This study estimates changes in outpatient care as a source of revenue for rural hospitals. It uses 2011-2019 data from the Healthcare Cost Report Information System to analyze trends in the percent of patient revenue coming from outpatient care.

For the average hospital in our sample of 1,866 rural hospitals, the percent of revenue coming from outpatient services increased from 66.5% in 2011 to 74.2% in 2019. Furthermore, total outpatient revenue for the average rural hospital increased by 56.4% from 2011-2019, after inflation adjustment. Conversely, total inpatient revenue for the average rural hospital only increased by 9.3% from 2011-2019, after inflation adjustment.

Our findings suggest that many rural hospitals now receive most of their revenue from outpatient sources. Future payment mechanisms recognizing the importance of outpatient services may be more effective in sustaining financial viability in rural hospitals compared to payment models based on inpatient criteria.