As Arkansas hospital struggles, workers, residents on edge

A hallway in the De Queen Medical Center shows no sign of activity Tuesday, with many doors shut tight and the cafeteria closed.
A hallway in the De Queen Medical Center shows no sign of activity Tuesday, with many doors shut tight and the cafeteria closed.

De QUEEN -- It's quiet in the hallways of De Queen Medical Center.

On a recent visit, the lights on a Christmas tree just inside the hospital's main entrance had been turned off, and a sign indicated the cafeteria was closed. A bulletin board noting staff birthdays was decorated with red, yellow and blue paper balloons but was otherwise blank.

In a main corridor's low light, doors to most rooms were shut tight, with a few bearing typed signs that read "Room out of service." Near a well-stocked snack machine, a TV played to no one.

Harmoney Vanhoose, who works in the admissions department, said she gets phone calls all the time asking if the hospital, which serves the roughly 17,000 residents of Sevier County, is still open. Although she estimates about 20 people are still checking in each day, the small town of De Queen has been roiled by reports of trouble at the facility.

Rumors of the hospital's closure have circulated at least since the summer, when the De Queen Bee ran an article in which an official from the Missouri-based ownership group EmpowerHMS denied any turmoil. Concerns intensified in August and through the end of the year, when employees say payroll checks began arriving days late, key staff members such as physical therapists began leaving, and some services, like the wound clinic, began operating intermittently or not at all.

"I've worked in [De Queen Medical Center] for 10 years, and I've never had my paycheck be a couple days late or even a week late [until recently]," said Sandy Webb, a certified nursing assistant in the hospital's home health unit.

In the past several weeks, news reports of financial troubles at EmpowerHMS hospitals have appeared across several states, and Webb said she's spoken with workers about a lack of supplies, such as copy paper, at some of those facilities. De Queen employees say little word from corporate brass, as well as the transfer of former chief executive Ryan Capshew to an Oklahoma EmpowerHMS facility as more than a dozen employees were laid off in December, has left them unclear who's in charge.

Signs such as this one have been taped to a few doors at De Queen Medical Center. Rumors of the hospital’s closure have circulated for months, and workers worry about a shortage of supplies  and late payroll checks.
Signs such as this one have been taped to a few doors at De Queen Medical Center. Rumors of the hospital’s closure have circulated for months, and workers worry about a shortage of supplies and late payroll checks.

But De Queen and Sevier County need the hospital, Vanhoose said, and not just because she has a job there. She lives 30 minutes outside town and needs nearby emergency care. When her son, who is almost 2 years old, hit his head and was knocked unconscious in August, she took him to De Queen Medical Center, where he was airlifted to Arkansas Children's Hospital.

"If we hadn't had our hospital, he could have died," she said. "In a real emergency, if we lost the hospital, I don't know what my family would do."

While workers say their two most recent paychecks arrived on time and the staff members are close-knit, there is anxiety about the hospital's problems. Vanhoose said staff meetings to explain tardy wages -- attributed in the past to computer snags, delayed insurance reimbursements or emergencies -- had trickled off. Webb added that in a recent week, she has scheduled with seven patients, as opposed to the 30 she would have seen last summer.

Everyone in De Queen, residents agree, has an opinion about what's going on at the hospital -- including community leaders, who say they're determined to save it.

"It kind of makes you nervous," Vanhoose said. "We [employees] don't have the inside knowledge. We just kind of have to wait and see what's going to happen."


About 6,500 people live in majority-Hispanic De Queen, which is in south Arkansas near the Oklahoma border. The hospital is a squat beige complex on a short commercial strip of dollar stores, vape shops, farm equipment dealers, motels and churches.

Though there are several primary and urgent care clinics nearby, De Queen Medical Center is the county's sole provider of its kind. The nearest comparable facilities are Howard Memorial Hospital in Nashville, about 32 miles away, and Little River Memorial Hospital in Ashdown, about 36 miles away. All are "critical access hospitals," a special designation for facilities in rural areas that offer inpatient acute care and emergency services.

That distance is part of why the hospital is viewed as essential, especially for the county's many lower-income people who "can't afford to drive to Texarkana, or drive to Little Rock, or drive to Hot Springs, to get their care that they need," said Rep. De Ann Vaught, R-Horatio, who represents the area. In terms of indigent care, the nearest National Association of Free & Charitable Clinics member is listed in Nashville, more than 40 minutes from De Queen.

The hospital is where employees of the meat-processing plant and major county employer Pilgrim's can seek treatment in the event of an accident, Vaught said. Patients also travel from the town's primary care clinics for lab and radiology work, and Greg Ray, the county judge of Sevier County, said that the jail transports inmates to the hospital for medical attention.

For county residents, it comes down to the everyday business of health care when things go wrong.

