It’s no secret that rural and community hospitals in Texas are at a serious disadvantage compared to urban TX hospitals. In fact, according to a report by Kaufman Hall, 1 in 4 rural TX hospitals was in danger of closing in 2022. By comparison, just 5% of urban hospitals found themselves in that same position that year.
Texas rural and community hospitals are sorely needed, given that they play an indispensable role in providing life-saving care to rural Texans. That’s why it’s important to bring awareness to the specific issues these healthcare facilities face. In this article, we’ll share some of the top issues facing rural and community hospitals in Texas. We’ll also present some practical solutions to help your hospital stay afloat in today’s challenging healthcare environment.
Financial Constraints
Perhaps the most well-known issue that rural and community hospitals in Texas face is financial instability. And one of the most influential factors behind this hardship is inflation, which drives up operational costs for facilities. Inflated prices for medical supplies, machinery, healthcare staff, and more eat away at facilities’ bottom lines.
In addition to inflation, rural and community hospitals in Texas receive extremely low reimbursement from government payers. Texas Medicaid is notorious for its low reimbursement rates, as well as underpayments that don’t nearly cover the cost of providing patient care.
Most Texans who seek care at rural hospitals tend to be older and poorer than those in urban TX areas and qualify for a government health plan. Therefore, refusing to provide care to Medicaid and Medicare recipients isn’t an option for every hospital. What’s more is that uninsured Texans aren’t always able to pay their hospital bills out of pocket.
All of these factors contribute to negative operating margins and low cash flow for TX hospitals located in rural or community settings.
Staffing Shortages
Throughout the pandemic, hospitals all over the world grappled with widespread staffing shortages. There weren’t enough hospital staff to go around due to burnt-out nurses leaving the industry, healthcare professionals catching and dying from COVID, and a lack of new nursing graduates. Though the COVID crisis has begun to abate, and many hospitals are now better staffed, rural hospitals are still dealing with healthcare staff shortages.
The problem with finding qualified staff to work in rural hospitals is that the talent pool in these areas tends to be sparse. Therefore, finding individuals to fill specialized positions can be next to impossible. As a result, these hospitals have to operate with glaring talent gaps, and patient care suffers. Adverse patient outcomes due to care mistakes lead to even higher costs for facilities.
In addition to that, understaffed hospitals may not be able to discharge patients promptly. The extra time patients remain in the hospital isn’t always billable, further compounding financial issues for facilities.
Lack of Resources
A large number of rural TX hospitals lack the equipment and technology necessary to serve their patient population. Resources like quality EMR systems, specialized medical machinery, and modern diagnostic tools are financially out of reach. Unfortunately, this translates to less-than-ideal patient care scenarios, costly medical errors, long wait times, fewer treatment options, and a plethora of other issues.
Fragmented Care Options
As a consequence of staffing shortages, financial woes, and other issues, some rural Texas hospitals aren’t able to offer a full array of healthcare services. That’s why Texans may stumble upon rural hospitals that don’t offer labor and delivery, inpatient, or emergency services. Some hospitals were completely converted into emergency rooms, primary care offices, and urgent care facilities, where only one line of healthcare services is offered. These drastic service line cuts are sometimes necessary to keep hospitals operational.
Solutions Texas Rural Hospital Management Should Consider
From 2010 to 2020, 26 rural TX hospitals shut down, likely due to a combination of the issues we mentioned above. But what can be done about it? There are lots of solutions the government could implement to make things easier on rural hospitals, including implementing a patient-centered payment system, bumping up Medicare and Medicaid reimbursements, and increasing funding for affected hospitals. The reality, though, is that hospitals have to survive now – reform or not.
Just because the cards are stacked against rural and community hospitals in Texas, that doesn’t mean these hospitals are doomed to fail. There are practical solutions that every hospital management professional should consider to promote financial health, quality care provision, and sustainability in their facility.
Utilize Telemedicine
Whenever possible and appropriate, rural hospital managers should consider utilizing telemedicine. Though it can be difficult to facilitate the adoption of new technology, telemedicine can open any facility up to a wider service area and a larger patient population. Those who wouldn’t care to venture out to a remote area could still receive healthcare services, and the facility could save on overhead costs by not having to see every patient in-person.
A few services that can be conducted virtually include:
- Skin observation
- Post-surgery follow-ups
- Monitoring of chronic conditions
- Evaluation and treatment of common illnesses, like colds and digestive problems.
*This is not an exhaustive list of potential telehealth services.
The thought of investing in new technology or software can be daunting for an already-struggling facility. But with sufficient planning and a thoughtful rollout, things may go a bit smoother.
Look Past Federal Funding
Federal grants and programs are usually sought out by hospitals and other healthcare facilities to alleviate financial strain. But what if these funding opportunities either don’t pan out or prove to be insufficient? Seek out alternative avenues of monetary assistance, including state-funded programs and private initiatives and grants.
Grants can be difficult to obtain, so management should ensure that there’s a capable team, or designated person, in place to seek out and apply for grants the hospital qualifies for.
Get a Handle on Accounts Receivable Management
Even for small rural hospitals with low patient volume, it’s easy to fall behind and miss out on outstanding payments. Therefore, it’s extremely important to have staff in place to manage accounts receivable. For facilities that aren’t able to hire and train an in-house team, revenue cycle services are available. Outsourcing accounts receivable functions to an experienced firm takes work off of the facility’s plate so management can focus on other things.
Network with Other Rural TX Hospitals and Organizations
Though management at rural TX hospitals may feel like they’re operating in isolation, they’re not alone in their efforts. A variety of hospitals and organizations, such as the Texas Organization of Rural & Community Hospitals (TORCH), provide valuable support in the form of guidance, grants, and more that management can tap into.
We hope that this article has shed some light on the plight of rural TX hospitals and potential solutions to combat the unique challenges they contend with. And we hope to see you at the TORCH conference on April 11th.