State legislation and policy affecting rural hospital conversion and closure

Many rural hospitals have closed or converted to organizations that provide health services other than general, acute inpatient care. However, little is known about why rural hospitals convert rather than close. This study evaluates the relationship between state policy and rates of rural hospital conversion relative to rates of rural hospital closure. The expectation was that the relationship among state policies and rates of conversion and rates of closure differs as a function of whether a state policy facilitates rural hospital transition to alternative models of care or supports them in their existing form. National data were analyzed for all rural hospitals from 1984 to 1991. Results indicate that state policies have done little to facilitate widespread adoption of conversion among rural hospitals. Despite these findings, results also indicate that some state policies have resulted in an increase in the rate of rural hospitals conversions as an alternative to closure.