LA GRANGE — The governing Board of St. Mark’s Medical Center (St. Mark’s) voted unanimously to pursue becoming a Rural Emergency Hospital (REH) to allow the hospital to remain open and continue to provide select medical services to the community. Effective Feb. 18, St. Mark’s will only offer 24/7 emergency medical services, patient observation, and select outpatient services. This new option for St. Mark’s is possible through a recent Congressional Rural Emergency Hospital, or REH, designation for financially struggling rural hospitals, and was adopted under emergency rule by the Texas legislators on Jan. 13.
The REH model is designed to maintain access to emergency and critical outpatient services in communities that may not be able to financially support or sustain a community hospital. To qualify for the new hospital designation, inpatient services may not be offered, however, 24/7 emergency services must be maintained to assess, stabilize, and when needed, transfer patients to other facilities for more advanced care.
Select outpatient services are also eligible within the designation, and hospitals approved for the designation will receive an increase in reimbursement for relevant outpatient services as well as a monthly facility payment from Medicare. Changes at St. Mark's will include: St. Mark’s Services Continuing
• Emergency Services - 24/7 • Observation • Laboratory • Imaging and X-Ray
• Mammography • Nuclear Medicine • Pharmacy • Physical and Occupational Therapy • Respiratory Therapy • Cardiac Rehabilitation • Cardiovascular Imaging Center • Wound Care 2 • Sleep Study Services Closing, effective Saturday, Feb. 18 • Inpatient Services • Surgical Services • Swing Bed (Post-acute Skilled Rehab Care) • Orthopedic Clinic
• Ambulatory Care • Speech Therapy Patients scheduled for upcoming elective services that require inpatient, or surgical care on Feb. 18 or after, should consult with their physician for options.
“For the decade that I have served on the St. Mark’s Board, we have struggled to make ends meet, including considering bankruptcy on more than one occasion. Even before the Hospital District proposal was defeated in 2019, our board and leadership team grappled with repaying our $13 million mortgage debt and offering the services that our community desired,” said Dudley Piland, St. Mark’s Board Chair. “We could have faced closure had it not been for COVID related funding and an agreement with our mortgage lender to pay interest only — and not the principal — since February 2020.”
“The new REH designation is the first significant change to Federal hos pital designations in over 25 years, and shows that our government recognizes the unique challenges that rural hospitals face. Without this new Federal program, St. Mark’s would be forced to close the doors in the first quarter of 2023, an out come that no one wanted for the staff, their families or our community,” Piland continued. “St. Mark’s is a blessing to have in our region, and we are commit- ted to finding a way to keep it open in some capacity.” Board Chair Piland added, "St. Mark's is among the first hospi tals in Texas to pursue the new REH model which is the next step in securing St. Mark's finan cial future. We believe we have a path forward for the next year to allow us to secure funds from Federal, State and local sources to assure the long-term viability of St, Mark’s.” “The availability of this new rural healthcare model came at a critical juncture,” said Mark Kimball, St. Mark’s President and CEO. “While temporary Federal COVID-related funding helped many hospitals, including St. Mark's, stay afloat during the pandemic, the impact of COVID to health care nationwide was devastating.
Costs skyrocketed with no offsetting reimbursement increases from payers such as private insurance, Medicare or Medicaid.” “Labor, like in most other busi- nesses, is a significant operating cost for St. Mark’s,' continued Kimball. “Current labor costs for staff and contracted labor increased by 31% compared to pre-COVID labor costs. Other costs for supplies and medicine have also been impacted by inflation.
3 Factor in reduced patient volumes and uncompensated care to the equation, and you have an insurmountable situation for St. Mark’s.”
“Our board and leadership team have exhausted every oth- er financial avenue - from cost cutting to partnering with a hospital system or a full-on sale, as well as, seeking funding from our state and local governments to remain open,” Kimball added. “We are grateful to the Texas leg- islators, specifically the Health and Human Services Committee and Senator Lois Kolkhorst who Chairs that Committee, who valued rural hospitals enough to pass emergency legislation to help implement this new healthcare model (REH). We are optimistic that with this new REH designation, St. Mark’s can remain a viable, local healthcare facility. That being said, the revenues from the REH depend on how much the community utilizies St. Mark’s for their healthcare needs,” Kimball stressed. “Similar to other rural areas, our community frequently utilizes us for emergency and outpatient services, but bypasses us for many inpatient and surgical services,” added Kimball. “Even with this new designation, paying the mortgage will continue to be a challenge and St. Mark’s will need additional financial support from the community to survive.”
St. Mark's financial struggles are not unique in Texas, according to research from the Rural Health Research Program in conjunction with Cecil G. Sheps Center for Health Care Research at the University of North Carolina: • Between January 1, 2010, and February 2, 2023, 143 rural U.S. hospitals closed; Texas accounted for 24 of them, more than any other state (none since 2020) • The percent of Texas hospitals at serious risk of closure has nearly doubled since 2020, to 9.2%
• Nearly half of Texas hospitals have seen negative operating margins in 2022, meaning hospital revenue is not covering the cost of patient care.
Patients needing emergency care should always call 911, and St. Mark’s Emergency Department remains open 24/7. “When you live in a small community where people know and look out for each other, decisions that affect your friends and neighbors are very, very hard,” said Kimball. "The Board and our leadership team looked for any way to avoid job and healthcare service losses. Rural Emergency Hospital is the only viable option at this time. If our patient volumes increase and financial status improves, one of the ben- efits of becoming an REH is that St. Mark’s could reopen inpatient and surgical services. St. Mark’s employees should all be proud of what they have accomplished as a team, as evidenced by recent local and national quality and safety recognitions.”
