San Antonio hospital plans to close, unless someone else takes over

Unless there is some kind of intervention, the Texas Vista Medical Center is going to shut its doors on May 1.

Steward Health Care, the for-profit company that operates the San Antonio hospital, says it’s no longer sustainable to operate the medical center. Steward is calling on University Health System and local officials to take over the hospital, which doesn't appear likely.

Both Steward and University Health System are offering sharp criticism of each other over the situation. Meanwhile, local officials are worried about the looming closure of a hospital that offers care for an underserved population.

San Antonio Mayor Ron Nirenberg told KSAT-TV that “any loss of access to health care – particularly in underserved portions of our community – is concerning. The announced hospital closure is a loss for the South Side and our city as a whole.”

Jon Turton, president of Texas Vista Medical Center, said the hospital’s closure would deprive residents of essential services and add to the burdens of surrounding hospitals.

“TVMC does not want to close, and the consequences of our closure will cause an immediate public health crisis for the city’s most vulnerable patients,” Turton said. “We offer critical emergency care and OB/GYN care for the San Antonio area. Given that TVMC is a significant provider of behavioral health care in the region, other hospitals will immediately see an increase in behavioral health patients at a time when that system is already strained.”

‘It is not sustainable’

Steward took over Texas Vista Medical Center in 2017 and said the hospital has struggled financially for years. In a news release outlining the plans to close the hospital, Steward says it can no longer continue to operate the facility.

“The COVID-19 pandemic further placed a significant fiscal burden on TVMC. Steward was able and willing to assume financial losses and risks during that extraordinary public health crisis; it is not sustainable to do so any longer,” Steward said in the release.

Steward attributed some of the medical center’s struggles to being “choked out by the well-heeled ‘public’ hospital competitor across town.”

Steward says the medical center supports a population with limited resources. More than half of the hospital’s patients rely on government assistance for healthcare, so the hospital is paid less than the cost of patient care, Steward says.

“Nearly one quarter of the hospital’s patients cannot and do not pay for the services the hospital provides,” Steward says.

Now, Steward says it has asked University Health System and Bexar County to take over the struggling hospital. The company argues that as a public health organization, University Health System has an obligation to care for those in need, and notes that UHS receives $472 million in local aid while paying no taxes.

Further, Steward says University Health System can afford to take over the facility, since UHS is building another hospital in an area where residents have higher incomes.

“It is part of UHS’ original charter to care for the indigent population of Bexar County,” Steward said in a statement. “This service has largely fallen on TVMC’s shoulders over the past few years. Meanwhile, UHS has used its vast resources to build a half billion-dollar state-of-the-art hospital that will serve a wealthier patient base in a more affluent area.”

Steward Health Care, which operates 39 hospitals in nine states, has made other moves as it focuses on key regions. Steward recently agreed to sell five hospitals in Utah to CommonSpirit Health.

‘Values are not aligned’

In response, University Health System fired back at Steward’s claims. UHS says taking over the 40-year-old facility isn’t a viable option.

UHS said in a statement it couldn’t discuss full details of conversations with Steward Health, which operates the hospital, and Medical Properties Trust, the real estate investment trust that owns the assets of Texas Vista Medical Center and collects lease payments from Steward.

“We can say for certain that these two for-profit, publically traded companies have not given University Health any opportunity to ‘take over control’ of Texas Vista Medical Center under mutually acceptable terms that are in the best interests of the taxpayers of this community,” University Health System said in a statement.

UHS says part of its consideration is the state of the medical center, which would require substantial upgrades.

“The building is more than 40 years old and would require significant renovation and IT upgrades to bring it up to University Health standards,” UHS said in a statement. “The lifespan of a hospital is generally about 50 years due to continually changing technologies.”

University Health System says it is in the process of building a new hospital in the Southside neighborhood on property across from Texas A&M University. Local officials should approve a construction manager this month, UHS said.

While saying it couldn’t disclose details of its conversations about the medical center, UHS said “it has become increasingly clear that our mission and values are not aligned” with Steward and Medical Properties Trust.

“We are disappointed that these two for-profit companies made the decision to identify University Health and Bexar County as somehow being responsible for their inability to successfully operate Texas Vista, and to imply that local taxpayers should bail them out,” UHS said in a statement. “Statements included on their press release about University Health’s mission, strategic priorities, commitment to the underserved and finances are inaccurate.”

UHS says it will work with community partners to ensure patients, including those with behavioral health needs, are able to get treatment. In addition, UHS says it will work with University of the Incarnate Word School of Medicine to develop plans for resident physicians at Texas Vista to be moved to other graduate programs.

University Health System also encourages Texas Vista staff to apply to fill some of the “many open positions” with UHS.

Bexar County officials said they haven’t received a formal proposal from Steward or Texas Vista about taking over the facility, KSAT-TV reported. County officials say they are committed to ensuring residents have access to care and note they have directed $30 million to UHS for the construction of the new hospital.

Troubles in Texas

Hospitals across the state of Texas, like most nationwide, are struggling financially. Nearly one in 10 Texas hospitals faces the risk of closure, according to the Texas Hospital Association.

The association commissioned an analysis of the state’s hospitals from Kaufman Hall, the healthcare consulting firm. Nearly half of Texas’ hospitals (47%) have suffered negative operating margins in 2022, Kaufman Hall found.

Even though the Texas economy is booming and the state’s population is rising rapidly, some hospitals are fighting for their survival, said John Hawkins, president and CEO of the Texas Hospital Association. Some Texas hospitals have cut back on pediatric services, and health systems are grappling with a shortage of workers.

In a briefing with reporters last fall, Hawkins said, “The key takeaway: Hospitals face an existential operational and financial threat.”