The Crockett Hospital’s Painful Demise

June 30, 2017 was a sad day for Crockett, Texas, our neighbor just 47 miles to the west. Little River Healthcare ended its management affiliation with the Houston County Hospital District that Friday, effectively shuttering the Crockett hospital. Nearly 200 employees are affected by the closure.

The simple sign taped on the front door said, “HOSPITAL CLOSED” and directed people to either call 911 in an emergency or to go to Palestine Regional Medical Center, the closest hospital 39 miles away.*

Though this seemed like a sudden event, in many ways it was a slow death over many years. The 49-bed Crockett hospital – most recently known as Timberlands Healthcare, under the management of Little River Healthcare since April 18, 2016 – had danced with several management partners over the last several years. Little River Healthcare didn’t even last 15 months. 

Prior to Little River Healthcare, CHC (Community Hospital Corporation) was brought in June 1, 2015 to run the Crockett hospital for an interim period after the hospital’s messy divorce from East Texas Medical Center (ETMC) in Tyler. ETMC ran the hospital for 10 years. ETMC claimed to have invested $27 million in facility and technology upgrades in Crockett, but for a hospital in the 21st century, that was a paltry amount when spread out over 10 years. 

So why didn’t Little River Healthcare succeed?

According to published news reports, Little River Healthcare blamed Blue Cross and Blue Shield for not paying $32 million it was owed; BCBS would not comment. Little River stated that when it took over the Crockett hospital, the hospital had been “cash flow negative for a long time,” but that they thought they could turn it around.

It was a helluva lot to turn around. Payroll alone was $1.5 million per month. To keep the hospital running in its current state would have cost $2.7 million per month. The Houston County Hospital District board had already increased property taxes to the max amount and even borrowed money in an attempt to keep the hospital afloat. 

LRH Co-Owner Ryan Downton was quoted as saying, “We came to the conclusion the patient volume just isn’t there in the town anymore.” The problem was not volume; it was reimbursement. You can double or triple the number of patients you see, but if you don’t get paid adequately, you are just digging a deeper hole.

Crockett is a dying town. According to the Census Bureau, its population is around 6,500 and shrinking. 39% of the population is living in poverty. Only half of those 16 years of age and older are employed. A mere 17.2% of the population 25 years and older has a bachelor’s degree or higher (and 22.4% don’t even have a high school diploma). 27.4% of the population under the age of 65 has no health insurance. In today’s medical climate, no hospital can survive with this demographic. No hospital district can squeeze enough taxes and reimbursement out of an uneducated, poverty-stricken, unemployed, and under- or un-insured demographic to keep a hospital afloat.

What happened in Crockett is, unfortunately, not unusual. At least 15 rural hospitals have closed across Texas over the last several years. Dozens of counties in Texas have just a single physician – or none at all.

I grieve for Crockett. My brother and his wife live there. I have had the privilege of treating many dear patients from Crockett over the years. We share a compassionate state representative, Trent Ashby, whose rural upbringing cannot be far from his mind in a situation like this. Trent has said he is “committed to working with all of the involved stakeholders to mitigate the loss of existing jobs and help move forward with a plan to increase access to healthcare in our area of the state.” I don’t doubt it one bit. But to be honest, there’s not much he can do. CHI St. Luke’s Health Memorial Lufkin leadership was over in Crockett even before the closing to assist some with employment, but even they can’t come close to softening the impact of nearly 200 jobs lost.

Ultimately, this falls far too heavily on the shoulders of the local Houston County Hospital District board to find a solution. They can’t pull money out of thin air or tax property any higher. And they certainly can’t get paid for healthcare when no insurance coverage or safety net exists. I hope the hospital district board can reassess and reallocate resources to focus on providing comprehensive primary care and prevention services to the citizens of Houston County, at a minimum. They also need to strengthen relationships with surrounding regional hospitals to provide higher level of care services where needed. 

Those of us outside Houston County need to open our eyes. Without a much deeper, systemic and national change in how we allocate and pay for healthcare in this country, what just happened in Crockett is going to be replicated in more and more communities around the country. Let’s help Crockett, but don’t think it can’t happen to us.

*Will Johnson, Senior Reporter for the Messenger News in Grapeland, and Caleb Beames with KTRE-TV have done an excellent job reporting on the hospital closure, and I am indebted to them for some of the details and quotes in this column.