Texas County has to raise taxes to pay off hospital debt; future still unclear

Oklahoma City — No matter what, residents of Texas County will be paying more in taxes to retire their hospital's old debts. And that doesn't guarantee they can keep it open.

The hospital could have as much as $3 million in outstanding debt to equipment vendors and staffing companies, and the CEO of a company operating the hospital said he had little clue to its financial condition when he took control, according to Texas County District Attorney Mike Boring.

The county has owned the hospital building since the 1950s, but it isn't clear how much debt the hospital racked up under various management companies since 2012. The debt is still a public responsibility, Boring said. Texas County still owns the building and is responsible for repairs, which could run into the millions, given the leaky roof and malfunctioning air conditioning, he said.

There's no way the county can cover the old bills and repairs without raising sales or property taxes, Boring said.

“The county's gone through its money and we're facing a dilemma,” he said.

The 47-bed critical access facility in the Oklahoma Panhandle is just one of many rural hospitals that have been struggling to stay afloat, despite years of subsidies from local taxpayers.

Many of the rural hospitals have struggled with declining reimbursements from Medicare, the state's decision not to expand Medicaid, shrinking populations and people's increased willingness to travel to larger urban centers for care.

Memorial Hospital of Texas County has at least a couple of challenges that most other hospitals don't: No one seems to be sure how much it owes to its creditors, or how much it can hope to collect from patients.

Deep cuts

Even increased tax funding won't secure the hospital's future, however. Doing that is largely up to Synergic Resource Partners, a limited-liability company created in August 2017 that came in to manage the hospital two months later and leased it starting in April. Any new bills or revenues belong to SRP.

The company hasn't released financial numbers, though CEO Doug Swim, an Oklahoma City lawyer, said at a public meeting last week that the hospital could be profitable early next year.

Chief Operating Officer Mike Carter said the plan relies on bringing in close to $4 million in new imaging equipment and additional doctors and sharing resources with hospitals in Amarillo, Texas, and Liberal, Kansas.

So far, they have one new physician, with help from a loan-forgiveness program. They also received the coveted “critical access hospital” designation from the Centers for Medicare and Medicaid Services, allowing the hospital to collect higher payments going forward.

Swim estimated they have saved about $400,000 a month by cutting staff by about 20 percent. The hospital officially closed its obstetrics unit at the end of October, which Swim said saved another $720,000, but Southwest Medical Center in Liberal agreed to rent space in the Guymon hospital. Memorial Hospital's two obstetrics providers will keep delivering babies in Guymon under the arrangement, so patients may not see any difference.

Since April, they've been “bootstrapping,” Swim said — operating on a pay-as-you-go system, because banks and vendors aren't in the mood to give the indebted hospital more credit. Utilities and employee salaries come first, so suppliers must wait to get paid.

“I hate that sometimes lab is low (on supplies) and we have to send lab (samples) out to Liberal or whatever, but at least the hospital is open,” he said. “Sometimes we couldn't run tests because we had another bill that was critical.”

Vendors' claims

Failing to pay vendors causes more problems for the hospital, said Jerry Caughman, who co-owns Royal Lab Services. He estimated the hospital owes him and his partners about $36,000 for managing the lab from October 2017 to April and that it owes other lab suppliers more than $100,000. The hospital had to rely on borrowing supplies from Liberal or Amarillo, and even their patience was running thin, he said.

“When you get to that point, vendors don't even want to work with you,” he said. “It had even got tough, while we were there, to find someone willing to let us borrow.”

Other creditors include Emergency Staffing Services, which stopped supplying emergency room doctors and says the hospital owes about $250,000; Rhino Medical Services, which says it's owed nearly $200,000 for anesthesia work; and the Oklahoma Health Care Association, which is seeking about $10,000 in workers' compensation insurance premiums it says the hospital hasn't paid since July 2017.

Even former employees say they aren't getting their final checks. Dr. Kim Young, who parted ways with the hospital after a hitch in getting his Medicaid billing set up, said he's considering filing a complaint with the Oklahoma Department of Labor. It's particularly galling because he assisted with covering the emergency room after Emergency Staffing Services pulled out, he said.

“I stepped up for them when they asked me to, and I didn't expect to be treated like that,” he said.