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After tragic mistake, rural hospital transforms into model of success

March 9, 2016 at 8:13 PM EDT
Since 2010, more than 50 rural hospitals have closed across the country, and hundreds more are at risk. But Hill Country Memorial Hospital in Fredericksburg, Texas, is surviving -- and thriving. Prompted by a tragic medical failure seven years ago, Hill Country has become one of the nation’s top hospitals and a model for others. Special correspondent Sarah Varney of Kaiser Health News reports.

JUDY WOODRUFF: Last week, we brought you a story about the many rural communities in the country affected by a recent wave of hospital closures.

Tonight, special correspondent Sarah Varney takes us to Fredericksburg, Texas, population 10,000, where a hospital is bucking that trend. Its turnaround is seen as a model for other rural hospitals struggling to keep their doors open.

This story was produced in collaboration with our partner Kaiser Health News.

BRAD KOTT, Father of Quinn Kott: This is the picture we really love.

SARAH VARNEY: Brad and Sheryl Kott didn’t think much of it seven years ago, when their 13-year-old son, Quinn — a friendly, energetic athlete — complained he wasn’t feeling well. But soon after, Quinn collapsed on the bathroom floor, and his speech was garbled.

BRAD KOTT: We loaded him in the back of our pickup in the second seat, and we start heading to town to the emergency room right away. And on the way, my wife said, ‘I think he’s had a stroke.’

SARAH VARNEY: After the family arrived at Hill Country Memorial Hospital in Fredericksburg, the Kotts say Quinn’s medical care went terribly wrong. They waited in the E.R. for hours. And the Kotts say the nurses and E.R. doctor were unattentive and callous, at one point deciding to send Quinn home. His mother refused.

SHERYL KOTT, Mother of Quinn Kott: I met the doctor coming down the hall, and I said, ‘Something is wrong with Quinn.’ And he shushed me, because he didn’t want anybody else to hear me. And I said, ‘No. Don’t you tell me to shush. You’re the doctor. I’m the mom. There’s something wrong with my son. And I need to know what’s wrong with my son. And we are not taking him home.’

SARAH VARNEY: It wasn’t until the next morning that a pediatrician finally examined Quinn. He was rushed to a hospital in San Antonio and died soon after. He had had a massive stroke.

For Dr. Michael Williams, then Hill Country Memorial’s CEO, Quinn’s death in 2009 was a crucible moment.

DR. MICHAEL WILLIAMS, Former CEO, Hill Country Memorial: We had a clear opportunity to either do what most hospitals do, and what we had done previously, which was get our attorneys involved, be prepared for a lawsuit, take on a defensive mode, try to really guard ourselves. Or we could take a different approach and work directly, reach out to the family and ask them to partner with us in really transforming the hospital.

SARAH VARNEY: In truth, says Dr. Williams, who is now president of the University of North Texas Health Science Center in Fort Worth, the hospital’s problems went well beyond the E.R.

DR. MICHAEL WILLIAMS: The hospital was in the red on an annual basis. The patient satisfaction was very low. The employee satisfaction was very low. And across the board, what we heard from people was that this used to be the community’s hospital, and now people are leaving the community to go get their care elsewhere.

SARAH VARNEY: The troubled hospital in Fredericksburg was caught up in larger forces. Since 2010, more than 50 rural hospitals have closed across the country and hundreds more are at risk.

Rural populations have declined. And in many places, those that remain are largely elderly or uninsured. At the same time, congressional budget agreements and the Affordable Care Act reduced Medicare reimbursement and subsidies for the uninsured — revenue losses that many rural hospitals have been unable to withstand.

Deep in the Texas Hill Country, the hospital in Fredericksburg was poised to face a similar a fate. Despite the area’s live music scene and strong tourist economy, the hospital was the town’s largest employer, and cherished for much of its history.

When it opened in 1971, 93 percent of the county’s households contributed money, and thousands of people lined up to have a first look. Years later, as the hospital faced the crisis of Quinn Kott’s death, Dr. Williams was determined to bring back that spirit. He studied the Toyota plant in San Antonio, and hired former Toyota employee Jeff Darnaby to help bring the car company’s revered assembly line principles to Hill Country Memorial.

JEFF DARNABY, Hill Country Memorial: The Toyota production system basically allows you to identify waste, and remove that waste from your processes. Anything that doesn’t add value to the customer, to the process, is considered waste.

SARAH VARNEY: Today, at Hill Country Memorial, each department candidly displays specific goals for everyone to see: reduce E.R. wait times, eliminate falls, and improve customer satisfaction.

