The president suggested through a spokesman on 28 February that the scheme is aimed at assuring quality health care amid a shortage of good doctors.
Niyazov had hinted at the proposal several weeks ago in comments broadcast on state television.
"In the health-care system, all the hospitals should be in Ashgabat, and more are being built there now," Niyazov said. "In the provincial centers, they have opened diagnostic centers. Let people go there, pay -- and without payment you can't expect anything -- and someone will write you a prescription and you go and get it. But here in the capital, you can be treated by doctors. These regional hospitals are not needed."
Such a diagnosis might provide little comfort to those living hundreds of kilometers from Ashgabat -- people who might be involved in accidents, be struck by acute appendicitis, or suffer heart attacks. Turkmenistan is nearly 500,000 square kilometers --considerably larger than Germany -- and transportation can be difficult.
The director of the Open Society Institute's Turkmenistan Project, Erika Dailey, called the proposal one of Niyazov's most shocking statements to date. Speaking from the project's headquarters in Budapest, Dailey pointed out that the trip to Ashgabat is not necessarily an easy one to make for the sick or elderly.
"Turkmenistan is a large country and the capital is extremely difficult to get to both geographically and financially for a lot of people who work in the country, certainly the majority of people," Dailey said. "If this verbal order is actually implemented it will literally mean a death sentence to people with very serious diseases."
Dailey said that health care in Turkmenistan has already been "almost nonfunctional" in recent years. And while she acknowledged that medical care is a problem all over Central Asia, she says the situation is especially bad in Turkmenistan. The government, she said, has actually "pursued a policy of dismantling" the health-care system.
"You can blame a lot of the problems of the health-care system in neighboring countries on poverty and sort of rational factors but in Turkmenistan there seems to be a very consistent pattern," Dailey said. "The government has actually been actively laying off health workers, preventing people from receiving medical education, privatizing the health-care system so that it's financially inaccessible to most Turkmenistanis."
The World Health Organization (WHO), ranks Turkmenistan 168th among nearly 200 countries in terms of physicians per capita, and 133rd in terms of total physicians, according to the latest available figures. It also places Turkmenistan last among 52 countries studied in terms of "healthy life expectancy at age 60," and puts the country near the bottom in terms of total expenditure on health as a portion of gross domestic product.
The implementation of the hospital-closure plan is still a question -- in terms of both timing and rigor. But that it will have some effect is all but inevitable in Turkmenistan, where bureaucrats can be eager to implement the ideas of a president who fosters a cult-like image and demands strict obedience.
"In a dictatorship like Niyazov's, the country is largely ruled by presidential fiat," Dailey said. "And in this case as well, the concern by many is that this statement, which was fairly casual, may indeed be implemented by overly zealous bureaucrats."
The last five years have already seen two major cuts in the number of health-care workers under Niyazov's stewardship. To fill the jobs left by the dismissed workers, soldiers have been ordered to perform the duties of nurses and orderlies.
Polyclinics across the country have already been closed, and people told to seek treatment in regional hospitals -- the same facilities that Niyazov now proposes to shut.
(Rozinar Khoudaiberdiyev of the Turkmen Service contributed to this report.)