Managing Myths: The Facts About Texas Hospitals


An unfortunate reality in today’s world of fast-spreading information is, well, misinformation. With the internet and social media affording a potentially unvetted voice to just about everyone, misinformation is – ironically enough – a fact of life.

While it can’t be stopped, it can be refuted. And these days, hospitals need the truth out there as much as any industry does. They are sites of life-saving care, and it’s unfortunate that they have been a target of incorrect rhetoric as we emerge from the COVID-19 pandemic.

That’s why the Texas Hospital Association strives to debunk more than a dozen of the most current misconceptions about hospitals in its new white paper, The Facts: Texas Hospitals Work to Stabilize Amid Harmful Mistruths. With the Texas Legislature debating new pieces of hospital-related policy that could determine the course of our state’s health care for decades, THA released The Facts to keep those mistruths from taking Texas down the wrong path.

The Facts takes 15 fictions we at THA, and our member hospitals, have heard time and again, and beats them back with the truth. Here are just a few examples:

The Facts: Texas Hospitals Work to Stabilize Amid Harmful Mistruths

You might’ve heard over the past year or two that, as a result of relief payments the federal government handed out to account for COVID-19, hospital profits have soared during the pandemic. That’s unequivocally false, as COVID-19 relief to hospitals halted in late 2021 – while inflationary costs kept on rising. As a result, according to a recent study by Kaufman Hall, 48% of Texas hospitals operated in the red in 2022, and nearly one in 10 is at risk of closure.

Other common fallacies on hospital financial matters are similarly damaging. Some believe that supplemental payments Texas hospitals receive through the federal Medicaid 1115 Transformation Waiver make hospitals whole on Medicaid and uncompensated care. Again, absolutely not, as The Facts explains: Medicaid underpayments create a $2.7 billion annual shortfall for Texas hospitals, and uncompensated care creates an additional shortfall of more than $5 billion.

Perhaps even more staggering, there’s a misconception that hospitals dominate contract negotiations with health plans and drive-up health care costs. In fact, private health insurers have significant negotiation advantages, driven by the troubling fact that three of those insurers control 84% of the market. Meanwhile, hospitals are forced to work overtime on the unfortunate bureaucratic necessity of combating health plans’ slow-payment practices, such as prior authorizations.

Untruths like these are crucial to correct because of their potential to cloud important discussions, prevent good policy and encourage detrimental legislation. During this session of the Texas Legislature – which, with bill-filing now closed, has entered a rubber-meets-road phase – it’s crucial that lawmakers understand where hospitals are coming from and how much help they need on several fronts. For instance, misconceptions about the state of hospital finances, like the ones above, could lead to substandard financial commitments by the Legislature in 2024-25.

Fortunately, the initial budget proposals both the House and Senate put forth largely demonstrated an understanding of the funding hospitals need for Medicaid, workforce, behavioral health and more. But a lot of work remains to make sure those funding proposals become reality, and to drive other legislative advancements patients and hospitals need between now and when the Legislature adjourns.

Truth serves as both a powerful weapon and a fortified barrier against harmful backslides. The Facts white paper is THA’s latest delivery system for that truth. Only facts – not mistruths – will strengthen the state of Texas health care.

Originally published by the Houston Medical Journal.
March 20, 2023