Rural hospitals in Oklahoma are failing to keep their doors open
Facing major losses and shutdowns, hospitals in rural Oklahoma are closing rapidly
By Isaac Dennis, Kayla Dunn, Seth Fish and Avery Fulton
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SAYRE, Okla.— A $19 million hospital in rural western Oklahoma is sitting vacant.
Sayre Memorial Hospital has had a history of ups and downs, opens and closes. Its first major close happened in 2003, but it reopened shortly after. The years following brought major renovations, including a new surgical wing that the residents of Sayre would pay for through sales tax. Operations seemed to be running smoothly; however, in late 2015 the city officials learned of the financial reality of the hospital.
SAYRE, Okla.— A $19 million hospital in rural western Oklahoma is sitting vacant.
Sayre Memorial Hospital has had a history of ups and downs, opens and closes. Its first major close happened in 2003, but it reopened shortly after. The years following brought major renovations, including a new surgical wing that the residents of Sayre would pay for through sales tax. Operations seemed to be running smoothly; however, in late 2015 the city officials learned of the financial reality of the hospital.
Eddie Tom Lakey has lived in Sayre his entire life and has been the mayor since 2007. He recalled learning about the future of the hospital and the impact it had on him.
“The board at that time called me and wanted to give myself and our city manager a report on the condition of the hospital,” Lakey said. “We were stunned by the report that it was getting very very close to not being able to sustain itself.”
The numbers looked grim. Sayre Memorial Hospital was hemorrhaging money, and they didn’t have the population base to sustain business. With the forbidding future, board members and faculty began to leave.
“Before the others [board members] resigned they reached out to Mercy hospital,” Lakey said. “Mercy had been in the process of trying to reach out to smaller hospitals in outlying areas, and try and use their size to maintain those little hospitals. They [Mercy] came out and did about a six month on site research of the condition and were excited about it, but when they took their proposal back to Kansas City, they decided they didn’t want to inject the 2 million dollars that was needed to keep it going.”
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On Feb. 1, 2016, Sayre Memorial Hospital closed for the second time, leaving thousands without medical services and 75 people without jobs.
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Eddie Tom Lakey has lived in Sayre his entire life and has been the mayor since 2007. He recalled learning about the future of the hospital and the impact it had on him.
“The board at that time called me and wanted to give myself and our city manager a report on the condition of the hospital,” Lakey said. “We were stunned by the report that it was getting very very close to not being able to sustain itself.”
The numbers looked grim. Sayre Memorial Hospital was hemorrhaging money, and they didn’t have the population base to sustain business. With the forbidding future, board members and faculty began to leave.
“Before the others [board members] resigned they reached out to Mercy hospital,” Lakey said. “Mercy had been in the process of trying to reach out to smaller hospitals in outlying areas, and try and use their size to maintain those little hospitals. They [Mercy] came out and did about a six month on site research of the condition and were excited about it, but when they took their proposal back to Kansas City, they decided they didn’t want to inject the 2 million dollars that was needed to keep it going.”
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On Feb. 1, 2016, Sayre Memorial Hospital closed for the second time, leaving thousands without medical services and 75 people without jobs.
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After the close in 2016, multiple companies attempted to purchase the hospital. Valued at $19 million, the hospital was priced for sale at a third of its value at $6 million. A potential buyer from Chicago planned to purchase the hospital for the $6 million asking price, but instead decided to wait for the market to determine the final price. The buyer ultimately invested in a hospital in Shattuck, Oklahoma.
The bonding company that owned the hospital finally sold it for a mere $2 million to Bob Hicks of company Healthcare Properties Transaction Group of Oklahoma, LLC. Sayer Memorial Hospital then reopened for a short amount of time in 2017 before they were yet again forced to close the doors.
“Bob had trouble getting his medicare number,” Lakey said. “In the meantime, he wasn't able to pay the hospital employees, so he kept borrowing money. He borrowed up to 6 million dollars and finally the bank said that's it.”
If things had gone as planned, the hospital could have remained open.
“The surgery wing would have saved the hospital, except that Hicks couldn't get his medicare number,” Lakey said. “We had some doctors and surgeons that were excited about using that. It just didn't work itself out.”
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The hospital is now sitting vacant again, owned by a bank in nearby Altus. There are currently talks of another potential buyer, but the task of reopening may be to steep a challenge to overcome.
“We are sitting here and the Fraiser bank in Altus has a potential buyer, but I don't know if it will be a full fledged hospital or not,” Lakey said. “We will have to wait and see.”
Even with the hospital inoperational, Sayre is still having to foot the $2 million bill left by the surgical wing added in 2013. Sayre city manager Guy Hilton said the surgical wing was paid for with a bond and is currently being taken out of the city’s sales tax operating budget.
“We have one penny left [sales tax income] stuck to the operating room we’re stuck paying for,” Hilton said. “That should be gone in the next couple years.”
Sayre isn’t the only town struggling to sustain its healthcare system. Healthcare is a nationwide problem, but it hits especially hard in small, rural areas. Rural areas tend to have a higher percentage of uninsured residents, making them more vulnerable to large, high-cost medical issues and procedures. In regard to the percent of population that is uninsured, Oklahoma sits low in the national ranks. In 2018, 14% of Oklahomans were uninsured; 5.3% higher than the national average of 8.7%.
“The thing that really destroyed- and its destroyed several hundred hospitals across the United States- is that the Medicare reimbursement plan has been drying up,” Lakey said. “Over a five year period, there was over a 35% reduction in reimbursement from medicare.”
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Due to the fact that a large amount of the rural populations are uninsured, rural citizens often wait to seek medical attention until conditions have become extreme. This means people are usually visiting the emergency room rather than a doctor’s office.
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Emergency rooms in these small towns are having to foot the bill for major medical expenses. This trend is the driving cause behind the bankruptcy of rural hospitals. Since 2010, 102 rural hospitals have closed, a majority of those being in the South. Additionally, from 2009 to 2012, nearly all hospitals with fewer than 100 beds faced closure.
One such hospital in Fairfax was the subject of a Washington Post article earlier this year. The Fairfax Community Hospital came into the national spotlight after employees had worked for months with no pay.
The case is currently in bankruptcy court while former employees are seeking compensation for their time working without pay. Fairfax city clerk Raeann Smith explained that the court appointed Thomas Walthrup and the company Cohesive Healthcare to begin managing the hospital while they wait for a buyer.
“The hospital is currently open and honestly seeing more patients than it did before the closer,” Smith said.
Between financial instability and lack of support from insurance companies, it is uncertain whether healthcare in rural Oklahoma will survive.
