Prognosis is grim for rural hospitals in Oklahoma
FREDERICK — It's hard for Ralph Washburn to walk through the dark halls of Memorial Hospital.
This is where Washburn was born — in one of the rooms now used for storage, stacked with mattresses and IV poles.
“It feels terrible to see it like this. It used to be full of life,” said Washburn, director of Tillman County Emergency Medical Services, who also oversees many duties at the hospital and an attached community nursing home.
Memorial Hospital stopped offering inpatient treatment and closed its emergency room last March as a result of declining traffic and decreased Medicaid reimbursement rates.
Since Memorial Hospital closed at Frederick, the call volume at Tillman County EMS has increased by about a third, because many elderly or poorer patients can't drive to the nearest emergency rooms between 30 and 50 miles away in Lawton, Altus or Vernon, Texas.
One round trip to Comanche County Memorial Hospital in Lawton can be 100 miles, meaning what used to be a 30-minute transport for Washburn can turn into two and a half to three hours on each call.
Since 2011, nine rural hospitals have filed for bankruptcy in Oklahoma in towns like Drumright, Prague, Seiling, Fairfax, Stigler, Pauls Valley, Vinita and Atoka. Hospitals in Eufaula, Frederick and Sayre have closed under financial strain.
Aging, shrinking rural communities, combined with Oklahoma's decision not to expand Medicaid as part of the Affordable Care Act and cuts to Medicaid reimbursement rates, have created a financial crisis for many of the state's smaller hospitals.
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The Oklahoma Health Care Authority, which oversees Oklahoma's Medicaid program, has seen $446,063,500 in total Medicaid funding cuts since 2010, forcing several successive reimbursement rate cuts for health care providers. That figure includes matching federal dollars Oklahoma loses out on for each state dollar that gets cut from the program.
Even more cuts to Oklahoma Medicaid payments could be on tap for providers in the next fiscal year as the state looks at ways to fill a nearly $900 million budget hole.
In 2010, providers saw an across-the-board 3 percent rate cut in Oklahoma. Rates were reduced another 7.75 percent in 2015 and another 3 percent on Jan. 1, 2016.
Currently, Medicaid reimburses Oklahoma hospitals about 99 percent of cost, so many hospitals lose money on Medicaid patients.
"It's death by a thousand cuts that are not that big, but you put them all together and they are significant," said Andy Fosmire, vice president for Rural Health at Oklahoma Hospital Association. "Populations are declining in rural areas and folks in rural communities tend to be older, poorer and sicker than their urban counterparts."
Hospitals brace for more cuts
Gov. Mary Fallin's current proposed 2018 budget includes a proposed 11.2 percent funding increase for the Oklahoma Health Care Authority, targeted for Medicaid-related programs.
However, the proposal includes increasing cigarette taxes by $1.50 per pack to pay for health care funding in the state. It remains unclear whether the tax increase proposal has enough support in the Legislature to pass this session. A similar tobacco tax increase proposal was unsuccessful in 2016.
Rural hospital administrators say they desperately need a reprieve from years of successive cuts.
It's too soon to tell this budget year whether provider rates will have to be cut again, said Jo Kilgore, spokeswoman for the Oklahoma Health Care Authority.
"It's hurting all of our providers. We are just trying to protect Medicaid providers as much as we can," Kilgore said. "We are just trying to make sure we pay all of our providers an adequate rate so they can continue to participate in the program."
The Oklahoma Legislature has asked some state agencies to prepare hypothetical worst-case scenario budgets for the coming year with nearly 15 percent funding cuts.
Roberta Jeffrey, CEO at Holdenville General Hospital, said she and other hospital administrators are bracing for more cuts this year in provider reimbursement rates.
Holdenville General Hospital already has burned through its cash reserves over the past few years to remain in operation, Jeffrey said.
"All it's going to take is one more thing to possibly be devastating," she said.
If Holdenville General Hospital has to close its doors, Hughes County residents who use the facility would have to travel up to an hour away to Shawnee, Ada or McAlester for treatment, Jeffrey said.
"And a lot of times, time means lives," she said.
Roger Knak, CEO of Fairview Regional Medical Center, said people would have to drive to Enid for care if the Fairview hospital had to close. Many rural hospitals are being forced to decide what services to eliminate, or whether to close altogether.
"There comes a point you can't cut another service line," Knak said. "I think we've seen a lot of hospitals have just figured out they have no choice but to close their doors as an inpatient hospital."
Not giving up in Frederick
The numbers simply didn't work to keep the Frederick hospital open, said Brent Smith, CEO of Lawton-based Comanche County Hospital Authority, which managed Memorial Hospital.
Memorial Hospital saw an average of eight patients a day in the ER before the decision to close the facility in 2016, Smith said.
Comanche County Hospital Authority also recently bowed out of managing the adjacent community nursing center at Memorial Hospital in Frederick, which had become underutilized and unprofitable with the closing of the hospital.
Comanche County Hospital Authority still continues to manage an outpatient clinic at Frederick, but that could change if Medicaid payments continue to decline, Smith said.
"If rates continue to decrease at the rate they have in the past 4 or 5 years, hospitals and other health care providers are going to have to start looking at all the services they provide to see if they are sustainable," he said.
Tammy Crosswhite, director of nursing, once oversaw a nursing staff of about 25 at Memorial Hospital in Frederick. The facility also once saved her father-in-law's life after he suffered a heart attack — he lived for another 10 years after being treated at Memorial Hospital before it closed.
"It's difficult to see it closed, because it's a service our community still needs," she said.
The City of Frederick and the Tillman County-City of Frederick Hospital Authority Public Trust say they are not giving up on reopening Memorial Hospital. There have been talks with at least three nonprofit groups to reopen the facility, as well as with groups to take over management of the nursing home facility at the hospital, said Gary Tyler, chairman of the hospital board.
"We think lives matter in Tillman County as much as they do anywhere else," Tyler said.