Financial Effects of Remote Product Delivery: Evidence from Hospitals

Review of Financial Studies, forthcoming

91 Pages Posted: 26 Apr 2021 Last revised: 24 May 2024

See all articles by Kimberly Cornaggia

Kimberly Cornaggia

Pennsylvania State University - Department of Finance

Xuelin Li

Columbia University

Zihan Ye

University of Tennessee

Date Written: October 25, 2023

Abstract

We study financial effects of remote product delivery in the healthcare industry. Exploiting staggered law adoption for identification, we find that telehealth provision redistributes hospital operations and access to capital away from rural communities. As urban telehealth providers acquire rural patients, rural hospitals experience decreased revenue and profit, credit rating downgrades, increased cost of capital, and ultimately risk of closure. Although telehealth reduces travel costs, some communities lose access to acute care. Overall, we conclude that remote healthcare services have financial consequences as well as real effects, and their benefits are unequally distributed.

Keywords: telehealth, municipal bond, healthcare finance, healthcare inequality, bankruptcy

JEL Classification: G12, G31, H74, H75, I11, I14, L31

Suggested Citation

Cornaggia, Kimberly and Li, Xuelin and Ye, Zihan, Financial Effects of Remote Product Delivery: Evidence from Hospitals (October 25, 2023). Review of Financial Studies, forthcoming, Available at SSRN: https://ssrn.com/abstract=3833193 or http://dx.doi.org/10.2139/ssrn.3833193

Kimberly Cornaggia

Pennsylvania State University - Department of Finance ( email )

306 Business Bldg
University Park, PA 16802
United States
814-865-2243 (Phone)
814-865-3362 (Fax)

HOME PAGE: http://directory.smeal.psu.edu/kjr15

Xuelin Li (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Zihan Ye

University of Tennessee ( email )

Haslam Business Building
453, 1000 Volunteer Blvd,
Knoxville, TN TN 37916
United States

HOME PAGE: http://https://sites.google.com/view/zihanye/home

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