The economic impact of hospitals in rural communities

Abstract

This article presents how to assess the economic impact of a hospital on a rural community. The economic impact is identified by assessing the direct, induced, and indirect impacts that result because of the presence of a hospital in a rural community. The methodology utilizes survey data and estimation procedures for four rural hospitals. The economic impact estimates are based on microdata. Income multipliers are estimated for each of the rural communities. The research demonstrates that rural hospitals do make significant economic contributions to the communities they serve. Community leaders can use the model presented to evaluate the economic impact of their local hospital.