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Rural hospitals, already under financial strain, struggle to make payroll during pandemic

Chronically under-funded, the response to COVID-19 cases is compounding financial instability of rural hospitals in Texas.

DALLAS — We're hearing a lot about flattening the curve so COVID-19 cases don't overload hospitals.

In our big city hospitals, that hasn’t happened yet but the pandemic is already compounding a crisis for rural hospitals that serve 3 million Texans.

For years, these communities have faced a slow-moving crisis. Their hospitals -- if they even have one -- are chronically under-funded. In the last 10 years, 27 have failed.

I last saw Jeff Lyle in 2018. He runs the Falls Community Hospital in Central Texas and he was struggling to stay open. Falls Community ended 2019 with a razor-thin 14-thousand-dollar surplus.

“Most rural hospitals in the country work off a margin that's between zero and one percent. That's not a book of business you necessarily want to go into,” he said.

Lyle said the pandemic now significantly compounds the financial strain he was already feeling.


To prepare for infected patients, Governor Greg Abbott has ordered medical facilities to "...postpone all surgeries and procedures that are not immediately, medically necessary…"

That means rural hospitals are unable to perform services that bring in revenue while, at the same time, they're spending un-budgeted money to prepare for COVID-19 cases.

“We're back-ordered on N95 masks. We're back-ordered on isolation masks. We're back-ordered on gowns, isolation gowns. We're back-ordered on face shields,” Lyle said.

John Henderson is the president of the Texas Organization of Rural & Community Hospitals.

“Does this mean more hospital closures at some point?” I asked him.

“I worry about a wave of rural Texas hospital closures in the next month or two. They are struggling to make payroll this week. And they're going to have to go through three or four more cycles of that,” Henderson said.

Henderson said the governor's office is actively discussing financial plans that would support rural hospitals. Hospitals that, for the most part, are not equipped to handle the most critical patients.

“How many ventilators are there available in rural Texas?” I asked.

“A few weeks ago, we anticipated that question and surveyed our members. Among the 157 rural Texas hospitals we estimated that there are about 300 vents. That's two per hospital,” Henderson said.

In ordinary times, a rural patient in critical need of a ventilator is transported to a big city hospital for care. But what happens if big city hospitals are too full to relieve underfunded rural hospitals? It's a question Texas has never had to answer before.

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