Over a quarter of rural hospitals in Texas are in danger of closing.
With the threat of pandemic relief money running dry, 26% of rural hospitals are at risk of closure, jumping from 10% in 2021, according to a report from Kaufman Hall.
So, what is considered rural?
“If you have a Whole Foods, you’re urban. If you have a Chick-fil-A, you’re suburban. If you have a Dairy Queen, you’re rural. And if you don’t have a restaurant, you’re frontier,” said John Henderson, the president and CEO of the Texas Organization of Rural and Community Hospitals.
A hospital is considered rural if the community it serves has less than 60,000 people, according to the organization. Around 15% of Texas is considered rural, according to the Texas Hospital Association.
Texas saw 24 rural hospital closures from 2005 to 2022, more than any other state tracked by the University of North Carolina.
One of the largest drains on public health funding is the ongoing obesity problem in Texas. Medical costs are between 30% and 40% higher per obese person compared to one with a healthy weight. Dallas-Fort Worth has one of the highest rates of obesity of any major metro area in the country, as previously reported by The Dallas Express.
The impact of hospital closures is multifold since hospitals are crucial for their health care services and are often some of a region’s biggest employers.
“It wasn’t just that the hospital closed and you lost access and lost 100 or more good jobs. It’s that local sales tax revenue dipped by a third the following year, school enrollment dropped. They went through [a round of] teacher layoffs,” said Henderson. “So, you see all those cascading economic impacts that are all negative and harmful to a community.”
Dr. Kristie Loescher, assistant dean for the McCombs School of Business at the University of Texas, says that one strategy hospitals could employ would be limiting their services. This could even include access to an emergency room.
Currently, the federal Emergency Medical Treatment and Labor Act requires that a hospital must treat any patient that enters an emergency room regardless of their ability to pay. However, this can be a burden for some hospitals.
“In Austin or Dallas, if a hospital sees a few patients like that, they can absorb. They can absorb the bad debt. But in a rural situation, they’re living so close to the wire, they don’t have that extra margin to be able to provide the amount of charity care required,” Loescher told NBC 5 DFW.
Rural hospitals often cannot take the hit that admitting a patient without insurance can have on their financial well-being because they constantly offer services that cost more than they are reimbursed by insurance.
“We are predicting around 500 potential hospital closures in the next 10-15 years, it’s a very tragic thing for the community when this happens. It is sort of this never-ending tale of rural communities where once you lose your hospital, the death rate skyrockets. What ends up happening is industries start to move away from those rural areas to places that have access to inpatient hospitals and emergency services, and rural areas start to die out faster when that happens; it really is the nail in the coffin for rural neighborhoods. They are the anchor of the community, and when you lose them they are tough to get back,” commented Kyle Kopec, Chief Compliance Officer and Vice President for Braden Health, a company that buys failing rural hospitals and reopens them.
Larger hospitals can shoulder the burden of uninsured patients in their emergency rooms far better than a smaller rural hospital, said the Center for Healthcare Quality & Payment Reform (CHQPR), a national policy center that has been trying to build awareness about this rural hospital crisis.
“While most urban hospitals and large rural hospitals make profits on patient services, most small rural hospitals lose money delivering services to patients,” the CHQPR said. “The biggest cause of these losses is inadequate payments from private insurance plans. Although large hospitals can offset losses on Medicaid and uninsured patients with the profits they make on patients with private insurance, small rural hospitals cannot.”
