HOSPITAL FINANCIAL DISTRESS, RECOVERY AND CLOSURE: MANAGERIAL INCENTIVES AND POLITICAL COSTS
Li-Lin (Sunny) Liu, Kathryn J. Jervis, Mustafa (Mike) Z. Younis and Dana A. Forgione* ABSTRACT. The purpose of this study is to examine the association of managerial incentives and political costs with hospital financial distress, recovery or closure. The Medicare Payment Advisory Commission has stated that hospital closures are important for evaluating the distribution of cost, quality and access to healthcare throughout the US. Using Logistic regression, we demonstrate that hospital closure is associated with low occupancy, return on investment, asset turnover, and lack of affiliation with a multihospital system. It is also significantly associated with urban location, teaching programs, high Medicare and Medicaid patient populations...