'They're so vulnerable': Fiscal problems driving rural New Mexico hospitals to brink

Jan. 26—Even after a decade on the job, Dr. Jessica Roberts still has a hard time wrapping her mind around how far some patients drive to see her.

The only OB-GYN on staff at Miners Colfax Medical Center in Raton, Roberts said she sees women from across a wide swath of northeastern New Mexico — and plenty of people just passing through on Interstate 25. The closest other obstetric care options are Pueblo, Colo., to the north, Santa Fe to the south, and Dalhart, Texas, to the east.

"The girls that are in Clayton, they drive 85 miles one way to see me for a prenatal visit," Roberts said. "If I were in Philadelphia, where I'm from and where I trained, that would never happen. ... Oh my gosh, you would hear it all over the headlines."

While Roberts is the only obstetrician for miles around, her four-bed unit at the state-owned hospital could be at risk — along with other services — because of funding, said CEO Bo Beames. It wouldn't be the first drastic cut the hospital has made. Last year, the facility shut down its intensive care unit, which Beames said shows what many small, rural hospitals are facing in New Mexico.

"All of our small hospitals are in a very financially tenuous situation," Beames said. "We're all being challenged due to a number of factors to break even or make a margin. It's a constant struggle for all of us."

Those factors include inflation, insurance availability, changes in Medicaid funding and workforce problems, according to Stephen Stoddard, executive director of the New Mexico Rural Hospital Network.

Lawmakers are considering several measures to help shore up rural hospitals around the state, including one bill that would give $51 million in emergency funding this year to facilities with fewer than 35 beds.

"[Rural hospital leaders] feel like they're so vulnerable; they're in such a tight spot," Stoddard said. "A lot of them are barely making payroll or just getting by and have had to do extraordinary things or close services ... just to survive."

Roberts said if her obstetrics service were to shut down, the impact on her patients would be massive. Some of them would have to drive up to four hours away to Santa Fe or Albuquerque to give birth.

"How are they capable of that? I mean, if you're in labor?" Roberts said. "People are going to be delivering on the side of the road."

Some challenges aren't unique to small rural hospitals. Inflation driving up the costs of supplies, medication and salaries, and issues with recruiting and retaining staff are problems everywhere since the start of the pandemic. A majority of hospitals in the country, and 64% in New Mexico, had operating losses in 2022, Stoddard said.

Other challenges are more specific.

Stoddard said many companies that offer hospitals insurance are no longer doing business in New Mexico after a 2021 state law raised the payout cap in malpractice suits.

Tammie Chavez, CEO of Union County General Hospital, said in the past, she paid about $180,000 per year for general and professional liability insurance at her hospital, which employs about 105 people.

In late 2022, Chavez said, she shopped around with 44 insurers to find a company willing to write a policy, which in 2023 went up to $487,000 per year. In June, the insurer informed Chavez it would no longer be writing policies in New Mexico. She had to find a new policy by the end of the year. In September, Chavez said, she went shopping again, this time checking with another 35 or more insurers.

"I could only find two companies [willing to write a policy], and this was on the doorstep of having to find something or shut the doors of the hospital," she said. "One company was for $800,000, and the other company was for $1.8 million."

For a 25-bed hospital with a $14 million budget, it was a hit. And the eye-popping numbers were all the more surprising, Chavez said, because the hospital is shielded from some liability by being county-owned and because the hospital had no claims against it last year.

"I don't even know how I'm going to pay for the $800,000," Chavez said.

Chavez and Beames both said their facilities have also been affected by changes in supplemental Medicaid payments, which for many years have been distributed to help hospitals cover the costs of treating low-income patients since Medicaid services are reimbursed at such low rates.

"The original plan was ... to make sure that the smallest, more vulnerable rural hospitals received [a] larger portion of those funds because they realized they're low-volume facilities. They can't cover their costs just by seeing more patients," Stoddard said.

Most recently, a federal change resulted in the program moving funds away from low-volume hospitals in rural areas to hospitals with more Medicaid fee-for-service patients, Stoddard said.

"It really hurt the smallest hospitals," Stoddard said. "Most of them that were used to receiving a few million dollars from this program are now receiving just a few hundred thousand dollars or less."

Some hospitals have already taken steps to curb spending and try to shore up their core services.

Alta Vista Regional Hospital in Las Vegas, N.M., closed its labor and delivery unit in 2022 and its intensive care unit last year. Roosevelt General Hospital in Portales reduced staff hours last year, Stoddard said. Rehoboth McKinley Christian Health Care Services in Gallup converted to a critical access hospital, a federal designation that was expected to improve the hospital's financial situation.

Chavez said she hasn't laid off staff, but she has allowed some positions at the Union County hospital to disappear through attrition. She also shut down some departments, including the hospital's home health service.

Some rural hospitals, Stoddard said, fear they may have to close their doors altogether.

"If a service closes like that, it's a loss for the community," Stoddard said. "It's an even bigger loss if an entire hospital closes down."

As well as the impact on patients, closure of any rural hospital in New Mexico is a major economic blow. That's true in Union County, a ranching community that's also home to a state prison, Chavez said.

"I'm the largest employer in the community," she said. "You can imagine what the loss of the hospital would do. I really think it would shut the whole community down."

However, health care leaders say they're hopeful for some relief out of this year's legislative session.

The emergency funding provided in Senate Bill 52 would offer a few million dollars this year for each of about a dozen small rural hospitals. Senate Bill 161 would fund a temporary $50 million subsidy program for small hospitals to help cover some losses, including increasing medical malpractice premiums. Sen. Pat Woods, R-Broadview, a co-sponsor of both those measures, has also proposed changes to the medical malpractice law. Stoddard said he hopes other measures will be forthcoming to provide a longer-term solution to keep rural hospitals solvent.

Other, more systemic changes, may be possibilities for some facilities. Guadalupe County Hospital recently became the first "rural emergency hospital" in the state — a designation that gives it an ongoing base payment from the federal government to keep it operational but that limits the kinds of services it can provide.

Right now, Beames and Chavez said they're focused on keeping the doors open.

Roberts, the OB-GYN in Raton, said her office hours are booked about four months in advance. She sees women going through menopause, coming for annual check-ups, needing breast exams or hysterectomies, or experiencing pelvic pain or menstrual problems. She delivers about 10 babies per month.

"I think our small little hospital serves a major purpose, even though we're not too busy," Roberts said. "We capture these people who are in this humongous, vast area with no care."