Liabilities & Debt “Too Great” to Continue; “Out of Options” Board Chairman Says
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St. Mark’s Hospital to Shut Its Doors -
A St. Mark’s surgery team in happier times.
St. Mark’s Medical Center in La Grange is ceasing all operations and closing its doors, effective 7 a.m., October 12, 2023, announced the hospital’s Governing Board.
The hospital closure results from St. Mark’s ongoing inability to meet its financial obligations.
About 62 employees still worked at St. Mark’s and will lose their jobs.
This week’s announcement was the final straw in what has been a gradual scale back of St. Mark’s services.
In February 2023, St. Mark’s transitioned to a Rural Emergency Hospital (REH) designation that ceased inpatient care, but preserved emergency department services and most outpatient care while additional funding was pursued to offset the $13 million mortgage debt, years of revenue shortfalls, and rapidly escalating expenses.
“Even with the new REH designation, the Board was clear that St. Mark’s needed additional outside financial support to pay the hospital’s mortgage,” said Dudley Piland, St. Mark’s Board Chair. “After several unsuccessful efforts to garner support, Hospital Centers of Excellence (HCOE), a local group of investors, stepped up with a plan that might be able to secure funding to continue healthcare services to the community.”
“The Board commends HCOE for their efforts and determination. Unfortunately, servicing the hospital’s liabilities and mortgage debt was apparently too great. HCOE’s plan and strategy to preserve healthcare services were sound; financing just did not come through,” Piland continued. “St. Mark’s would have faced closure years earlier had it not been for COVID-related funding and an agreement with the hospital’s mortgage lender and HUD to pay less than the full mortgage since February 2020.”
Although Texas Health and Human Services Commission recently granted payments of $187,500 per quarter for six quarters to support Texas rural emergency hospitals and the La Grange Economic Development Corporation pledged $500,000 toward capital improvements, those funds are not sufficient to overcome the mortgage debt payments of approximately $160,000 per month and other ongoing expenses of the hospital.
Piland added, “Closure is certainly not the outcome that anyone wanted for our community, the staff or their families. But without the additional local funding support HCOE was seeking, the hospital is out of options.”
“Ongoing financial struggles in rural health care are prevalent across the U.S., and unfortunately, St. Mark’s has not been able to overcome these challenges,” said Mark Kimball, St. Mark’s President and CEO. “I am proud of all that our team has accomplished in the delivery of award-winning, compassionate care to members of our community. It’s heartbreaking to be in this situation, but there just isn’t a sustainable financial path forward.”
Since January of 2005, some 199 U.S. rural hospitals have closed or changed their delivery model. Texas accounted for 29 closures or a change of delivery model For further information about medical records, patients can refer to smmctx.org, found under Our Services/ Medical Records.
Piland said as “far as he knew” the entities of Austin Heart, the VA Clinic and Tru-Skin Dermatology, which operate in the facility adjacent to the hospital were continuing operations, but advised patients to contact those practices directly with any questions.
