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DeQueen Medical Center Closes Doors, Part of Larger Trend of Closings

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by Matthew King

After months of not seeing a single patient, the DeQueen Medical Center has officially closed its doors. Sevier County currently has around 17,000 residents with the nearest hospital with similar qualifications to DeQueen Medical Center being more than 30 miles away.

The owner of the hospital, Jorge Perez, attempted to file for Chapter 11 bankruptcy in April. Later, a judge in Florida filed an order of dismissal that allowed the county to work on a correction plan for the hospital and prevented the owners from transferring and spending the hospital’s assets. 35 employees remained without pay in the hospital’s final days.

The Sevier County Rural Development Authority worked for months to keep the hospital afloat and to also create plans for a new facility.

“We have been trying for several months to save this hospital and we had been negotiating with the current ownership. We tried to purchase the hospital several different times and every time that we would try to purchase it there would always be a problem,” Dr. Steve Cole, Sevier County Rural Development Authority chairman, says. “The owner either would back out or later on we started to find out that it just wasn’t going to be possible to purchase this hospital because they’re too many liens and judgments against it.”

Sevier County officials held a press conference last week to discuss the news. The development authority decided to voluntarily suspend the hospital’s license with the Department of Health and the Center for Medicare Services partnership and what is being done for the county have another hospital.

The Sevier County Rural Development Authority proposed a sales tax at the press conference so the county can get the funding for a new hospital, though it is unknown how much of an increase they will seek.

“We just now closed the hospital, now the work begins because there’s just an awful lot of work to be done,” says Cole. “We’ll talk about bond issues, we’ll talk about sales tax issues, we’ll talk about architects, we’ll talk about pro forma statements. There’s an awful lot of things to talk about, to unravel as we go forward.”

According to the U.S. Government Accountability Office (GAO), there has been an increase in the number of rural hospitals closed in the past five years. Sixty-four rural hospitals closed from 2013-2017, with rural hospitals in the South heavily impacted.

In just the first three months of 2019,102 rural hospitals in the United States closed, according to the Arkansas Hospital Association.The DeQueen Medical Center, however, is the first hospital in Arkansas to close.

“The Arkansas Hospital Association – our board, staff and members – are distressed and disheartened by the news that De Queen Medical Center has closed. A hospital closure leaves a town poorer in health and poorer in economic viability,” AHA President and CEO Bo Ryall said in a statement. “In many of our communities, the hospital is the largest employer, and 40 Arkansas counties are served by a single hospital. Without a hospital, the most vulnerable residents – often the elderly and those living in poverty – may find their access to health care severely limited.

A major cause of the hospital closures has been financial distress brought on by decreases in the number of in-patient visits to hospitals and reductions in Medicare payments, according to the GAO.

Ryall also says the hospital closures can be largely attributed to narrower margins that make it difficult to cover established costs. “When a hospital faces closure, it is largely due to negative margins that make it difficult to cover fixed costs. That financial distress is exacerbated by various factors, including decrease in patients seeking inpatient care, reductions in Medicare bad debt payments, and across-the-board Medicare payment reductions. Even slight reductions in payments hit rural hospitals particularly hard, because they must maintain fully functional facilities – prepared to treat an array of care needs – despite lower patient volumes,” he says.

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