Prediction of Financial Distress Among Rural Hospitals

North Carolina Rural Health Research and Policy Analysis Center

The Financial Distress Index (FDI) can assist with a better understanding of factors affecting rural hospital financial distress and developing an early warning system to identify hospitals at risk of distress. The FDI model forecasts the risk of distress in two years using the most currently available hospital financial performance, government reimbursement, organizational characteristics and market characteristics. The objective of the brief is to describe the ability of the FDI model to identify a group of rural hospitals facing an increased closure rate and evaluate the potential impact drivers of the FDI model may have on the percent of hospitals at high risk of financial distress and closure.