Hospital Systems and Access to Rural Healthcare

Hospital mergers may affect cost, quality, and access to care. While numerous papers document the effects of mergers on cost and quality, the effects of hospital mergers on access to care are less certain. Merging hospitals may limit access by closing one of the affected hospitals or eliminating individual service lines. However, mergers may instead improve access if hospital systems use their resources to subsidize unprofitable hospitals and services. We study the impact of hospital mergers on obstetrics care in rural markets, where there may be heightened concern about the availability of local care options. Using a differences-in-differences approach, we find that when rural hospitals are acquired, there are substantial increases in the probability of obstetrics unit closures, with resulting large reductions in the number of births at the hospital. This reduction is especially acute among Medicaid patients. Obstetrics patients living in counties where hospitals are acquired have a higher probability of delivering outside of their county of residence. On the other hand, acquired hospitals reduce staffing, potentially lowering costs. We find no evidence that maternal or infant outcomes are negatively affected by closures.