CAMERON — Days after the two hospitals in Milam County abruptly shuttered in December, Renee Mueck started feeling stomach pain so sharp she couldn’t drive herself to the nearest hospital about 40 minutes away.
Mueck, 60, said her husband drove her to a hospital in Temple, but her appendix burst before emergency room doctors could operate on it.
“It’s been devastating to everybody because in an emergency now, you have to run to Temple or to Bryan-College Station,” Mueck said. “There’s not a local facility, and it makes it hard on everybody because you never know what you’re going to need emergent care for.”
The Central Texas hospitals in Rockdale and Cameron, about a 1½-hour drive northeast of Austin, are among the latest hospitals to close in the state, which, because of its size and vast rural areas, leads the nation in rural hospital closures.
Since 2010, 17 of the nation’s 100-plus rural hospital closures — which include facilities that have stopped offering short-term, acute inpatient care — have occurred in Texas, with little sign that the number is leveling off. The hospital in Chillicothe, about 65 miles northwest of Wichita Falls, closed Monday, and the hospital in Hamlin, about 40 miles northwest of Abilene, is expected to close Thursday.
About 16 other rural hospitals in Texas are at risk of closing because of financial difficulties, according to University of North Carolina researchers.
There are about 160 hospitals in small towns across Texas.
Following trends seen across the nation, Texas’ rural hospitals struggle financially because of low Medicaid and Medicare payments from the state and federal governments and the fact that there aren’t enough patients walking through their doors. Not only are rural populations dwindling, but many small-town Texans prefer to drive 40 or 50 minutes to a hospital in a larger city, where they believe they will receive better care than in their own community. Those relying on the smaller local hospital tend to be sicker, older and less likely to be insured, meaning they’re more expensive for the hospital to treat.
Desperate to build revenue, some hospitals have turned to questionable practices, including billing for high volumes of lab tests in apparent violations of contract with insurers.
Research has also shown that states that haven’t expanded Medicaid have higher numbers of rural hospital closures. Advocacy groups, hospital operators and some local officials are convinced that if the state expanded Medicaid, something Texas’ Republican leaders have been loath to do, more rural residents would be insured, lifting some of the financial burden from hospitals, which lose millions of dollars each year in uncompensated care.
“I would say do it. Why wouldn’t you?” Milam County Judge Steve Young, a Republican, said about expanding Medicaid. “For the time being that we can get it, maybe we can have a hospital here.”
Without a hospital
Grass grows high around the one-story Cameron hospital. Inside, the air is hot and still in the darkened hallways. With most of the expensive medical equipment sold off, carts of gauze and syringes and old hospital beds and chairs are among the few reminders of the building’s original purpose.
Little River Healthcare acquired the Cameron and Rockdale hospitals in 2014 after the previous owner, Tariq Mahmood, was found guilty of defrauding Medicare.
But business proved difficult. The Cameron hospital lost money three years in a row before generating a profit of $3.2 million in 2017. The Rockdale hospital lost $30.2 million that year.
Unable to pay its expenses or find a buyer, Little River Healthcare filed for bankruptcy last July and on Dec. 7 shuttered 18 facilities, including the Milam County hospitals and clinics in Austin and Georgetown. The company reported to the Texas Workforce Commission that it would be cutting hundreds of jobs. Doctors closed up shop, leaving patients scrambling to track them down or to find other sources of care.
Shortly before it closed, Little River was accused of billing insurers for a high number of tests or expensive tests for out-of-state patients, according to the news outlet Modern Healthcare. Claiming Little River had violated terms of their contracts, insurers have refused to pay its lab claims or have tried to recoup money already paid.
At their peak, lab charges made up 86% of the Rockdale hospital’s gross revenue in 2016 and 45% of the Cameron hospital’s gross revenue in 2017.
Desperate to find a way to make money, other rural hospitals across the country have used such lab billing practices, leading to lawsuits and state investigations.
“Little River saw lab services as expanding its ability to sustain losses that it had on other lines of service. You don’t get high reimbursement rates for Medicaid and certain patients,” said Andrea Cunha, the former general counsel for Little River.
Texas rural hospitals lose about $170 million a year on Medicaid and an estimated $50 million annually on Medicare, according to the Texas Organization of Rural and Community Hospitals.
Cunha said Little River’s demise was also due to ambition. In recent years, the company had acquired two other hospitals — in Oklahoma and the East Texas city of Crockett — and was working to purchase another hospital, also in Oklahoma.
'You just continue to hurt'
When Little River closed, 51-year-old Virginia Hubnik’s rheumatoid arthritis doctor also left. The closest specialist is in Waco, requiring her to take a half-day off work for appointments. Recently, she experienced a painful inflammation near her joints, called bursitis, which she endured for months because she couldn’t make the trip to Waco.
