Crisis in the Country
By Sean Price Texas Medicine November 2017

What Can Rural Physicians and Their Communities Do When the Local Hospital Shuts Down?

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Practice Management Feature — November 2017

Tex Med. 2017;113(11):55–59.

By Sean Price

In 2016, the Gulf Coast Medical Center in Wharton passed away after a long illness. It was survived by a town of nearly 9,000 people with no nearby hospital.

"Since they shut it down, there's been a huge impact on the community," said Gregg Dimmick, MD, a pediatrician who practiced in Wharton for 37 years before retiring in July. "For all your after-hours minor injuries, you [used to] go to the [Wharton] emergency room. But now if you've got an after-hours injury, it’s a 20- or 30-minute drive [to the nearest hospital]. And not everybody has transportation."

Local physicians also have felt the impact in lost business and greater difficulty serving patient needs, Dr. Dimmick says. Some of the nearest large hospitals are in Bay City or the Houston suburbs, both about 40 or 50 minutes away. And recruiting new colleagues to the area has become more difficult as well. 

"Most of us have been involved in building and supporting that hospital for years," Dr. Dimmick said. "I mean, that was our hospital. So I think, more than the financial impact, it's just hard to see."

The Wharton hospital's passing is part of a much larger epidemic among rural facilities. According to the North Carolina Rural Health Research Program, 82 rural hospitals have closed in the United States since 2010, and the Chartis Center for Rural Health reports that another 673 are in precarious financial shape.

David Pearson is president and chief executive officer of the Texas Organization of Rural and Community Hospitals (TORCH), which represents 163 rural facilities. He says Texas is in the unenviable position of leading the country in rural hospital closures. Since 2013, 18 have closed permanently or for a period of time, and dozens more are endangered.

"It doesn't sound like a lot," Mr. Pearson said. "But it's about 10 percent of all the rural hospitals. Compared to other states, we've closed twice as many as the nearest state."

The prospect of more closures raises questions about how communities ― and area physicians ― can help fill the gaps in medical care left by a hospital's departure. Last spring, the Texas A&M Rural and Community Health Institute (ARCHI), working with the Episcopal Health Foundation, issued a report titled What's Next? Practical Suggestions for Rural Communities Facing a Hospital Closure.

The idea behind the report was to provide alternatives to traditional hospital care that could help rural patients, such as creating stand-alone emergency departments and relying more heavily on telemedicine, says Nancy Dickey, MD, executive director of ARCHI. Filling the void left by a rural hospital is a community effort, but it is often led by physicians, she says. Ultimately, they will be the ones who will have to provide the services lost when a local hospital shuts its doors. 

"We had more than one provider come to us and ask, 'Isn't there anything anyone can do to help? What is my town supposed to do for health care?'" Dr. Dickey said.

Losing Count

Mr. Pearson says the crisis in rural hospitals starts with demographics. Those hospitals treat a relatively small share ― about 3.1 million ― of Texas' 27.7 million residents. Those patients tend to be spread out over broad geographic areas. Of Texas' 254 counties, 172 are considered rural. The Texas Demographic Center says that if current trends hold, 95 percent of Texas' growth will take place in metropolitan ― not rural ― areas in the foreseeable future. 

For these and other reasons, TORCH says rural hospitals face different challenges than their urban counterparts. Because populations are smaller, the volume of patients can swing wildly from one day to the next. Rural populations also tend to be older and poorer, so people often have more serious chronic health problems, such as heart disease and diabetes. That also means rural hospitals deal with more Medicare, Medicaid, and uninsured patients than do urban facilities.

Many of the recent Texas closures were caused in part by congressional Medicare cuts totaling more than $50 million a year for Texas rural hospitals, Mr. Pearson says. The closures also were fueled by underpayments in the Texas Medicaid program to rural hospitals approaching $60 million a year. Texas' refusal to expand Medicaid under the Affordable Care Act also hurt rural hospitals, he says.

"If you couple the shrinking reimbursements with the ever-increasing costs of running a small, isolated, low-volume hospital in a rural area, what you tend to get eventually is a financial scenario that doesn’t balance costs and revenues," he said.

According to the 2017 Rural Hospital Environmental Impact Study prepared by TORCH and the Episcopal Health Foundation, a rural hospital's departure can badly damage a rural area's economy. Rural hospitals often are a region's largest employer, and closing down a hospital can eliminate anywhere from 75 to 150 high-wage jobs.

Any hospital closure causes economic ripples for years because businesses shy away from towns without hospitals ― and so do physicians, Dr. Dickey says. 

"In a recent closure [in Texas], a surgeon left approximately the same day the facility closed," she said. "And another physician was out looking for other opportunities, saying, 'I'd love to stay and take care of my patients, but the reality is that what I do is tied to the capacity to have an in-patient facility.'"

The physicians who do stay often are left with poor choices when it comes to helping their patients. Priscilla Metcalf, MD, an ophthalmologist in Wharton, says the hospital closure was an inconvenience for her personally. Instead of doing eye surgeries in Wharton, she now has to travel to Matagorda Regional Medical Center in Bay City, about 40 minutes away.

But many of her patients are elderly and low-income, so making that drive can be an ordeal, given their vision and other health problems.

"It's tougher to get families to take off [to drive patients to their surgeries]," she said. "And the one complaint I hear from my patients is that if there is an emergency, there's no easy place to get to."

What to Do?

