Factors Influencing Rural Hospitals’ Decisions To Join An Alternative Payment Model: A Mixed-Methods Study

Hospitals' participation in voluntary Alternative Payment Models has implications for model evaluation and performance. This mixed-methods study examined factors underlying hospitals' decision to participate in the Pennsylvania Rural Health Model (PARHM), a voluntary model under the Center for Medicare and Medicaid Innovation that combined hospital global budgets and care transformation plans. Quantitative analyses tested for pre-PARHM differences in characteristics, and qualitative analyses examined contextual factors identified in interviews with hospital administrators across participating and eligible nonparticipating hospitals. At baseline, hospitals that joined PARHM had smaller total margins, fewer inpatient discharges, and greater likelihood of being independent compared with nonparticipating hospitals. Qualitative findings suggested that the desire to improve financial stability and maintain independence influenced decisions to participate, whereas the desire to preserve operational autonomy and flexibility for future growth influenced the choice not to participate. These findings can inform the development and targeting of future Alternative Payment Models, with specific considerations for rural hospitals.