Long before the establishment of Medicaid or the passage of the Affordable Care Act, California counties provided their poorest residents with access to comprehensive medical care. This article analyzes the creation and closure of public hospitals in the state of California. It combines both qualitative historical research and event history analysis to assess what led first to the creation of the nation's most comprehensive public health network and then to its gradual demise. Strong evidence is presented that the implementation of Medicaid in California significantly altered the calculus of local governments with regard to the operation of public hospitals. In particular, Medicaid shifted county hospitals from the realm of allocational politics to that of redistributive politics. Subsequently, reforms at the state and federal levels further encouraged this development. Because of this shift, many counties decided to close their hospitals. Moreover, as expected for redistributive policies, the continued operation of public hospitals was driven not by need but instead merely by fiscal capacity: more affluent counties continue to maintain them while poorer, needier counties close their doors.