"How Rural Hospital Closures Affect Rural Residents," by Deepak Premkumar, Dave Jones, and Peter F. Orazem

May 18, 2017

This study estimates a model of rural patient hospital choice between the nearest rural, urban, or research hospital. We present separate estimates for inpatient and outpatient visits, for different diagnoses, and for emergency and nonemergency admissions. The analyses illustrate the tradeoffs between hospital quality and distance in deciding whether to choose the nearest hospital or to travel farther for an alternative. We
then simulate two hospital closing scenarios. We find that closing the lowest-quality rural hospitals is a better policy prescription than closing the least used hospitals since closing low-quality hospitals results in a substantial increase in average quality of hospital with only a slight increase in distance traveled for chosen hospitals.