JEFF DARNABY: This is based off the top five board that we brought here from Toyota. We didn’t meet this goal yesterday. Here’s where we’re working on today. So I know I need to get in this role…

SARAH VARNEY: And this isn’t something that’s just measured once a year or every quarter. These are sort of real-time feedback.

JEFF DARNABY: Yes, it could be down to daily — daily tracking and reporting.

SARAH VARNEY: In addition to Toyota, Dr. Williams turned to a former executive with Southwest Airlines to remake the hospital’s values and culture, and he hired a former trainer from Ritz-Carlton, known for its legendary customer service, to change how patients and families were treated.

DR. MICHAEL WILLIAMS: We took the approach that, if we took patients and we treated them better than they’d ever been treated before, then, in the end of the day, they would drive the bottom line.

SARAH VARNEY: Seven years after Quinn’s death, Hill Country Memorial now ranks among the top 100 hospitals in the country, and recently won the nation’s highest presidential honor for excellence through innovation and leadership.

The sweeping changes can be seen everywhere, from smaller efforts like reducing food waste in the kitchen…

MAN: I have problem. I have my cholesterol, high cholesterol.

SARAH VARNEY: To helping local workers like Domingo Gallegos get healthier with free nutrition counseling and access to the hospital’s wellness center. And to more far-reaching initiatives planned out in the hospital’s so-called “War Room,” where new ventures are hatched to improve care and grow the business.

WOMAN: A lot of patients come to class thinking they’re going to cut out this much of my leg.

SARAH VARNEY: To capitalize on the abundance of Medicare-insured retirees in Texas Hill Country, the hospital developed a well-regarded hip and knee replacement program…

WOMAN: Total knee replacement means they’re resurfacing both sides of the knee.

SARAH VARNEY: … that has attracted patients like George Brannies. At 72, Brannies is a fifth-generation Texan from nearby Mason. He’s a rancher and chairman of the local bank.

After a riding accident a few years ago, Brannies sought care from a renowned surgeon in San Antonio. When the hip surgery failed, he decided to try Hill Country Memorial. Brannies says his surgeon and nurses were so exceptional that he was back on his horse in four weeks.

GEORGE BRANNIES, Patient, Hill County Memorial: They take such good care of you. It’s like doing business at a small-town bank. They give you their cell numbers. They say, ‘Now, if you have a problem, you call us.’ Try this with one of those big city hospitals. It doesn’t happen.

SARAH VARNEY: The hospital now performs some 400 hip and knee surgeries a year, and markets its nationally recognized program well beyond Texas Hill Country.

Jayne Pope became CEO of Hill Country Memorial in 2013. She attributes much of the hospital’s success to its fervent and never-ending focus on improving patient care. Efforts, Pope says, that don’t need to cost a lot of money.

JAYNE POPE, CEO, Hill Country Memorial: We know, as a rural center, we can’t do everything. But what we do is determine what those core competencies are, and we invest in those skills, so that our patients have the best of care.

SARAH VARNEY: But not every rural hospital can replicate Hill Country Memorial’s success.

Len Nichols, a health economist at George Mason University, says many small towns simply can’t sustain an acute care hospital.

LEN NICHOLS, George Mason University: We probably have roughly 20 to 30 percent more hospital beds than we actually need. And so who’s going to lose in the long run? Well, it’s going to be those hospitals that are the least efficient — those who cannot deliver good-quality services for the lowest-possible cost.

SARAH VARNEY: Instead, says Nichols, the dozens of rural hospitals that have closed and hundreds more at risk should consider converting to urgent care centers and partnering with larger regional hospitals. That would allow rural residents to be stabilized and moved quickly to hospitals where doctors often have more expertise.

Brad and Sheryl Kott say the changes at Hill Country Memorial came too late for their family. They’re still haunted by the treatment their son Quinn received and the hospital’s ad campaign that trumpets its care as “remarkable.”

BRAD KOTT: At first, it makes me sick to my stomach, because the hospital wasn’t remarkable at all. And it just — it tears at you when you see a billboard that says that. However, I know that it has transformed into — into that.

And it makes me proud that people in my community took a bad situation, took our tragedy and worked to turn it around.

SARAH VARNEY: For the “PBS NewsHour” and Kaiser Health News, I’m Sarah Varney in Fredericksburg, Texas.

JUDY WOODRUFF: And you can watch the first part of this series that explores the struggles hospitals in rural Georgia are facing on our website,