It’s not easy being a hospital in Texas, the state with the unwelcome distinction of having the most hospital closures and highest percentage of uninsured residents.
The economic reality of the Lone Star State puts many Texas hospitals in the difficult position of having to provide more free or discounted care than those in other states. A Modern Healthcare analysis found that Texas hospitals reported on average the third-highest charity-care spending ratios as a percentage of total expenses in 2018, behind Florida and Virginia. Texas’ ratio was 4.5% in 2018, up from 3.3% in 2017. Nationwide, hospitals averaged 2.2% of their expenses on charity care in 2018, according to the analysis of Medicare cost reports.
There are reasons to believe the COVID-19 outbreak sweeping the country will force hospitals to spend even more on charity care, as patients who’ve lost their jobs and health insurance fall ill. That’s a major concern for Texas hospitals—which are already significantly challenged by the state’s 17.7% uninsured rate, said John Hawkins, senior vice president of advocacy and public policy for the Texas Hospital Association.
“When you add that onto a potential medical and economic crisis … it really looks to be a challenging situation going forward,” he said.
Uvalde Memorial Hospital, about 90 miles west of San Antonio, already has one of the highest charity-care ratios in the state. In recent years, the 25-bed critical-access hospital has spent 15% to 17% of its revenue—how it measures charity care—more than triple the state average.
About 23% of Uvalde County residents are considered to be living in poverty, according to 2018 Census estimates. The uninsured rate is 22.5% for people under 65.
Valerie Lopez, Uvalde Memorial’s chief financial officer, said testing and treatment for COVID-19 may push the hospital’s charity-care spending even higher.
“We are having our staff all dressed up” in personal protective equipment, she said. “We are operating in a much larger area from inside to outside, getting supplies and things like that. I think the resources are probably expanded. But it’s yet to tell if the reimbursement will follow with that.”