New Research Examines Rural Hospital Sustainability and Healthcare Market Consolidation in Pennsylvania

Study finds persistent gaps in staffing, services, and health outcomes, with no consistent improvements associated with hospital consolidation

HARRISBURG - Rural hospitals continue to face significant workforce, service, and access challenges, while mergers, acquisitions, and health system affiliations were not associated with consistent improvements across key hospital measures, according to new research released by the Center for Rural Pennsylvania.

The report, Rural Hospitals in Pennsylvania in the Context of Healthcare Market Consolidations, was conducted by researchers at The Pennsylvania State University and examines general acute care hospitals across the commonwealth from 2016 through 2023. Researchers combined statewide hospital data with interviews and virtual site visits to examine rural hospital utilization, service availability, quality, financial performance, and changes in hospital ownership.

"Rural hospitals are critical to the health and vitality of the communities they serve," said Sen. Gene Yaw (R-23), chairman of the Center for Rural Pennsylvania. "This research provides the General Assembly with important Pennsylvania-specific evidence about the challenges these hospitals face and the increasingly complex role of health system partnerships. As we consider the future of rural health care, maintaining access to essential services for rural residents must remain at the center of the conversation."

The study found that rural hospitals generally operate with fewer physicians and registered nurses, lower patient volumes and occupancy rates, and fewer specialized services than urban hospitals. One of the most pronounced differences involved neonatal care: only about one in five rural hospitals provided Level II or higher neonatal intensive care, compared with approximately one-half of urban hospitals.

Across four major clinical conditions, rural hospitals also had higher mortality rates but lower 30-day readmission rates than urban hospitals, raising questions about how commonly used quality measures should be interpreted in rural settings.

Consolidation Produces a Complex Picture

The study found no consistent improvements in quality, financial performance, staffing, or service availability associated with hospital ownership changes.

Interviews with rural hospital executives and health leaders highlighted both benefits and tradeoffs of health system partnerships. Participants cited greater access to financial resources, specialized services, and administrative support, while also raising concerns about reduced local decision-making and community engagement. The findings suggest that the effects of consolidation depend substantially on the circumstances of individual hospitals and how partnerships are structured and implemented.

"This report underscores that there is no single model for sustaining rural hospitals," said Zachary L. Adams, Ph.D., executive director of the Center for Rural Pennsylvania. "The evidence points instead to the importance of preserving access to essential services, strengthening the rural healthcare workforce, and ensuring that changes in how care is organized remain responsive to the communities hospitals serve."

The full report, Rural Hospitals in Pennsylvania in the Context of Healthcare Market Consolidations, is available here.

About the Center for Rural Pennsylvania

The Center for Rural Pennsylvania is a bipartisan, bicameral legislative agency of the Pennsylvania General Assembly. Created in 1987 under the Rural Revitalization Act, the Center serves as a resource for rural policy within the General Assembly and works to promote and sustain the vitality of Pennsylvania's rural and small communities.