Economic impact of hospital closure on small rural counties, 1984 to 1988: demonstration of a comparative analysis...

Hospital closure in a rural community may affect the locale's economic prospects as well as the health of its residents. Studies of economic effects have primarily relied on modeling techniques rather than observation of actual change. This study demonstrates the use of a comparative analysis approach for estimating the economic effects of hospital closure on small rural counties. The experiences of 103 small rural counties at which a hospital closed between 1984 and 1988 was compared with a matched group of counties at which no closure took place. "Comparable" counties were selected based on seven scales measuring the similarity between a closure county and potential comparisons. Three scales examined population and economic characteristics in the year before closure; two scales measured change throughout a three-year period preceding closure; and two scales measured change throughout a five-year period preceding closure. Closure effects were measured through a multivariate analysis of the post-closure economic history of closure and comparison counties. The key assumption is that similar counties should have similar experiences over time. If an event occurs within some of these counties but not others, this event should have visible effects. Comparative analysis suggested that earned income in closure counties (excluding farming and mining income) was lower than in comparison counties subsequent to closure and that labor force growth was similarly affected. A comparative analysis approach produces results that parallel those obtained from economic modeling and should be considered for further research.