North Houston News

The bankrupt Huntsville Memorial Hospital in Texas will be owned by the Walker County Hospital District and Community Hospital Corp., which have formed a new entity to operate it, the organizations said.

Huntsville Memorial, a nonprofit hospital, holds 123 beds. It also has a Joint Commission Primary Stroke Center. In November 2019, the hospital filed for bankruptcy when investments and competitive pricing failed, executives said in the bankruptcy forms. 

"Aligning with CHC is the best option for HMH," Walker County Hospital District Board Chair Anne Woodard said. "This move puts us on a path of renewal that allows us to advance on many levels—from operational and financial performance to quality of patient care. We are wholeheartedly committed to serving the health care needs of Walker County and neighboring communities."

Since 2008, Huntsville Memorial opened many rural health care clinics, secured an ambulatory surgery center, and opened a freestanding emergency department. Many of its businesses went bankrupt in 2018 and early 2019, except for an imaging center and one health clinic, the filings said. 

When Texas changed state employees' health care to Blue Shield from United Healthcare, it contributed to Huntsville Memorial's $16.4 million operating loss in 2018, Modern Healthcare Metrics said. The hospital had over $42 million assets and $35 million liabilities, Medicare reports said. 

Huntsville Memorial isn't the only hospital with declining finances. Other independent hospitals have also seen a decline. In 2016, government-owned independent hospitals have a negative 16.6% operating margin and a $15.8 million operating loss. System-owned hospitals only saw a negative 7.9% operating margin in 2016 with $8.4 million operating loss. 

A partnership with the CHC would allow Huntsville Memorial to have a group purchasing contract, CHC President and CEO Jim Kendrick said. 

"I can guarantee 10% savings off of their current supply spend," Kendrick said. "We will hit the ground running with an in-depth operational assessment, making sure their expenses are aligned with revenue production, making sure they are maximizing their federal matching dollars and all of the supplemental payments are realized as we look to keep more medical services in the community."

Huntsville Memorial will keep its same name. Some of the hospital's debts were paid off by the Walker County Hospital District. 

The hospital is only one example of the hundreds of rural Texas hospitals that are now having a difficult time surviving. Over 120 of them have closed in the last decade and more than 450 are struggling. 

The Huntsville community would most likely have lost its hospital without help, Kendrick said. 

"It's devastating to a community when a hospital goes away," Kendrick said.