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Oklahoma Rural Hospitals Face ‘Very Scary Operating Environment’

Mike and Mary Ann Johnson, and her daughter Deanie  Neugebauer, bought this home in Frederick, Oklahoma in the summer of 2015.
Jacob McCleland
Mike and Mary Ann Johnson, and her daughter Deanie Neugebauer, bought this home in Frederick, Oklahoma in the summer of 2015.


Mary Ann Johnson and her husband bought a spacious 1970s-era ranch home in Frederick last summer. The remodeled kitchen is wide and open with a brand-new island juxtaposed by a retro cooking stove.

The couple grew up in Frederick, and they still have lots of friends and family here. It’s quiet and peaceful and they love the slow pace of life after years of living in Oklahoma City. It was an easy decision to buy the house and retire in this small, southwestern Oklahoma town.

But now, Johnson is worried about her daughter, Deanie.

“She’s adult and mentally handicapped and autistic,” Johnson said. “So she requires full-time care.”

The hospital in Frederick closed its emergency room and inpatient hospitalization earlier this month. The closest ER is in Vernon, Texas, nearly 30 miles away.

“My daughter is a seizure patient and would need immediate emergency care if she should go into a grand mal seizure,” Johnson said.

In a press release, the Frederick hospital’s administrator cited the rising cost of healthcare and low patient volume for the closure. Another hospital, in Sayre, closed in February.

Jeff Hackler, section chief for the Oklahoma State University Center for Rural Health, said small-town hospitals have been struggling financially for more than a decade.

“We’re getting into an environment where we are going to see this increasingly often,” Hackler said. “It’s a very scary operating environment for rural hospitals.”

Between 80 and 85 percent of patients at critical access hospitals are on Medicare, and the reimbursement rate fell by 2 percent through sequestration. And now, the Oklahoma Healthcare Authority has proposed reducing the Medicaidreimbursement rate by 25 percent.

“If you’re getting 80 to 85 percent of your patients through Medicare, and you’re losing money on them, you better make up the difference on the remaining population,” Hackler said. “And with the 25 percent percent cuts to Medicaid, that’s probably going to make up at least half of your remaining patient population. So you’re going to be losing money on those as well.”

The hospitals in Sayre and Frederick both shut their doors within a few months of each other. Hackler expects more closures to follow.

“It will be really just impossible for rural hospitals to break even, especially critical access hospitals, they’re going to have to rely on things like a local sales tax to help them move into the black, which makes it very difficult,” Hackler said.

About 15 percent of Oklahomans are uninsured, and that’s a problem for rural hospital administrators like Jahni Tapley, the CEO of McCurtain Memorial Hospital in Idabel. She said her hospital has $4 million per year in bad debts.

“That’s just in bills that patients were unable to pay. That’s before Medicaid cuts. That’s before insurance not paying,” Tapley said.

Tapley wants the state to adopt the Medicaid Rebalancing Act, which would accept federal money to reduce the uninsured rate by about 30 percent through a blend of tax credits, health incentive-based commercial plans, and a $1.50-per-pack tax on cigarettes. It would also restore the Medicaid reimbursement rate to about 86 percent. To Tapley, that’s better than the status quo - she has difficulties just finding providers who accept Medicaid.

“It’s a money loser. So when you go in and cut it any more, you’re just getting to the point where you’ve cut through fat, you’ve cut through bone, you’re cutting muscle now. And there’s nothing left to be able to provide to these people,” Tapley said.

Mary Ann Johnson now has an emergency plan in case her daughter suffers another seizure.

“We’ve decided we’re going to always have gas in the car and we will probably call the ambulance first. An EMT can bring her under control with the ability to IV her and to give her the right medications,” Johnson said.

But, she said, the loss of the town’s ER has definitely given her second thoughts about retiring in her hometown.

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Jacob McCleland spent nine years as a reporter and host at public radio station KRCU in Cape Girardeau, Mo. His stories have appeared on NPR’s Morning Edition and All Things Considered, Here & Now, Harvest Public Media and PRI’s The World. Jacob has reported on floods, disappearing languages, crop duster pilots, anvil shooters, Manuel Noriega, mule jumps and more.
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