Hospital Closures Can Have a Profound Impact on the Local Economy

Sep 10, 2019

Two rural hospitals in Appalachia -- one in Wheeling, one just across the river in Ohio -- announced they were closing in mid-August. 

 

 


 

Altogether, the closures will directly impact about 1,100 jobs. But, indirectly, it could affect the entire economy of the area. 

“What we found is when a hospital closed, as you might expect, unemployment increased and that was a major impact initially,” said Mark Holmes, director of the North Carolina rural health research program at the University of North Carolina. Holmes published a study in 2006 that looked at the impact of rural hospital closures on community economic health. 

As far as he knows, it’s the only study to date specifically looking at the economic impact of hospital closures on a community. Yet “losing a rural hospital is the precursor to losing your rural community,” said Alan Morgan, CEO for the National Rural Health Association. The NRHA reports there have been 113 rural hospital closures in the United States since 2010 and more than 700 are at risk of closing. 

“First the direct impact of payroll and jobs lost -- that’s a direct impact and one we can measure,” said Morgan. “The second is the indirect impact. All of the services a hospital brings -- the construction, the food service, the flower sales -- there’s a lot of those indirect drivers too. And then I think what the real issue is: What are the impacts you can’t easily measure? Businesses leaving the community because they don’t have access to that 24-7 emergency room service...And obviously young families moving into the communities. Will they still be moving into the community when they know they don’t have access to healthcare?”

For locals, it was well known that Ohio Valley Medical Center -- one of the two facilities that is closing -- was struggling. 

“When OVMC indicated that they were thinking about closing their doors, we knew that there were some serious issues in regards to psychiatric care and also access to emergency care,” said West Virginia University president Gordon Gee. “And so we immediately swung into action to see how we could fill that gap.”

Gee said before negotiations were complete, though, WVU was surprised, blindsided even, to hear that OVMC was going ahead with a closure. OVMC is now slated to close its doors on Oct. 7. Gee has publicly criticized the hospital for the abrupt closure -- saying it doesn’t give anyone enough time to make a plan for covering those services and jobs. 

WVU already owns Reynolds Hospital right outside Wheeling and had entered into a management agreement with Wheeling Hospital earlier this year. Gee said Wheeling Hospital alone had about 350 job vacancies at the time of OVMC’s closure and will be able to absorb some of the jobs lost from the other two facilities. 

Additionally, WVU plans to open two new instant care centers -- one in downtown Wheeling and one outside of the city that should absorb some of the day-to-day health care needs of residents.

“The job loss will not be nearly as impactful as I think people are anticipating,” said Gee. “And obviously on the healthcare side in order to meet that population need, we are going to have to hire more people at Wheeling Hospital and at Reynolds, and that’s exactly what we’re doing.” 

To date, the two facilities have hired about 100 people, and WVU reports another 100 are in the pipeline. 

Because of the combination of those factors, the prospects for Wheeling’s economy may not be as bad as they would have been otherwise. 

“In counties that had an additional hospital, they could recover in a couple years,” said UNC researcher Holmes. “You took about two to three  years for recovery, and they sort of kept going on their trajectory. But for those who lost their only hospital in their community, there was a long-run permanent effect on their community.”

That’s not to say there won’t be a transition period. Or that there aren’t concerns. 

“Going forward, the needs still remain,” said Wheeling mayor Greg Elliott. “From the city’s perspective there are three main needs,” citing healthcare, jobs and the value of real estate in the area.  

In this particular case, Holmes’ data suggests Wheeling may survive the threat of losing its two hospitals, thanks to the intervention of WVU. The lesson of the threat remains, however: When a rural hospital closes, not only does the town lose its medical provider, the ripple effects can rip apart the community’s economy. In short, if the other 700 or so rural hospitals at risk of closure in the United States do close in coming years, rural America has a rough road ahead. 

 

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from Marshall Health and Charleston Area Medical Center.