Exploring telehealth adoption and financial outcomes for rural hospitals during the COVID-19 public health emergency

Abstract

Purpose

To examine factors associated with rural hospital telehealth adoption during the COVID-19 public health emergency (PHE), and evaluate its relationship with rural hospital financial performance before and during the PHE.

Methods

This panel study used retrospective data (2017–2021) from the American Hospital Association Annual Survey, the Centers for Medicare & Medicaid Services Healthcare Cost Report Information Systems, and the Area Health Resource File. Rural hospitals were categorized as persistent adopters, persistent nonadopters, or switchers based on telehealth adoption status. Bivariate analyses assessed differences in subgroup means and frequencies, while a difference-in-difference model estimated the impact of telehealth adoption on rural hospital financial performance.

Findings

Telehealth adoption varied among rural hospitals. Before the PHE, 75% (751) of rural hospitals had adopted telehealth, while 25% (247) were nonadopters. Despite efforts to promote remote care delivery during the PHE, 58% (144) of pre-PHE nonadopters did not adopt telehealth. Among the 42% (103) that did adopt telehealth during the PHE, no statistically significant effect was observed on operating or total margins.

Conclusion

Rural hospitals in economically disadvantaged and sparsely populated areas, which stand to benefit the most from telehealth adoption, often face substantial barriers that limit their ability to adopt this technology. Financial constraints and limited resources continue to hinder adoption, underscoring the need for targeted policies and investments to expand telehealth access and improve health care outcomes in rural communities.