We use data on a large wave of directed hospital mergers and closures in Ontario to investigate the impact of hospital reorganization on patient welfare. We estimate a model of patient hospital choice on data collected before the reorganization, finding that both distance and hospital quality are determinants of choice. The model is then used to determine the short-run and long-run welfare impact of reorganization. Results suggest that cost savings and efficiency are not the only factors to consider when restructuring in settings where patients do not pay for services. Hospital access and quality must be considered.