“You just put up with it. You just continue to hurt until you have to go,” Hubnik said.
Texas A&M University researchers are studying the impact of Texas rural hospital closures on the health of a community, including whether there is a higher hospitalization rate and higher mortality rate.
Nancy Dickey, executive director of the Texas A&M Rural Community and Health Institute, said national data suggests there is a much higher mortality rate from motor vehicle accidents in rural areas because there’s often a delay in access to trauma care.
“When we add to that the other golden hour problems like heart attacks and strokes, we may find that closing a hospital has an impact on the morbidity for that population,” she said.
Shortages of physicians and health care workers are especially acute in rural areas, making it difficult for hospitals to sustain an adequate staff and further whittling away access to health care.
Dickey added that rural hospital closures also have an economic impact on the community because hospitals are typically among the top employers. Research has shown that the elimination of a hospital also can make a community less attractive to businesses and retirees looking to relocate, said George Pink, deputy director of the University of North Carolina’s North Carolina Rural Research Program, which tracks rural hospital closures nationally.
“I was at a conference a few months ago when the mayor of a town where the hospital closed said the biggest impact on his town was that they couldn’t recruit teachers anymore,” Pink said. “They don’t want to raise children in towns without proper health care, so there is a lot of collateral damage that happens that is not so obvious.”
Texas is one of 14 states that has not expanded Medicaid, which insures low-income people as well as people with severe disabilities or near-death illnesses, children from low-income families, seniors and pregnant women. Expansion of the federal and state-subsidized health insurance program could cover 686,000 Texans who make too much to currently qualify for Medicaid yet earn too little to qualify for tax credits to purchase Obamacare through healthcare.gov, according to the Kaiser Family Foundation, a policy research organization.
Expanding Medicaid coverage also could make an additional 439,000 Texans eligible for Medicaid, those eligible for Obamacare but just above the federal poverty level.
Having more insured patients would have meant better payments to the hospitals. In 2017, the Rockdale and Cameron hospitals lost $17.5 million to uncompensated care, about 4% of their gross patient revenue. The uninsured rate in the county was 19% in 2015.
“The data is pretty overwhelming that states that took Medicaid expansion have experienced lower percentages of hospital closures because they have measurably reduced their uninsured population,” Dickey said.
Republican state leaders reject Medicaid expansion because they say they don’t trust the federal government to fulfill its promise to reimburse 90% of the cost. Expansion opponents also say the program is riddled with problems, including providing inferior quality of care.
“Medicaid expansion would not solve the crisis we are facing in our state’s rural hospitals,” Sen. Lois Kolkhorst, R-Brenham, chairwoman of the Senate Health and Human Services Committee, said in a statement. “It has been said repeatedly by hospitals that they lose money on Medicaid payments. It is not clear how more Medicaid payments would solve hospital financing issues.”
Don McBeath with the Texas Organization of Rural and Community Hospitals said it’s better to recoup some money from Medicaid than not receive any money from uninsured individuals who aren’t able to pay their medical bills.
The Legislature this year passed a law to require that rural hospitals be paid the full cost of providing care to Medicaid patients. But lawmakers appropriated just $53 million more a year in Medicaid payments to rural hospitals, a fraction of the $170 million they’re shorted in Medicaid funding a year.
“We’ve got to square up the Medicaid payments,” McBeath said. “We’re very happy and pleased that we got about a third of the way this session, but … it’s unfortunate that we couldn’t fix the problem.”
Rep. James Frank, R-Wichita Falls, chairman of the House Human Services Committee, sponsored a bill, signed into law, that will allow small rural hospitals to establish health care collaboratives to better negotiate with insurance providers. Another bill passed this year establishes local provider participation funds in various regions. These funds support hospitals with supplemental payments using local dollars to draw down federal Medicaid dollars.
Federal leaders are mulling new models of free-standing emergency rooms with different payment mechanisms that include Medicare funding.
“There are no obvious alternatives to an inpatient hospital. There’s really the community health center, primary care clinic or urgent care clinic but nothing in between,” Pink said. “We need to step up the pace of innovation, try new things in different communities.”
As of now, the hospitals in Milam County appear to be shuttered for good. Young is working on trading some of the county-owned buildings in downtown Cameron for the hospital building, which is currently owned by the bank and in much better condition, to house most of Milam County’s departments.
Robert Kirkpatrick, the county’s health department director, said he’s trying to gather more input about how to improve rural access to urgent care that’s also profitable. Until then, he wants to reduce the need for other hospital services by educating the public on being healthy.
“Hospitals should be for emergent care, not necessarily for chronic disease medical attention. We need to get the population to become healthier as a whole so that chronic problems aren’t there and we are able to focus on medical emergencies in hospitals,” he said.