A Comparative Analysis: The Impact Of Non-Operating Revenues On Financial Viability Of Urban And Rural Hospitals

Abstract

Fifty New York hospitals, 25 urban facilities and 25 rural facilities, were chosen at random for analysis. They were examined to determine whether non-operating revenue – contributions, gifts, grants (as defined by IRS, Form 990) – plays an important role in fiscal viability . Three years of data, 2005 – 2007, for each hospital was selected, and several financial variables were used to construct a fiscal viability index. The purpose of this study was to determine whether there is a positive difference in the fiscal health of hospitals when the hospitals can solicit more income from non-healthcare/non-operating activities in the form of outside gifts and grants. Another main purpose of this study was to determine which hospital sector, if any – urban vs. rural – is more dependent upon non-operating revenues for their fiscal viability.