Hospital choice of rural Medicare beneficiaries: Patient, hospital attributes, and the patient-physician relationship

Objective. To examine how patient and hospital attributes and the patient-physician relationship influence hospital choice of rural Medicare beneficiaries. Data Sources. Medicare Current Beneficiary Survey (MCBS), Health Care Financing Administration (HCFA) Provider of Services (POS) file, American Hospital Association (AHA) Annual Survey, and Medicare Hospital Service Area (HSA) files for 1994 and 1995. Study Design. The study sample consisted of 1,702 hospitalizations of rural Medicare beneficiaries. McFadden's conditional logit model was used to analyze hospital choices of rural Medicare beneficiaries. The model included independent variables to control for patients' and hospitals' attributes and the distance to hospital alternatives. Principal Findings. The empirical results show strong preferences of aged patients for closer hospitals and those of greater scale and service capacity. Patients with complex acute medical conditions and those with more resources were more likely to bypass their closest rural hospitals. Beneficiaries were more likely to bypass their closest rural hospital if they had no regular physician, had a shorter patient-physician tie, were dissatisfied with the availability of health care, and had a longer travel time to their physician's office. Conclusions. The significant influences of patients' socioeconomic, health, and functional status, their satisfaction with and access to primary care, and their strong preferences for certain hospital attributes should inform federal program initiatives about the likely impacts of policy changes on hospital bypassing behavior.