An Explanatory Study of Rural Hospital Closures and Their Links to the Economic Health of Local Communities




Pearson, David

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James McGrew Public Policy Award Winner. Numerous rural communities have experienced the loss of their local hospital since the early 1980s. Despite government intervention at the state and federal level, the perception that these closures have caused irreparable harm to the communities and counties where they were once located is ongoing. Much scholarship has been brought to bear on this issue, but little of it has focused on actual events. This paper fills the gaps in prior research, while focusing on the outcomes observed only in Texas. This research builds on the comparative analysis approach used in another study regarding rural hospital closures between 1984 and 1988. Selected economic indicators from 24 rural Texas counties that lost their local hospital are compared with those from a group of counties that experienced no such closures. Comparison counties were selected based on a set of accepted demographic variables. Economic effects were then observed at one and ten years after closure. Quantitative analysis was used to determine the significance of the economic effects experienced by closure counties. The research hypothesis states that hospital closures negatively impact the local economies of the counties where they were once located, in both the short-term and the long-term. Actual results, however, pointed to the contrary. There was no significant difference observed between the counties with hospitals and those without for any of the economic indicators that were tested. Also, the research revealed no significant difference between the two groups in either the short-term or the long-term. The outcomes observed here mimic the results obtained in the prior study, despite the differences between Texas county data and data aggregated at the national level. A smaller unit of analysis and a focus on effects other than the financial might make a more meaningful approach.


An Applied Research Project Submitted to the Department of Political Science, Southwest Texas State University, in Partial Fulfillment for the Requirements for the Degree of Masters of Public Administration, Spring 2002.


hospital closures, government interventions, rural hospitals, economic factors, Texas, Public Administration


Pearson, D. (2002). An explanatory study of rural hospital closures and their links to the economic health of local communities. Masters of Public Administration, Texas State University, San Marcos, Texas.


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