Texas Vista Medical Center officially closed on May 1.

San Antonio Express-News 
Madison Iszler
May 02, 2023 at 05:00AM

Texas Vista Medical Center, one of only two hospitals serving San Antonio's South Side, shut its doors Monday after 40 years of treating patients of modest means.

“We were there for the patients,” said registered nurse Maria Hartman, 55, who had worked on and off at Texas Vista since 1994. “Some of them, they’re like, 'Where we gonna go? '”

Hartman grew up on the South Side, and she sometimes treated patients at Texas Vista who knew her when she was a child.

She and her colleagues were blindsided when they learned in early March that owner Steward Health Care System was closing the Southwest Side hospital.

“It’s like graduating high school,” Hartman said. “All of a sudden, all those memories are gone.”

Texas Vista, located at 7400 Barlite Blvd., served many low-income patients with chronic illnesses, such as diabetes. Melissa Huchin, a labor and delivery nurse, said the hospital's staff tried to provide a judgement-free place for the sick in their care. 

Huchin's in-laws, who live nearby, went to Texas Vista whenever they needed emergency care. She doesn't know where they will go now.

"I've cried for the patients in the community over there — it's frightening," she said.

The 47-year-old nurse, who is relocating to Corpus Christi for a new job, said she's also devastated to lose her Texas Vista co-workers. They struggled together through the pandemic, saved lives and brought babies into the world, and they shared weddings, divorces and deaths. She recalled potlucks, parties and birthday celebrations.

"It's heartbreaking," Huchin said.

Dallas-based Steward, which describes itself as the largest private physician-led health care network in the United States, announced March 1 that it would shut down Texas Vista effective May 1 unless Bexar County and University Health took over the hospital.

The facility served “limited-income, high-needs” patients, nearly a quarter of whom did not pay for services and over half of whom were Medicare or Medicaid patients, Steward said.

When the company acquired Texas Vista in 2017, it said the hospital — then known as Southwest General — was under financial strain and being “choked out by the well-heeled 'public' hospital competitor across town.” The COVID-19 pandemic dealt another blow, and Steward said it was “not sustainable” to continue shouldering financial losses and risks.

County staff said they met with Texas Vista, and the hospital's leaders asked for a bailout of up to $10 million and said the hospital was not closing. County-owned University Health received a proposal from Steward for a takeover with a deadline three business days later, March 1 — when the company made its closure announcement.

County and University Health officials said taking control of Texas Vista would be a Band-Aid solution and not a prudent use of taxpayer dollars. 

Renovating the aging facility would be expensive, they said. The alternative, building a modern medical center at the site, would be difficult because of space constraints. And besides, a new South Side hospital is already in the works.

University Health acquired 68 acres near Texas A&M University-San Antonio for a 256-bed hospital it is building through a $500 million deal with the university. It is scheduled to open in 2026 or 2027.

“Is it better to have a hospital next door? Of course,” University Health President and CEO George Hernandez said. “But we can’t put a hospital everywhere. It’s got to be financially viable. I think the story with Texas Vista is it’s not financially viable.”

Before Steward made its announcement, employees said they knew the hospital was in financial trouble.

The company missed payments to vendors. The phones stopped working more than once, and employees were told Steward hadn't paid the bill. They'd try to order office supplies and learn that the facility's credit was on hold. As the hospital was being cleared out ahead of its closure, the recycling hadn't been picked up because Steward hadn't paid the bill, workers said.

A Steward spokesperson said the company will pay all Texas Vista vendors.

The University of the Incarnate Word and the Texas Institute for Graduate Medical Education and Research, a subsidiary of the university, allege in a lawsuit that Steward and Texas Vista owe $4.5 million for services provided by UIW medical residents.

In recent weeks, local hospital systems held job fairs, and many of Texas Vista's 800-plus employees found new positions. Patients were moved to beds at other facilities.

For the first time in decades, the facility is deserted.

"If you look in the hospital right now, it looks like a movie," Huchin said. "It's very surreal."

'Inflated rents'

Aside from the cost of upgrading Texas Vista, University Health and county officials also expressed concerns about the businesses they would be dealing with — Steward and Medical Properties Trust, a real estate investment trust that leases the Texas Vista real estate to Steward.

