This article was produced in partnership with The Frontier, which is a member of the ProPublica Local Reporting Network.
Eight nurses at the lone hospital in the rural Oklahoma town of Stigler now double as the cleaning crew. They stabilize patients with life-threatening conditions, mop floors and scrub toilets.
The nurses, along with an office manager and a part-time maintenance worker, are the only remaining employees at the Haskell County Community Hospital, which two years ago had a staff of 68 and provided some of the highest-paying jobs in the southeastern Oklahoma town.
Andrea Randall, a nurse who also serves as the hospital’s interim administrator, has watched it claw through years of financial turmoil in the decade since she started working. None, she said, have been as difficult as the past two years.
And now, the novel coronavirus is threatening to scuttle a sale that would help the bankrupt hospital escape closure.
Before the Haskell County hospital entered bankruptcy in 2019, many employees went weeks without pay. In October, about 85% of the staff was laid off to save money and entice buyers at a bankruptcy auction.
For the past several months, the hospital’s remaining employees have performed housekeeping duties and avoided taking time off when they’ve been sick. The facility barely has enough employees to comply with state and federal laws, which require the emergency room to be staffed with at least two nurses and an on-call physician.
“We know we can’t do this forever,” Randall said in an interview. She’s been praying for a new owner to take over and “help bring us back to life.”
But the future of the 25-bed hospital, which has been whittled down to operating only an emergency room during the bankruptcy, is increasingly grim.
In January, Haskell Regional Hospital Inc., a company controlled by a spine surgeon from Indiana, submitted the sole bid of $200,000 at a bankruptcy auction to purchase the hospital. The sale was to be finalized in March.
William Janvier, an attorney for the company, told a bankruptcy court at a March hearing that the coronavirus’ damage to the economy upended the proposed investment. The company had enough money to buy the hospital but couldn’t afford to operate it, Janvier said.
“Our expected source of operating capital has obviously gotten very concerned because of the events that have been going on,” Janvier said. He asked for more time to gather the needed money. “We are very hopeful that we will be able to close on the deal, but we’re not there yet.”
Hospital closures in the nearby towns of Eufaula and Wilburton in the past four years have made access to health care more urgent in Stigler, a community of about 2,700 people. The closest hospital is now an hour away, a distance that could be life-threatening for residents experiencing a stroke or a heart attack.
The Haskell hospital is one of many Oklahoma rural medical centers trying to remain open under financial conditions that can feel insurmountable and suffocating for the communities trying to save them.
Nearly 130 rural hospitals have closed across the country in the past decade while contending with razor-thin margins caused by a declining and aging patient pool, a greater dependence on lower reimbursement rates from the federal government and higher numbers of uninsured patients. Last year, rural hospitals suffered their largest blow with 19 closures, according to data from the Cecil G. Sheps Center for Health Services Research.
Nine rural hospitals have already shut their doors in 2020. The Maine-based Chartis Center for Rural Health released a study in February identifying about 450 rural hospitals that are vulnerable to closures. The coronavirus threatens to speed up those closures, said Michael Topchik, a national leader for the company.
In Oklahoma, rural hospitals are navigating the higher costs of treating COVID-19 cases while suffering a loss of revenue after being forced to halt elective medical procedures. More than 60% of the 2,894 COVID-19 cases in the state and 70% of the 170 deaths come from communities outside of Oklahoma City and Tulsa.
“We’ve essentially shut our business down,” said Jay Johnson, chairman of the Oklahoma Hospital Association. “The only way we’re all surviving is on whatever cash we had.”
The Haskell County hospital had already reduced medical services, including elective procedures, by the time the coronavirus began reaching rural communities across the country. Nurses perform some laboratory tests and stabilize patients before transferring them to better-equipped facilities about 50 miles away.
But the number of patients still declined. Before the coronavirus pandemic, the Haskell County emergency room treated three to four patients daily. That number has dwindled to two or three patients a day in the past month.
Some days the hospital has no patients at all.
Waiting on the Promise of a Sale
By the time the Haskell County hospital entered bankruptcy in 2019, it was about $6 million in debt. It operated at a loss of more than $193,000 that year. The hospital still owes money to the employees who worked up to six weeks without pay to keep it open.
