Inflation is making it hard for rural hospitals in Texas to stay open

From Houston Public Media:

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Trinity, Texas hasn’t had a hospital for the last five years. That has meant life or death in some instances for the town 90 miles north of Houston.

“We have people out on the lake in the summer in the heat, having heart attacks, having accidents, getting snake bites,” said Marjory Pulvino, the Vice President on the Board of the Trinity Memorial Hospital District. “We did not have an emergency room to take care of those people.”

The closest emergency rooms are in Huntsville — around 30 miles south of Trinity. Pulvino said it could take up to an hour and a half to reach the Huntsville ERs from her house, including the time waiting for an ambulance to arrive and for paramedics to stabilize the patient.

If specialized care is needed, residents have to drive 50 miles to Conroe where a handful of large hospital systems have set up facilities.

Over the last five years, Pulvino and the Board have made many efforts to reopen the hospital, trying to court over 25 health care organizations. The hospital district has recently announced that Mid Coast Health System will lease the vacant hospital, and restart emergency care and other services early next year.

The hospital is entering a landscape that is putting many other Texas rural hospitals in a bind. 2022 has presented a tough financial outlook as inflation is driving up expenses, according to a recent report from the Texas Hospital Association and Kaufman Hall. Twenty-six percent of rural hospitals are at serious risk of closure — up from 16 percent last year.

The cost of labor has more than tripled since 2020, especially as hospitals continue to rely on travel nurses to deal with a statewide shortage. A recent survey shows the vacancy rate for registered nurses is around 18 percent at rural hospitals across Texas.

There have also been major spikes in expenses for medical supplies and drugs in the past two years.

“We limped into the pandemic and we’re gonna limp out of it,” said John Henderson, the CEO of the Texas Organization of Rural & Community Hospitals.

Even before the pandemic, Texas led the nation in the number of hospital closures in rural counties.

Henderson said that rural residents are typically older, poorer and less likely to be insured — in part due to Texas’ decision not to expand Medicaid in the state. Furthermore, the rural population is shrinking.

“I mean all of that is just a tough recipe for rural hospitals to survive,” Henderson said.

Rural hospitals tend to get most of their revenue from Medicare and Medicaid, which administrators have long complained don’t pay enough. The high uninsured rate means uncompensated care is also a common problem.

Rural hospitals have employed a range of strategies to tighten their belts in order to avoid closing. Public hospital districts may raise local property taxes. Some may partner with large hospital systems or cut services like labor and delivery.

Federal relief funds from the American Rescue Act, Paycheck Protection Program and Provider Relief have staved off rural hospital closures. No rural hospital has closed in Texas since February 2020, according to state data obtained by Houston Public Media.

During a special session last year, the state legislature allocated $75 million to rural hospitals from the American Rescue Act.

But those relief funds have dried up. The loss of revenue is painting a bleak picture for many rural hospitals.

“2022 is different,” Henderson said. “There hasn’t been additional stimulus funding. And we’ve seen an explosion of inflationary pressure, supply cost and workforce issues that make these hospitals vulnerable in a way that they haven’t been for the last two or three years.”

Bob Pascasio has been a rural hospital administrator in Texas for almost 30 years. He’s now the CEO of Omnipoint Health Hospital in Chambers County, 50 miles east of Houston.

“I wish I could tell you that their data is wrong and it’s different here, but it’s not,” Pascasio said. “Everybody, everybody’s in a world of hurt right now. The vast majority of institutionally based providers didn’t get rich during the pandemic, we’re struggling to keep our doors open now.”

Pascasio says the squeeze on rural hospitals has consequences on every Texan.

“Last time those of us who work in rural health care looked, they weren’t growing corn or pumping oil in downtown Houston,” Pascascio said. “Rural needs to exist and the folks who are necessary to make that a reality for everyone else need health care.”

Rural advocates like the Texas Organization of Rural & Community Hospitals are pushing for lawmakers to provide relief when the legislature meets in January. They’re proposing changes to the way Medicaid payments are set up, the expansion of student loan repayment for nurses and funding for broadband.

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