The bypassing of rural hospitals increased in Colorado's rural communities during the 1990s. To understand this phenomenon, this study explores why rural Medicare patients in Colorado bypassed their local rural hospitals when they could have received health care services at their nearest local hospital. To identify both individual factors and institutional variables associated with hospital choice behavior, the conditional logistic regression model analyzes 4,099 rural Medicare patients who received heart failure and shock procedures. This study determines that both institutional variables (ownership type, number of beds, number of services, accreditation, and distance between the hospital and a patient's residence) and patient variables (age, length of stay, race, and total charge) are significant in patients' hospital choice. This study suggests that rural hospitals could build cooperative relationships with other large rural and urban hospitals.