‘A Fiscal Cliff For Texas Health Care: Rural Hospitals At Risk Of Shutdown As Federal Relief Ends

Texas hasn't seen a hospital close since 2020, a much-needed relief after the last decade's closures in mostly rural communities.

That could change soon: A new report released Wednesday by health consultancy Kaufman-Hall shows that one in 10 Texas hospitals is at risk of closure, twice as many as before the coronavirus pandemic began in 2020.

"Ultimately, our concern is that this will impact patient care," said John Hawkins, president of the Texas Hospital Association.

Report highlights the significant toll the pandemic is taking on hospitals across the state, which are under increasing pressure from rising respiratory illnesses, staff shortages, and rising costs for medicines, medical supplies, and labor . This has significantly increased hospital spending: Spending in Texas hospitals is $33.2 billion higher this year than before the pandemic.

While the risk is high for all hospitals in Texas, it is higher for rural hospitals than for urban facilities: The risk of closure is 26%, compared with 5%. Hawkins said there are concerns about challenges rural hospitals may face in the near future.

Health experts have long recognized the need to support federal spending spurred by the COVID-19 pandemic to reduce the risk of closures in 2020 and 2021. But that money will soon run out and hospitals will be left without that financial safety net. Nearly half of all hospitals in Texas have negative operating margins because revenue doesn't cover the cost of patient care.

"We know that because we're running out of federal funding, we've created a fiscal chasm," Hawkins said. "These operational challenges will remain real for rural hospitals."

Hospitals are already cutting service lines and closing access points to balance finances, Hawkins explained, which can happen even if a hospital isn't fully closed. The community served by the hospital will be affected in both cases as this will result in the loss of staff.

"Hospitals are typically one of the largest employers in the community, especially in smaller areas," Hawkins said. "So because they're limiting services and they can't fill those jobs, it's having a huge impact on the economy."

The Texas Tribune is a non-profit media organization that informs Texas on law and order, politics, government and state matters.

TAMEST Talk on COVID-19: Sanitary Engineering and Facility Design