Boards from Stamford Hospital District, Haskell Hospital District, and Stonewall Hospital District gathered at the Haskell Memorial Hospital Educational Building on Thursday, February 3rd at 6:00pm. Fran McCown, the Haskell Hospital CEO, opened the meeting stressing that this meeting is the result of two years of planning and input and advice from almost three dozen healthcare leaders.
Stamford CEO Rick DeFoore provided the opening remarks for the presentation saying that the current rural hospital as the foundation of local healthcare was an excellent model when Medicare was created in the 1965, but now it has become the horse and buggy of healthcare. He went on to state that it is getting harder and harder to have enough hospital inpatients to keep any rural hospital afloat, which is the lifeblood of the rural hospital. He also said that in his 35 years in healthcare he had seen the closure of 3 other rural hospitals in Cisco, Baird, and Albany, and all were due to their proximity to other hospitals. He outlined that 80 U.S. rural hospitals have closed since 2010, 13 of them were in Texas. He said that discussions between these three hospitals started in early 2015, with talks of a possibility to move towards a collaborative solution.
Doug Hawthorne, the former CEO of Texas Health Resources and member of the LRC Advisors consulting group, next came to talk. He stressed that tonight was ACT 1 of a play of new beginnings for this region as far as Healthcare and that the board members that were present were the players. He stressed that the timing was important, because none of the hospitals involved were failing; they were all in equal places as far as income and struggles. “The time to act,” he said, “is when the hospital is strong and has the flexibility to make needed changes.”
Dave Ashworth, also with LRC Advisors, spoke next stating that all of the hospitals agreed that a “last man standing approach” was not the right approach to the situations. Dave quoted a Texas Organization of Rural and Community Hospitals study that stated if rural hospitals in Texas “cut all of our salaries to zero and everyone worked for free, they would still be operating at a deficit.” He said that according to recent data, 70% of Medicare patients receiving inpatient healthcare from this area were getting that care from another hospital outside of this service area.
He suggested to the board members that a joint operating agreement could serve as a platform for collaboration between the hospital districts involved. This agreement would not require the transfer of title between the districts and that each hospital district would retain their own separate hospital board, hospital license and designations. The debt, if any, of each district would remain with that district as would the control of the tax rate and use of tax dollars.
Numerous governance issues and options were discussed including the size and composition of the TMHN Board. One option that was described included a new board to be created under the name Texas Midwest Healthcare Network that would consist of 9 members. Two board members from each hospital board and one board member from each community at large. TMHN’s CEO hired by the TMHN Board and TMHN’s Medical Director would oversee the Network operations.
Josh Weaver, a lawyer with Weaver, Johnstone & Nelson, outlined key legal aspects of the proposed arrangements stating that Texas law appears to support the formation and operation of TMHN. After the presentation, the suggestion was made that each hospital board take the issue back to their individual board meetings in February to further study the possibility of this collaboration agreement.
Stamford Hospital District will have their next board meeting on February 21, at 8:00am in the Faye Kelly Board Room.