Hope for the Hospital
To The Editor:
Progressive Health of Fayette – That’s the name for the new La Grange hospital that is supposed to open in early 2026. Progressive Health Group ( phghealth.com), a private, for-profit company, which started up in 2019, operates three other rural hospitals (all in Mississippi). Two of those are Rural Emergency Hospitals (out-patient services only). PHG’s CEO Quentin Whitwell told the Record in mid-September that the La Grange hospital would have an emergency room, pharmacy, laboratory, imaging services and a primary care clinic. He also said that up to 75 full-time staff and another 75 part-time workers could eventually be employed and that the St. Mark’s building needed a new roof and air conditioning equipment but little else. (FCR 9-18-25).
The La GrangeArea Chamber of Commerce has posted a public link to PHG’s Community Health NeedsAssessment Survey on its website ( lagrange.org) to give local people input so PHG can “better understand the priorities, challenges, and opportunities in the La Grange area.”
PHG apparently has a good track record with its hospitals in Mississippi. Progressive Health of La Grange will not have the substantial building mortgage debt that St. Mark’s Hospital had and which was a significant factor in its failure and closure two years ago. All that sounds good.
This all comes at a time, however, when rural hospitals still continue to be at high risk of closing in high numbers due to finances. According to the Texas Organization of Rural and Community Hospitals ( torchnet.org), Texas leads the nation in rural hospital closures. Twenty-five rural hospitals in Texas have closed in the last two decades. Citing the Center for Healthcare Quality & Payment Reform, KXAN reported on Oct. 13 that 84 of 156 rural hospitals in Texas are at risk of closing and 21 are at immediate risk. ( KXAN. com 10-13-25).
Private companies, 501(c)(3) non-profits and hospital districts (special local government entities) all operate rural hospitals in Texas. All rural hospitals have to overcome lower health insurance reimbursements, lower patient volume, increased uncompensated care (uninsured patients), and increased operating costs (supplies, equipment and payroll). The 2024 U. S. Census shows Texas has the highest rate of uninsured residents - 13.6% of children and 21.6% of adults, compared to national averages of 6.0% and 11.3%, respectively ( txchildren.org). TheTexasA&M Bush School of Government estimates about 800,000 Texas residents could drop their health insurance under the Affordable Care Act on January 1, 2026 when the federal government premium subsidies expire. ( bush.tamu.edu 9-18-25).
Rural health care facilities have relied heavily on Medicaid reimbursement to cover expenses. Medicaid is the joint state-federal health insurance program that primarily covers low-income people and those with disabilities. In 2023, 40.6% of children and 18.3% of adults under age 65 from rural areas were enrolled in Medicaid. (KFF Health News ( kffhealthnews.org) 10-15-25, citing the Center for Children and Families at Georgetown University).
The “One Big Beautiful Bill,” passed by Congress in July, cut federal Medicaid spending. The cut is expected to reduce Medicaid funds for rural areas by $155 billion over 10 years ($15.5 billion/ year). ( northcarolinahealthnews.org 10-11-25). The Rural Health Transformation Program (RHTP) which was added to the OBBB will provide $50 billion to the 50 states over five years ($10 billion/ year) to help devise methods and programs to help rural hospitals. States are required to submit applications to obtain RHTP funds to the U.S. Department of Health and Human Services (HHS) by Nov. 5.
The $50 billion from the RHTP will be allocated to qualifying states by HHS. Of the total, $25 billion will be divided by all of the states over five years. (Each state gets $500 million. If every dollar went directly to rural hospitals, each rural Texas hospital would get $3.2 million.) The other half ($25 billion) will go to states that show the greatest need. Each state will disburse the funds it gets as it determines appropriate, based on federal requirements.
HHS says that RHTP is intended as a “catalytic investment” to support reforms and innovations that would strengthen rural health care systems beyond the life of the RHTP program. That means that RHTP funds may not go directly to rural hospitals to cover expenses. The federal law itself specifically says RHTP funds cannot be used to offset Medicaid cuts. ( northcarolinahealthnews.org 1011-25).
KFF Health News reported that RHTP “is focused on transforming the rural health care system — not providing continued funding to keep facilities open or making up for lost Medicaid funds.” ( kffhealthnews.org 10-15-2025). KFF estimates that RHTP’s five-year, $50 billion funding is about 1/3 of the expected loss of Medicaid funds in rural areas that will be spread over 10 years and that Medicaid cuts over that period would be at least $137 billion in rural areas.
The Texas Legislature this year passed House Bill 18, called the Rural Health Stabilization and Innovation Act. ( capitol.texas.gov 6-20-25). The Legislature’s bipartisan House Research Organization says HB 18 would “establish or make changes to several offices [state agencies], programs, and services that administer or provide healthcare services to rural counties of the state.”
HB 18 might also make grant money available to rural hospitals for limited purposes and time periods. It would not provide statewide funding for rural hospitals or health care. State Rep. Gary VanDeaver (from East Texas) who wrote HB 18 told the Texas Tribune ( texastribune.org 4-23-25) that over the next two years, HB 18 could cost the State about $49 million for administrative overhead and possibly another $100 million for grants to rural hospitals.
The Texas Office of Rural Hospital Finance and Coordination within the Texas Health and Human Services Commission ( hhs.texas.gov) administers the state grants and gives technical assistance to rural hospitals. In 2023, the Legislature appropriated $50 million to the Texas HHSC for 2024 and 2025 to establish the Rural Hospital Grant Program which required the money to be used for financial stabilization, maternal care operations, and “alternative payment modelreadiness.”
Whether these new federal and state funds and programs will pay off in terms of keeping rural hospitals open over the long term is uncertain. What is certain is that rural residents must urge their local, state and federal elected officials to do everything within reason and in their power to support rural hospitals and the delivery of rural health care. Fayette County is extremely lucky to have another chance for local health care. Any way you cut it, rural hospitals will have a very tough row to hoe.
Russell Friemel Fort Worth & Ellinger