Criteria are needed for use in designating some rural hospitals as essential so that they may receive state or federal assistance. Three types of criteria are considered in this analysis: hospital volume measures, hospital competitiveness measures, and community need measures. The criteria sets reflect different assumptions about the relationship between need and demand for health services. Analysis of available data reveals that neither hospital volume nor competitiveness is correlated with community need, meaning that different hospitals would be designated as essential under each system. Implications are discussed.
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