more chronic and acute medical conditions that impair their ability to function, according to a study supported in part by the Agency for Health Care Policy and Research (HS07397). Researchers at the Mexican-American Medical Treatment Effectiveness Research Center in San Antonio, TX, surveyed 17 nursing homes in south Texas, including 366 Mexican-American and 251 non-Hispanic white residents.

They found that Mexican-American residents were significantly more dependent on help with bathing, dressing, and eating and were more likely to require help in getting around and using the bathroom than non-Hispanic whites. This dependency appeared to be directly related to the residents' medical conditions. For example, residents with one to seven medical conditions had an average ADL (activities of daily living) score of 14.2, whereas residents with more than 11 conditions had an average ADL score of 20.4, indicating worse functioning.

Bladder and bowel incontinence, infections, and cerebrovascular disease, which are significantly associated with low functioning, occurred 5 to 6 percent more often in Mexican Americans than in non-Hispanic whites (13 to 15 percent vs. 8 to 9 percent). These differences were not explained by sociodemographic factors such as age, marital status, sex, or education but were associated with the overall burden of disease.

See "Function and medical comorbidity in South Texas nursing home residents: Variations by ethnic group," by Cynthia D. Mulrow, M.D., M.Sc., Laura K. Chiodo, M.D., M.P.H., Meghan B. Gerety, M.D., and others in the March 1996 issue of the Journal of the American Geriatric Society 44(3), pp. 279-284.

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