Steve Cole, who chairs the area's rural development authority and is chancellor of the University of Arkansas Cossatot Community College in De Queen, tapped the breast pocket of his jacket as he described the heart condition that sent him to De Queen Medical Center's emergency room last spring. While working in the Salvation Army store on Dequeen Avenue -- two pairs of boots tucked under her arm -- Virgie McPherson said her daughter, who is diabetic, had gone to De Queen Medical Center when she needed emergency treatment for a tonsil infection.

"Her blood pressure went plumb down off the scale," she said.

McPherson and some community leaders, including Vaught, contend that the hospital's difficulties precede its current owner. According to Arkansas Democrat-Gazette archives, the hospital filed for bankruptcy protection in 2004 before being sold to Louisiana-based JCE Healthcare in 2005. That group sold it to EmpowerHMS, a company whose website says it specializes in rural and distressed hospitals, in 2017.

Vaught is critical of the hospital's ownership history generally, saying out-of-town owners "don't understand what it means to invest in the people here, because they're not from here." But employees say the sale to EmpowerHMS offered new problems, including late payrolls.

Documents obtained through an Arkansas Freedom of Information Act request say the payroll problem first came to the attention of the Arkansas Department of Labor in August. No similar claims, with the exception of a complaint about being made to work off the clock and an inquiry about unpaid vacation hours, were made over the previous eight-year period.

Records show investigations looking at claims alleging late pay, unpaid overtime and unpaid insurance premiums and taxes on employees' behalf continued through December. Just two months before, Capshew, the former CEO, had given an interview to the De Queen Bee and said the hospital was in its strongest financial position in months.

The state Labor Department has referred most claims to federal labor regulators, according to those same documents. In a letter closing the local investigation dated Jan. 2, an Arkansas official said the U.S. Department of Labor had informed its state counterpart that it was "actively pursuing the investigation regarding Empower HMS/Dequeen Medical Center."

Meanwhile, a series of meetings in De Queen, including both private convenings of town leadership and public forums, have rallied the town to discuss the situation and form a plan.


Democrat-Gazette file photo

Steve Cole is shown in this file photo.

As Ray pointed out, the hospital is owned by a private company, so local officials' hands are somewhat tied in terms of what they can do. But he thinks the community will get behind any initiative to preserve the hospital, which he said affects every resident in the county.

"A lot of people think [the hospital is] a first-aid station," said one De Queen resident, who said she works as a housekeeper at a school but declined to provide her name. "[But] a first-aid station does sometimes mean the difference between life and death."


Rural hospitals across America, which make up slightly less than half of the country's hospitals, collectively face challenging conditions -- mostly trouble covering costs, according to a report from the U.S. Government Accountability Office. The North Carolina Rural Health Research Program counts 94 such hospitals that have shuttered since 2010, most of which are in the South.

For rural hospitals, falling populations, a decline in inpatient care and policy changes such as Medicare payment reductions have created an overall strain on finances. If they close, at the negative extreme it can lead to "a complete void" in health care services in a community, said Keith Mueller, director of the Rural Policy Research Institute's Center for Rural Health Policy Analysis at the University of Iowa.

But Arkansas has largely been spared this trend, with no rural hospitals closing during the period studied by the North Carolina researchers. According to the accountability office analysis, states that expanded Medicaid -- like Arkansas -- have had fewer rural hospital closures than those that did not.

In addition to the jobs they provide and the economic development they're thought to sustain (companies doing site selection often check to see if a town has critical care, De Queen and Sevier County Chamber of Commerce executive director Suzanne Babb said), maintaining hospitals in more remote places matters in part because of what's called the "golden hour" in medicine.

In the first 60 minutes after an accident or serious health event such as a heart attack, "if [a patient does] not receive health care, their likelihood of surviving, or surviving without difficulties throughout their lives, disabilities, [goes down]," said Bo Ryall, president and CEO of the Arkansas Hospital Association.

Ryall said that although the association is pleased that there haven't been any recent rural hospital closures in the state, viability is a challenge and facilities are in "constant experimentation" to find what works. Sometimes this is called "redefining the H," or changing an understanding of what a hospital is -- identifying what services are most critical for local populations, and managing financial challenges such as uncompensated care for uninsured patients.

Chad Gallagher, a businessman and former De Queen mayor, said he doesn't see the problems in his area as significantly different from those faced by hospitals in other rural places. A low volume of patients and what's called "economies of scale" (basically, having less bargaining power than bigger health systems) both play a part.

He said the main objective for the town, despite any problems with the hospital's ownership, should be keeping the hospital running and its employees in their jobs.

"Regardless of any challenges between the owner and employees ... it doesn't benefit us if the hospital were to close, or to fail, or shut down," he said, adding that De Queen residents don't want to wake up "and have the hospital have a closed sign on the front door."


Attempts by the Arkansas Democrat-Gazette to obtain comment on the state of the De Queen hospital from administrators, EmpowerHMS, EmpowerHMS CEO and hospital owner Jorge Perez and Capshew have been largely unsuccessful. When reached briefly by cellphone, Perez declined to comment, saying he was "not happy with the press."

