Texas hospitals feeling the long-term financial strains of Harvey

Texas hospitals canceled surgeries, evacuated patients, and closed for days because of Hurricane Harvey. They sank millions of dollars into not caring for patients as a measure of precaution.

More than a month after Harvey made landfall, administrators at the roughly two dozen hospitals that evacuated in the eastern part of the state have now reopened their doors to patients. But some may feel the financial burdens of the storm for months to come — both caring for more patients who can’t afford treatment, while also seeing patients postpone the more lucrative elective surgeries that are many hospitals’ moneymakers.

Vivian Ho, a health economist with Rice University, expects both of these financial forces to likely strain hospital budgets as the region recovers from the deadly storm.

She said there’s an assumption that storms like Harvey “are not damaging long-term for hospitals” — that once a hospital opens its doors, it’s back in business. Rather, Ho said, “my gut says the storm, and the aftermath, will be a road bump on top of other larger problems hospitals face like not having Medicaid expansion in Texas and [the potential loss of] DSH payments.”

These sorts of financial strains on hospitals, often overlooked in the aftermath of natural disasters, have only been studied in a limited capacity. In a 2013 report produced by Harvard University’s School of Public Health and the Massachusetts Department of Public Health, researchers said hospitals should “prepare to deal with uncompensated care following a disaster.” Elizabeth Weeks Leonard, law professor at the University of Georgia, wrote after Hurricane Katrina hit New Orleans that hospitals “may be unable to sustain” prolonged increases in higher uncompensated care while facing other delayed payments.

Ho expects that a growing number of low-income residents will forego paying health insurance to pay for home repairs in a region where many people lacked flood insurance. If that happens, safety net hospitals, like Houston’s Ben Taub Hospital — whose missions are to care for indigent patients — would have to provide more uncompensated care for residents. She said demand for indigent care may rise even further given the fact that Harvey has exacerbated a series of health conditions, including respiratory illnesses and skin infections.

A spokesperson for Ben Taub Hospital did not respond to STAT’s requests for comment seeking figures related its uncompensated care costs.

In the weeks after Harvey, patients have trickled back into Baptist Hospitals of Southeast Texas, but not all of the ones previously scheduled for outpatient procedures. Mary Poole, director of public affairs and marketing, told STAT that disruption to procedures has subjected the hospital located in Beaumont, Texas, to further uncertainty on top of the more than the $2 million hit it took from transferring patients, lost revenue from closures, and other expenses related to Harvey.

“People here lost their cars; their homes had [filled up with] 6 or 7 feet of water,” Poole said. “Anything that’s not life-threatening is put on the back burner. If you were scheduled for a hip replacement or bone scan, you’re not paying for that now.”

In the city of Victoria, about 125 miles southwest of Houston, DeTar Healthcare System CEO William R. Blanchard said his hospitals postponed some of their elective procedures ahead of the storm. He suspects that people either “might’ve not arrived back in the community yet” or might have “had those same procedures elsewhere while they were evacuated.”

Though it’s too early to assess Harvey’s full impact, Blanchard senses that “a lot” of those procedures have not been rescheduled. He isn’t sure how long it’ll take for life inside his hospital walls to return to normal.

“I think there’s PTSD going on where they’re saying, ‘I don’t want to add another stress to my life in having my hernia repair,'” he said.