This research examined the performance of rural hospitals engaged in differ
ent levels of managed care activities and identified factors related to per
formance and competition that affected rural hospitals' likelihood of pursu
ing managed care as a strategy. The sample cd consisted of 139 rural hospit
als in Nebraska. Results showed that a relatively high percentage of hospit
als were engaged ill managed care activities, mainly through contractual ar
rangements. The study found that high competition in the marketplace increa
sed the likelihood of hospitals pursuing managed care strategies, Wilde hig
h demand markets had a negative association with the likelihood of pursuing
a managed care strategy, No significant relationship ars detected between
poor performance and pursuing an managed care strategy.