Abstract
The U.S. government has supported rural hospitals through direct subsidies and staff recruitment programs. However, little is known about the long-run impact of large-scale changes to rural health care. The authors explore the long-run trajectory of Appalachian counties where a coal mining union introduced a pioneering rural health care program in the 1950s, anchored by a chain of high-quality hospitals. Hospital beds per capita in counties where the union built its hospitals are persistently high through 2006, even when compared to similar counties and accounting for a variety of supply- and demand-side factors. In particular, union counties defied a national hospital consolidation trend starting in the 1980s. Results are consistent with a supply-side explanation where the scale and/or innovation of the union's investment allowed hospital markets to thrive and attract patients from a broad geography.
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