# Association Between Rurality and Financial Performance of Public Hospitals in Japan: A Nationwide Cross‐Sectional Study

## TL;DR

This study examines how rural location affects public hospital finances in Japan, finding that hospital size and occupancy are more important than rurality.

## Contribution

The study provides new evidence that geographic rurality does not independently affect hospital financial performance when adjusting for size and occupancy.

## Key findings

- Unadjusted analysis showed higher odds of financial deficit in the most rural hospitals.
- After adjusting for hospital size and occupancy, rurality was not significantly linked to financial deficits.
- Larger hospitals and those with higher occupancy had better financial performance.

## Abstract

Ensuring sustainable healthcare delivery in rural Japan is a policy priority. However, the relationship between geographic rurality, as measured objectively, and the financial performance of public hospitals essential to these areas remains underexplored.

To examine the association between the Rurality Index for Japan (RIJ) and the likelihood of ordinary and medical service deficits in public hospitals, while adjusting for hospital size and bed occupancy rate.

We conducted a nationwide cross‐sectional study using the fiscal year 2022 yearbook from Japan's Ministry of Internal Affairs and Communications. The primary outcomes were ordinary and medical service deficits, defined as a balance ratio of < 100%. Multivariable logistic regression was used to estimate adjusted odds ratios (aORs) and 95% confidence intervals (95% CIs) for RIJ quartiles, with hospital size and bed occupancy rate as covariates.

A total of 643 hospitals were analyzed. In unadjusted analyses, the highest rurality quartile (Q4) was associated with significantly higher odds of ordinary deficit (OR 1.79, 95% CI 1.11–2.88). However, in multivariable analyses, no statistically significant independent association was found between RIJ and either deficit. Conversely, larger hospitals (≥ 300 beds; aOR 0.53, 95% CI 0.32–0.89) and those with higher bed occupancy rates (≥ 65.6%) were significantly associated with lower odds of ordinary deficit.

Hospital size and bed occupancy rate, rather than geographic rurality itself, are key structural factors associated with the financial sustainability of public hospitals in Japan.