“I was so angry and I was so bitter over all of it,” Darla Barger, a former human resources manager, said in an interview with The Frontier and ProPublica. “I finally just had to let it go for my own mental health.”
The Haskell County hospital is one of 18 facilities owned or connected with EmpowerHMS, a private management company, that entered bankruptcy or closed in the past five years. Many of the hospitals experienced financial problems after insurance companies flagged ballooning laboratory costs as fraud. The U.S. Department of Justice is investigating the company, which allegedly took advantage of higher reimbursement rates designated for rural communities by billing for blood and urine tests that the hospitals did not perform.
Representatives for the now-defunct company could not be reached for comment. In court filings, the company denied wrongdoing, saying it followed federal guidelines.
Three of the former EmpowerHMS hospitals that sold at auction are still waiting for buyers to finalize the deals. Several companies received extensions after failing to come up with the money.
The company purchasing the Haskell hospital is the only one that pointed to the coronavirus as the reason for the delay.
Thomas Waldrep, the trustee overseeing the Haskell sale, said in court documents on April 8 that the buyer was waiting to secure federal stimulus money to help finance the purchase.
Waldrep said in an email that he didn’t know what type of stimulus funding the Haskell buyer was seeking.
Oklahoma hospitals this month received nearly $500 million as part of a $30 billion federal rescue package to help health care providers with the loss of revenue from the coronavirus pandemic.
This month, Waldrep said he expected the sale of the Haskell hospital to be completed by the end of the month.
But as of Tuesday, Waldrep, who would only answer questions via email, could not provide a specific date of sale. If the deal fails, Waldrep would have to find a new buyer or close the hospital and use any remaining money and assets to pay off debts.
Brent King, a bankruptcy trustee who in 2019 oversaw the successful sale of another former EmpowerHMS hospital in Hillsboro, Kansas, said it’s a challenge to find buyers even without the threat of an ongoing global pandemic.
Eight rural hospitals, previously operated by EmpowerHMS, have already closed. King says he expects more will soon suffer the same fate.
“We can only be hopeful that those hospitals can stay open but, bottom line, I suspect some of them won’t,” King said.
“I Have to Believe That We Have a Future Here”
A sale doesn’t guarantee financial stability for the Haskell County hospital, which will need an infusion of money to reopen parts of the facility and hire additional employees.
But it would provide some sense of stability for its remaining employees.
“I have to believe that we have a future here and we have to just keep moving as if it’s going to happen,” Randall said.
Barry Smith, CEO of Cohesive Healthcare Management and Consulting, which has been running the Haskell hospital during the bankruptcy, said revenue from the emergency room is not enough to sustain operations.
The temporary fix that came in October 2019 was meant only to save money and meet the minimum state and federal requirements to remain open while a sale was completed, Smith said.
If the hospital closed during the bankruptcy, it would lose its critical access status, a federal designation that qualifies remote communities like Haskell County to receive higher Medicare payments than many other facilities. The hospital could also struggle to reopen under current building code requirements.
“Every day that they don’t come in makes it harder,” Smith said.
Smith initially said that if a sale of the hospital wasn’t finalized by mid-April, financial losses would force the company to walk away. He later reversed course, saying the company understood the uncertainty caused by the coronavirus and would not place deadlines on its commitment to the hospital.
Court documents filed in March say Cohesive is owed $3.3 million for 2019, about half of which is management fees. The remaining amount owed is for other expenses paid by the company, including payroll and health benefits for employees.
“We can maintain the status quo for a while,” Smith said in a text. “Hopefully, much sooner than later, a long-term solution is found for the hospital.”
For Randall, maintaining the status quo means wrestling with the possibility of closure while juggling duties that include cleaning out the ice machine, planning for an influx of patients with COVID-19 and contending with new costs, including fixing the hospital’s leaky roof.
But Randall said she’ll keep working, as she did when the hospital stopped paying her salary and when nearly all of the staff was laid off.
“If you don’t show up for work, people are going to die,” Randall said.
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