In the past, Steward has threatened to close hospitals it operates in other states unless local governments step in.

A spokesperson for University Health shared research about the trust, including a report by short-seller Viceroy Research claiming that Medical Properties Trust, Steward's landlord, "has engaged in billions of dollars of uncommercial transactions with its tenants and their management teams in order to mask a pervasive revenue round-robin scheme and/or theft.”

Viceroy is shorting Medical Properties Trust's stock, meaning that it profits if the trust's share price drops. Medical Properties Trust is suing Viceroy for defamation. 

Another report focused on how real estate investment trusts are changing health care and included a case study on Steward and Medical Properties Trust. It delved into the alleged damage Steward's lease agreement with the trust does to its hospitals’ finances.

Health care real estate investment trusts are working with private equity firms to purchase hospital real estate and lease it back to hospital operators, often at "inflated rents," and using the proceeds to pay dividends to investors rather than to upgrade medical facilities, authors Rosemary Batt and Eileen Appelbaum wrote in the report. Steward is Medical Properties Trust's largest tenant.

"Who were the winners and losers in these transactions? Clearly patients, health care workers, suppliers and communities lost out. In the tension between making ever increasing rent payments that reduce hospitals’ net revenue and improving hospital technology, processes and wages, rent payments took precedence," Batt and Appelbaum said.

In an audio recording obtained by CBS News, Steward's leader said during a March meeting that Steward was "trying to get out of lease obligations."

The company pays Medical Properties Trust about $5 million annually to rent the Texas Vista facility, which is 3 percent of the hospital's annual budget, a Steward spokesperson said.

"It was absolutely not a factor in the decision to close," the spokesperson said. "Twenty-five percent of the patients at (Texas Vista) do not pay for care. Staying open was not possible under those circumstances.

A spokesperson for Medical Properties Trust said, "No hospital in our portfolio has ever failed or curtailed services due to an inability to pay rent, as rent constitutes only a small percent of overall hospital expenses."

The trust's "core mission is to ensure that hospitals within our portfolio remain financially sound and continue to serve their communities over the long term," the spokesperson added.

Figures reported to the state showed that Texas Vista struggled in its competition with other health systems in San Antonio.

Texas Vista's gross patient revenue increased nearly 4 percent to $690 million from 2017 to 2021, and about 66.3 percent of the hospital’s revenue in 2021 came from Medicare and Medicaid.

Baptist Health System, which is part of Dallas-based Tenet Healthcare Corp., reported revenues at its local hospitals — including Mission Trail, the only other full-service hospital on the South Side, aside from Texas Vista — surged 47 percent to $9.7 billion during that same five-year period. About 56 percent of that revenue came from Medicare and Medicaid in 2021.

At University Hospital, revenue jumped 41.4 percent to $4.3 billion, with about 48 percent coming from Medicare and Medicaid in 2021. Christus Santa Rosa Health System, which is a nonprofit system, reported revenues at its three local hospitals increased 53.4 percent to $1.9 billion; 54.8 percent of its 2021 revenue came from the government health plans.

Hospital finances

A recent Express-News investigation of health inequities showed that medical facilities are heavily concentrated on San Antonio's North Side, leaving South Side residents with few options. 

Many of the hospitals and surgical centers in northern San Antonio are in neighborhoods where patients are generally wealthier and healthier, and providers collect higher reimbursements from private insurers than from Medicare or Medicaid, according to the "Access Denied" investigation.

For every eight emergency rooms on the North Side, the South Side has one.

District 4 Councilwoman Adriana Rocha Garcia initially called for University Health to take control of Texas Vista, which is in the district she represents.

“There are wonderful, perfect hospitals in the (South Texas) Medical Center,” she said. “However, our people need access to a hospital that’s nearby them because that helps their families as well.”

Robert Bonar, who worked as a physical therapist at Texas Vista for two years, said the hospital had improved since Steward took over and the "quality of care, the types of doctors and the level of services," including psychiatric, cardiac and neurological care, are not available anywhere else nearby. 

Bonar, 52, said he was sorry for Texas Vista's patients.

"The South Side gets overlooked all the time" he added. 

madison.iszler@express-news.net