AUSTIN (Dec. 1, 2022) – Nearly one out of every 10 Texas hospitals is at serious risk of closure, and nearly half of all Texas hospitals are facing negative operating margins this year, according to a new report released today from Kaufman Hall.
“Extreme pressure on life-saving hospitals creates risk for patients and the state’s overall health,” said John Hawkins, President/CEO of the Texas Hospital Association. “Hospitals are critical infrastructure for communities and serve as a backbone for health, safety, jobs and stability.”
The new report, available here through THA, offers critical data on hospital financial instability and closure risks that could severely impact patient care and access to health care in Texas. The report underscores the pandemic’s dramatic toll on hospitals as they face mounting strain from respiratory illness surges, workforce shortages and rising costs.
As Texas hospitals work to stabilize from the pandemic, health leaders are wary of a potential “tripledemic” on the horizon – with mounting pressures from influenza, respiratory syncytial virus (RSV) and COVID-19 cases. This week, Texas pediatric hospital beds are currently 91% occupied, according to data from the U.S. Department of Health and Human Services. Meanwhile, hospitals face skyrocketing expenses, workforce shortages and millions in losses.
Key findings from the Kaufman Hall report include the following:
- Nearly one out of every 10 Texas hospitals is at risk of closure, twice as many as before the pandemic.
- Nearly half of all Texas hospitals in 2022 had negative operating margins, up from one-third in 2019.
- Texas hospital expenses are up 20% over pre-pandemic levels, primarily due to labor, supply and drug cost increases.
- Texas hospitals have incurred serious losses relative to pre-pandemic levels – including approximately $3.2 billion in 2022 to date – with no further relief in sight. This represents a 30% reduction in total income across Texas.
According to the Kaufman Hall report, prepared at the request of THA, the findings “underscore the existential financial and operational threats Texas hospitals continue to face two and a half years after the beginning of the pandemic.”
Millions of people turned to Texas hospitals during the pandemic for treatment, vaccination and testing. As state and federal relief has wound down, hospital financial losses are mounting, with no further relief in sight. Costs are soaring due to inflation and limited supplies, and the state’s health care workforce has been decimated due to COVID-19 burnout, fatigue, retirements and career changes.
The Texas Hospital Association is calling for state and federal support to help ensure hospitals stay open and continue to be vibrant contributors to local communities. Texas hospitals are asking for assistance in the areas of financial stability, workforce growth to fill critical open jobs, public health resources, behavioral health resources and greater access to care and health care coverage. At the federal level, hospitals are pushing Congress for solutions to prevent harmful Medicare cuts and a Statutory PAYGO sequester from taking effect. THA’s legislative priorities are available here.
Key Resources for Reporters
New Kaufman Hall Report: The Financial Impact of COVID-19 on Texas Hospitals
New THA Report: COVID-19’s Critical Impact on Texas Hospitals
2023 Priorities: Texas Hospitals’ 2023 State Policy Priorities
Founded in 1930, the Texas Hospital Association is the leadership organization and principal advocate for the state’s hospitals and health care systems. Based in Austin, THA enhances its members’ abilities to improve accessibility, quality and cost-effectiveness of health care for all Texans. One of the largest hospital associations in the country, THA represents 452 of the state’s non-federal general and specialty hospitals and health care systems, which employ some 400,000 health care professionals statewide. Learn more about THA at www.tha.org or follow THA on Twitter at http://twitter.com/texashospitals.