Economic Consequences of Hospital Closures

Diane Alexander and Michael R. Richards

No 29110, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Hospitals anchor much of US health care and receive a third of all medical spending, including various subsidies. Nevertheless, some become insolvent and exit the market. Research has documented subsequent access problems; however, less is understood about broader implications. We examine over 100 rural hospital closures spanning 2005-2017 to quantify the effects on the local economy. We find sharp and persistent reductions in employment, but these localize to health care occupations and are more impactful in areas experiencing complete closures. Aggregate consumer financial health and housing markets appear unaffected by the shuttering of a rural hospital.

JEL-codes: H51 I11 I18 J21 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-hea, nep-isf and nep-lma
Note: EH PE
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Citations: View citations in EconPapers (3)

Published as Diane Alexander & Michael R. Richards, 2023. "Economic consequences of hospital closures," Journal of Public Economics, vol 221.

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