When do we Just say no? Policy termination decisions in local hospital services

This paper develops a two-stage decision-making model of the public policy termination process, which integrates political and economic influences on local decision makers. We empirically explore the model using data on the provision of local public hospitals in California over 1981-95. The results provide support for the model as we find that triggering events as well as characteristics of the local decision-making context affect the termination decision. For the case of public hospitals, we find that lower state and local revenue growth rates increase the likelihood of termination, while decision makers in communities with a larger local health budget, more unionized public employees, and a larger private hospital sector are less likely to terminate local public hospitals. The implications for public policy and for our understanding of the termination process are discussed.