This study critically examines the concept of privatization utilizing the example of public hospital closures in California. The analysis is conducted through the framework of historical institutionalism and culminates in the concept of the hollow state. Its specific focus is on the case of Valley Medical Center in Fresno, CA. The case study tracks the developments leading up to the closure of the county hospital in 1996 until early 2010. The thesis also provides background on the public provision of healthcare and the medically indigent in the State of California. Connections are made between the privatization of public hospitals and the concept of social capital by highlighting the implications for local communities. Additionally, public hospital closures are explained as a case of degenerative policymaking. Finally, the study closes by making the case for universal access to healthcare services as a crucial component of democratic governance.