Editor's note: This story has been updated with a comment from Austin Mayor Steve Adler.
At a time when most hospitals are ramping up capacity to treat a massive number of patients who may become infected with COVID-19, rural hospital administrators say financial hardships could force them to do the opposite.
Before the contagious new coronavirus arrived in Texas, rural hospitals already faced a bleak financial forecast. Demographic shifts, high shares of uninsured patients and cuts to the facilities’ Medicare payments have for years led hospital administrators to abandon small-town markets where they could not turn a profit. In Texas, 26 rural hospitals have closed since 2010, according to a rural hospital trade association; roughly 160 remain.
Now hospital administrators say necessary public health precautions undertaken to slow the spread of COVID-19, such as the cancellation of elective surgeries — which are one of the hospitals' most lucrative income streams — threaten to hasten the rate of closures. A 2017 study found that roughly 41% of rural hospitals in the U.S. operate at a loss.
"If we're not able to address the short-term cash needs of rural hospitals, we're going to see hundreds of rural hospitals close before this crisis ends," Alan Morgan, the head of the National Rural Health Association, recently told Kaiser Health News. "This is not hyperbole."
John Henderson, chief executive of the Texas Organization of Rural and Community Hospitals, said help "can't come fast enough."
“Facing critical supply shortages, maxed-out lines of credit, growing payables and disappearing revenue streams, cash-strapped rural Texas hospitals are having to make layoffs to meet payroll,” he said. “And this is happening in a moment when we must build and sustain surge capacity.”
At Rolling Plains Memorial Hospital, a facility in Sweetwater that’s licensed for 86 beds but typically operates only about 35, there are six intensive care unit beds available in case of a surge in patients with COVID-19, the disease caused by the new coronavirus. The hospital, west of Abilene, has three ventilators and could add two that are in ambulances, said Donna Boatright, the hospital’s administrator. She and other administrators said they were getting creative to stretch a limited number of staff members, including cross-training nurses from other wards in preparation for ICU shifts.
Even before Gov. Greg Abbott ordered Sunday that hospitals postpone “all surgeries that are not medically necessary," Rolling Plains physicians had begun consulting with patients to determine if their scheduled surgeries could be put off. The rationale is to keep beds ready for a surge of patients and reduce everyone’s risk of exposure.
But it comes with a cost, Boatright said.
“Every time we cancel one, it cuts our throat a little deeper,” she said. “My No. 1 charge is to care for my community, but at the same time, many of the things we’re having to do are the very things that are going to increase our expenses, or reduce our revenue, or both.”
Many patients also have canceled routine doctor’s appointments, she said, which is another lost source of revenue. And amid a shortage of personal protective equipment, prices for face masks, gowns, hand sanitizer and cleaning wipes have skyrocketed.
“We’re having to cut some of our discretionary activities so we don’t use up some of our very necessary supplies we’ll need when the tsunami hits,” Boatright said. “We will have a surge.”
The American Hospital Association asked the federal government last week for $100 billion to help cover the coronavirus response.
“Some facilities and practices are able to absorb significant losses for a period of time but others, such as rural facilities, are not,” U.S. hospital, doctor and nursing leaders wrote to members of Congress.
Meanwhile, official plans for more restrictions on hospital payments have worried rural administrators. The Trump administration proposed a “fiscal accountability rule” in November that would limit the amount of federal dollars flowing to hospitals under Medicaid, the federal-state insurance program for the poor and disabled. The Texas Hospital Association estimated the rule change would reduce Texas hospitals' annual revenues by about $11 billion.
The costs of COVID-19 are harder to estimate.
Abbott, in a Monday request for disaster assistance from the Trump administration, focused on the burdens faced by rural communities responding to the pandemic.
“For example, Shackelford County was forced to close their one medical clinic due to a lack of [personal protective equipment],” the governor wrote. “This could continue to occur in areas of the state with limited medical care resources as COVID-19 spreads to those communities.”
Austin Mayor Steve Adler told the Tribune on Wednesday that the virus "is going to be and is everywhere. So when it hits those [rural] communities, and it will, they're not going to be in the position to be able to deal with it, so where do they go? They're going to be reaching out to the big cities ... and the big cities aren't going to be able to take care of themselves unless we can reverse this [pandemic]."
Jeff Turner, chief executive of the Moore County Hospital District, said the revenue losses from canceling elective procedures are painful.
“The long-term effect, financially, is going to be devastating to rural hospitals," said Turner, whose Panhandle hospital has 25 beds.
“We are self-imposing a devastating thing to us financially in an effort to try to attenuate this virus,” he said. “It’s going to be a problem if this goes on for long, or if we don’t have some governmental relief. We just don’t know to what degree that is going to occur at this point.”
Emma Platoff contributed reporting.
Disclosure: The Texas Organization of Rural and Community Hospitals and the Texas Hospital Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.