Rising costs and increased closures put pressure on West Texas rural hospitals to do more with less

From KTTZ:

As of December, Texas is home to 154 rural inpatient hospitals, the most of any state in the country.

In the past decade, 14 of Texas’ rural hospitals have closed and another 82 are at risk of closure, according to a recent report from the Center for Healthcare Quality and Payment Reform.

Floyd County has a population of about 5,000 people and one hospital. The W.J. Mangold Memorial Hospital is about 60 miles northeast of Lubbock, in Lockney.

It is a critical access hospital with 25 beds, an emergency room, and many of the services and programs that can be found at a larger, urban hospital.

Mangold Memorial is also an independent system, with a locally elected governing board. According to the hospital’s CEO Vincent DiFranco, that independence makes it easier to make decisions based on community needs.

“What can we do for you as a local resident?” DiFranco posited. “What types of services would you like to see us provide? Are you traveling out of the community for a service and you’d prefer to stay home? Because we can evaluate the feasibility of trying to do that here or recruiting a physician that could provide that service or an advanced practice provider, whatever it might be.”

Like many rural hospitals, the Mangold Memorial Hospital faces challenges based on patient demographics – which tends to skew older and lower-income – staffing, and general expenses.

According to the CHQPR closure risk report, many hospitals rely on local tax revenue or government grants to remain open. With the loss of temporary pandemic assistance, more than a third of U.S. rural hospitals lost money in 2024.

Advantage plans, authorization, and technology

Rural hospitals have the same fixed costs and 24/7 demands for emergency services and staff as their larger counterparts, but fewer patients. Fewer patients means fewer payments. So health insurance plans are not covering the costs.

“It depends on the type of plan and how they pay and what their rates are, what their premiums are, those kinds of things,” DiFranco explained. “I think the insurance companies in general – and they’re not going to like me for saying this – they make their money by not paying for services. They collect a premium and whatever they don’t pay out of that premium for health care services, they keep.”

While rural hospitals get less reimbursement from Medicaid, Medicare, and commercial insurance, hospital administrators and the CHQPR have identified Medicare Advantage as a particularly significant challenge for patients and health providers.

Mangold Memorial had increasing difficulty getting Advantage plans to cover its home health services and DiFranco said that three years ago, it had to discontinue the program. He also said that Advantage plans often do not cover swing bed stays as long as traditional Medicare would, a program that is especially utilized by older patients.

In his experience, DiFranco said Advantage plans create issues with pre-certification, are more restrictive, and do not pay full claims.

“What we found is the commercial insurance companies that run the Medicare Advantage plans – it’s not the government, it’s commercial insurance –they make up their own rules as they go,” he explained.

Lynn County Healthcare System’s CEO Miranda Walz-Allen said that preauthorization has become a heavier burden for the LCH staff as well.

“Every insurance company does that, and that takes more time on our end and more resources. And when you’re in a rural hospital, you have limited resources,” she said. “That costs more money on our end, but we don’t get reimbursed more money, and so it’s one of those cycles that we’re in. How do we limit that? I’m not sure.”

Reporting requirements also come with technological needs, like different softwares, and staff hours to find, collect, and submit data. Failing to do so could get the hospital removed from networks.

Walz-Allen said that while insurance agencies are using AI to deny claims, LCH does not have the resources to automate that process.

Losing and expanding services

LCH not only provides for its own community in Lynn County – through its hospital, clinics, and assisted living facility – but being so close to two major highways, it needs to be prepared for collisions and accidents.

It also partners with nearby health systems to increase the number of patients it can assist.

“We have the infrastructure, we have MRIs, where you can get in same day or next day, and you can get those results really quickly,” Walz-Allen said. “And that’s really what these rural hospitals can do, is to provide overall health care, not just locally, but regionally and to greater areas.”

Rather than going to an Urgent Care Clinic in the city of Lubbock and waiting two or more hours to be seen, Walz-Allen said through LCH’s Fast Track Clinic, folks can drive 20-30 minutes and be called back in 5-15. She said that alleviating congestion from urgent cares in nearby urban areas is a benefit that LCH provides to the broader community.

Along with “Rural Hospitals at Risk of Closing,” CHQPR released another report in December called “Stopping the Loss of Rural Maternity Care.” It shows that 94 of Texas’ rural hospitals do not have labor and delivery services.

Of the 64 still providing labor and delivery, 13 are at risk of elimination.

Both the W.J. Mangold Memorial Hospital and the Lynn County Healthcare System previously offered labor and delivery, but have discontinued those services.

Labor and delivery services at Mangold Memorial were discontinued in 2016, before DiFranco’s tenure began.

He said there was a decrease in the number of patients giving birth at the hospital. Birthing care also has significant staffing and training requirements, anesthesia coverage, and – at the time – low Medicaid reimbursements.

While the closures make sense from a service and financial perspective, DiFranco said they feel like a loss for communities and the loss of one avenue that keeps younger patients utilizing rural health systems.

“I have a physician that works in my clinic that helps share nursery call in Plainview and he’s seeing an increase in the number of pediatric patients patients that come to see him in our clinic because he’s had that exposure that great experience with those families and now they want to continue to use him,” he explained. “So we lose that when we discontinue obstetric services in our own hospitals.”

Over in Terry County, the Brownfield Regional Medical Center expanded its labor and delivery services in 2020.

Kyle Barnett is the CEO of BRMC, a role he took on in early 2026. He said decisions like the expansion of services, comes directly from the needs of the community through health needs assessments done in partnership with city officials and local organizations.

After identifying a need or desire, it is up to the medical center to determine if it is possible with their resources and staffing. Sometimes that means finding new avenues to ensure patient safety, like partnering with a blood bank from a city with a larger population before taking on certain surgeries.

Caring for their communities

Rural hospitals are also often major employers for their areas. DiFranco, Walz-Allen, and Barnett all cite the community aspect of small hospitals as a benefit for both patients and employees.

“When I was interviewing for this, they asked me, like, ‘Hey, what are you hoping to do? Are you going to be here a year or five years?’” Barnett recalled. “And I said, kind of bluntly, just said, ‘Hey, unless you all kick me out, I’ll be here till I retire.’ Brownfield is my home. I’m raising a family here. I have no reason to ever leave.”

Barnett said there is a sense of ownership that comes from serving a small community with a smaller team and from seeing the same patients and learning the best ways to care for them.

Each administrator also said collaboration and community support are the primary ways rural hospitals adapt and expand.

In Lockney, DiFranco meets with vendors to find new ways to innovate. Brownfield Regional Medical Center has a partnership with the local school district to bring high school students into training programs. The Lynn County Healthcare System is hosting a fish fry with the fire department and a silent auction with contributions from local businesses to raise money for new equipment.

According to CHQPR, when it comes to insurance challenges, Congress could implement regulations on Medicare Advantage to ensure adequate payout to rural hospitals, a change which would not raise rates for customers.

Meanwhile, hospital administrators said the best ways for individuals and employers to do their part, is by contacting local hospitals directly when choosing an insurance plan and by utilizing their services.

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