Calls and messages to other parties listed above, when returned, were generally returned by Michael Murtha, president of the National Alliance of Rural Hospitals.

EmpowerHMS and De Queen Medical Center pay what dues they can afford to belong to the advocacy group, which is not a nonprofit, Murtha said. It appears closely tied to EmpowerHMS, as most of its charter members belong to the company and Perez is listed as the chairman of its board.

However, Murtha said he does not work for the EmpowerHMS company and is not its spokesman, though he had been asked to field media requests "this week" for De Queen Medical Center.

"[The hospital's owners] are committed to righting the ship, moving forward and getting over this hump. ... They've poured a lot of money into keeping the payroll going and keeping the facility's doors open," Murtha said.

Murtha did not have answers to or did not have a comment on several specific questions about the hospital's operations, the transfer of its CEO, the Labor Department's investigation or its finances, but said he would pass along a request to speak directly to company officials.

On a visit to De Queen Medical Center seeking comment for this article from hospital administrators, a reporter was told that all were at lunch and two of three were not expected to return.

When the reporter offered to wait, an employee said she would text-message administrators to notify them of the reporter's arrival. Within several minutes, two workers -- who said they typically work in maintenance but were serving as a security team -- arrived and asked the reporter to leave.

The workers, who wouldn't give their names, cited a company policy prohibiting interviews on the hospital campus and the Health Insurance Portability and Accountability Act, a law which generally governs patient medical records, not media requests. They also said administrators had called them to eject the reporter, and indicated that other reporters had waited in a nearby church parking lot.

The closest church appeared to be De Queen Church of Christ -- across a busy highway and hundreds of feet from the hospital entrance.

Recently hospital employees also told De Queen Bee Editor Marty Bachman to leave hospital grounds, where he said he had been invited for an interview. Bachman posted an audio recording of the interaction on that newspaper's website.


While the fate of the hospital remains uncertain, many in De Queen say the situation has strengthened community ties.

Around the holidays, a doctor handed out groceries to hospital employees after a late paycheck. At public forums, town leaders have fielded questions, worked to quell what they refer to as a "rumor mill," and encouraged people to keep using De Queen Medical Center's services.

County health officer and family physician Jason Lofton, who visits his patients inside the hospital, said he hasn't seen any problems with the quality of care that is offered there. Babb said large employers in the area have offered their assurances that problems at the hospital won't affect their own operations.

Among community leaders, there is much talk of what might happen if the hospital were to come under local or public control, such as county control. Perhaps six or eight hospitals in the state are under county control, said Ryall, the hospital association president.

One of the people spearheading that conversation is Gallagher, who would like to see the hospital returned to ownership under a local nonprofit entity, as he said it was at one point.

"It just makes sense for the primary decision makers to live in that community ... If that's where you take your children to the ER, that's impacting," he said.

Gallagher said he has been in touch with Perez, the hospital's owner, about the future of the facility. At former ownership group JCE Healthcare, chief financial officer Vicky Kelley said she recently received a call from a different party inquiring about the terms of the hospital's sale.

But a sale of the hospital to the county, or a public nonprofit entity, is far from assured. For one thing, most say they do not think the hospital is officially up for sale. (Ray said the idea of approaching a private company to say "we want your business" is "just not America.")

At this time, the county is not putting together a bid to buy the hospital, and there isn't cash on hand to make a purchase of that size, said Sevier County economic development director Lisa Taylor. University of Iowa researcher Mueller noted that generally, public control is not a magic bullet for struggling hospitals, as it puts taxpayer dollars at risk in service of a hard problem.

A town proposal to purchase the hospital also would be complicated by what appear to be financial issues at the ownership group. A Kansas City Star report Thursday detailed how the towns of Prague, Okla., and Hillsboro, Kan., hope to extricate local hospitals from EmpowerHMS ownership after problems with unpaid utility bills. (The Hillsboro hospital narrowly averted an electricity shutoff with a $16,644 payment Friday, a report said.)

An upcoming hearing will consider whether to place another EmpowerHMS hospital in Ripley, Tenn., in receivership, according to the deputy clerk for one of that county's courts.

When asked, a few employees at the hospital said they'd support whatever plan would keep the hospital open. They say the particulars of the structure don't matter as much as keeping the facility in business -- and their paychecks arriving on time.

"I'm not a businessperson by any means. I'm just a nurse," said Brandy Gore, who has worked at De Queen Medical Center for more than 10 years. "I just try to stay optimistic ... [this is] where I plan to live the rest of my life, and I want a good hospital."

Metro on 01/13/2019


Special to the Democrat-Gazette

Rep. DeAnn Vaught, R-Horatio


A map showing the location of De Queen.


Democrat-Gazette file photo

Chad Gallagher, a businessman and former De Queen mayor, is shown in this file photo.

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