Association for Public Policy Analysis & Management

In the U.S., local hospitals have historically been a cornerstone of community health, reducing poverty and social inequality by providing neighborhood residents access not only to essential health care, but also stable, middle-class jobs. However, as changes in funding and reimbursement policies increasingly drive health networks to consolidate into “megasystems” and shift focus to outpatient care, these systems are closing less-profitable hospitals in lower-income neighborhoods in favor of more profitable specialty practices like urgent care centers, often sited in gentrifying areas. This trend of “healthcare gentrification”, or shifts in the type of and spatial distribution of care that favor wealthier residents while potentially excluding the more vulnerable, often results in layoffs and the emergence of different jobs that generally pay less than hospital-based work, are less likely to be unionized, and may require longer commutes. Our analysis draws on Census labor market data and key informant interviews to examine the impact of healthcare gentrification on healthcare employment through distinct case studies of hospital system closures or re-structuring in four mid-sized cities between 2012 and 2018: Dallas (700 workers laid off from Garland hospital due to closure in a middle-income suburb), Philadelphia (675 workers laid off from St. Joseph’s Hospital due to closure in a low-income neighborhood), Atlanta (521 workers transitioned from WellStar Health Systems to contracting agency after acquisition of 5 hospitals), and Seattle (550 workers laid off from Swedish Health Services due to reorganization for cost savings).