The ARCHI report lists several suggestions for physicians and communities looking for alternatives after a hospital closes. The first on its list is working to establish a stand-alone emergency department. Communities need to be realistic about their needs, and local physicians can help others understand what those needs are, Dr. Dickey says.

"If [your town] happens to be near a major road system and you have a lot of accidents, or if you're a big farming community and you have a moderate amount of trauma coming out of farm machinery, you may need a much more sophisticated emergency department that is prepared to stabilize and maintain a patient while you're in the process of trying to find transportation," she said. 

The ARCHI report also encourages local physicians to make greater use of telemedicine. With TMA's backing, the Texas Legislature this year passed Senate Bill 1107, which updated and clarified the rules concerning telemedicine. (See "Clearer and Simpler," August 2017 Texas Medicine, pages 38–39.)

The University of Texas and Texas Tech University already have sophisticated telemedicine systems in place to serve the state's prison populations, Dr. Dickey says. But she says most other physicians naturally have questions, like how to bill for telemedicine calls and how to fit them in an already packed work day. Most individual practices still are trying to get acquainted with the regulations and the technology, she says. (See "Telemedicine in Texas.")

"With the new legislation that just passed, I think everyone is eager to see if that won’t open some doors that may offer some alternatives to towns that haven't always been there," she said.

Many physicians also are understandably reluctant to prescribe without seeing a patient face-to-face, Dr. Dickey says. But most of the technical problems with using telemedicine already have been ironed out, she says. It's just that most physicians still are not familiar with telemedicine or don’t yet have the infrastructure to use it.

"There's a whole plethora of instruments that lend themselves to doing pretty much a full exam at a distance," she said. "But I got to tell you that most of us don't have them sitting in our offices."

The ARCHI report also suggested that rural physicians and clinics rely more on community health workers as well as mid-level practitioners like nurse practitioners and physician assistants. She says community health workers, who are certified but not highly trained, can be used primarily to fill gaps in care, like creating transportation alternatives for elderly or disabled patients.

Dr. Dickey pointed out that mid-level practitioners in Texas must work under the supervision of a physician in writing prescriptions. That can present problems in many far-flung areas, especially the 35 Texas counties that have no physician. However, in 2013, the Texas Legislature ― with the support of TMA, the Texas Academy of Family Physicians, and groups representing mid-level practitioners ― removed the site-based restrictions on the delegation of prescribing authority, particularly the former requirement that limited delegation of prescribing privileges to 75 miles or less.

"We are producing [nurse practitioners] and [physician assistants] much faster than we were five or 10 years ago, and I think they will be part of the solution," Dr. Dickey said. "But again, they come as part of a collaborative practice, so you still have to have the other pieces of the team."

Many Texas physicians have found their own ways to cope with the loss of a rural hospital. Dr. Dimmick, the retired Wharton physician, says his clinic set up "convenient care" hours from 7 am to 9 am each weekday. During that time, any patient could walk in without an appointment. 

"We were even doing that before [the hospital closed], but I think it's become even more important because patients can be seen the same day," he said. "I think that helps somewhat with the fact that we don't have an emergency room."

During its long financial decline, the Wharton hospital reinvented itself many times in an effort to stave off closure. In its last incarnation, it converted to a stand-alone emergency department. That didn’t work at the time, but Dr. Dimmick says that path remains the best hope for reviving the Wharton facility. The good news, he says, is that a new buyer is interested in reestablishing a stand-alone emergency department. Local physicians still would have to work around the lack of a full-fledged hospital, but at least they would have more options for patient care.

"It would be a small piece of what we used to have," he said. "But it would be progress to have that."

Sean Price can be reached by phone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email


How Do You Define "Rural"?

How many rural hospitals are there in Texas? Legally speaking, the term "rural" is surprisingly slippery. In 2014, the Texas Legislative Council identified 48 separate definitions of "rural" in Texas laws and codes. Various federal agencies also have their own definitions. That makes it hard to identify exactly how many rural hospitals exist nationally or statewide. 

According to the Texas Organization of Rural and Community Hospitals (TORCH), Medicaid defines a "rural hospital" as:

Hospital with a Critical Access Hospital (CAH), Sole Community Hospital (SCH), Rural Referral Center (RRC) designation from Medicare, or any other hospital in a county of 60,000 and less (according to the 2010 census) 

Meanwhile, Medicare defines it this way:

Hospital in a non-Metropolitan Statistical Area or in a rural census tract of a MSA, a hospital designated by state law or regulation as rural, or an urban hospital that would meet all requirements of a RRC or a SCH if it was located in a rural area.

TORCH says under Medicaid's definition, Texas has 159 rural hospitals, and by Medicare's definition, there are 153. All told, 163 Texas hospitals meet one or the other standard ― or both.  


Telemedicine in Texas

Telemedicine is expected to play a much bigger role in rural practices in the future. TMA has numerous resources to help physicians understand the issues, legalities, and technology involved. Check them out.

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Last Updated On

September 26, 2018

Originally Published On

October 13, 2017

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Hospitals | Rural Health Care

Sean Price


(512) 370-1392

Sean Price is a reporter for Texas Medicine and Texas Medicine Today. He grew up in Fort Worth and graduated from the University of Texas at Austin. He's worked as an award-winning writer and editor for a variety of national magazine, book, and website publishers in New York and Washington. He's also helped produce Texas-based marketing campaigns designed to promote public health. Sean lives in Austin and enjoys hiking, photography, and spending time with his wife and two sons.

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