Rural hospital closures have negative effects on the local economy, especially following prospective payment system hospital closures, according to a study published March 21 in Health Services Research.
The study analyzed 1,759 nonmetro counties from 2001 to 2018 using a difference-in-differences approach to estimate a hospital closure's impact on income, population, unemployment and the labor force.
Four findings:
1. Of the 1,759 counties in the study, 109 had a hospital closure between 2001 and 2018, of which 59 were complete closures and 50 were converted closures, or hospitals that stop providing inpatient care but continue to provide other healthcare services. Forty-four of the closures were critical access hospitals and 65 were prospective payment system hospital closures.
2. Rural hospital closures hurt the local labor force and population size. Closures decreased the labor force by 1.4 percent on average.
3. The effects are especially significant with prospective payment system hospital closures compared to critical access hospitals. Prospective payment system hospital closures decreased population size by 1.1 percent on average.
4. These economic effects are lessened when the closed hospital is turned into another healthcare facility.
Read the full study here.