East Texas Medical Center Regional Healthcare System announced Thursday it will discontinue inpatient services at its hospitals in Gilmer and Mount Vernon while continuing to offer clinics and other services at the facilities.

ETMC also has informed the hospital authority in Clarksville that it will not renew its management lease for the hospital there when the current contract expires in 2016.

At least 80 employees will be affected by the closures.

Perry Henderson, senior vice president for affiliate operations for ETMC Regional Healthcare System, blamed the changes on financial cuts for health care in the U.S.

“The clear signal that’s being sent from the government and other payers is that costs must decline,” Henderson said. “For example, in 2013, Medicaid reimbursed most hospitals less than 50 percent of their Texas Health and Human Services Commission-audited allowed costs for inpatient care, according to the Texas Hospital Association.”

ETMC’s decisions affecting Gilmer, Mount Vernon and Clarksville came “after a very thoughtful analysis of the current situation and projecting into the future,” Henderson said.

“Financial cuts are causing health care providers across the nation to refocus their resources to serve as many people as possible. Unfortunately, the end result is that services must be eliminated in some areas where patient volumes are low.”

Henderson added, “ETMC has a long history of extending health care to the rural communities of our region. We will continue to fulfill this mission, but we must adjust our service levels in light of the financial constraints we face.”

Inpatient care at ETMC Gilmer will cease Jan. 1, according to a news release.

ETMC Gilmer will continue to operate as a 24-hour emergency center providing full-service emergency care and trauma stabilization as well as laboratory and radiology services. ETMC First Physicians clinic at the hospital will continue to operate as usual.

“Making this decision was difficult,” Henderson said. “When ETMC came to Gilmer in 1997, the hospital had been closed and boarded up for two years. We take great pride in knowing that we reopened this facility and made healthcare more accessible to the people of Upshur County.”

Nevertheless, Henderson said “poor utilization and declining reimbursements across the board make providing inpatient care unfeasible. … When you average only two to four patients a day, you can’t even begin to cover the overhead costs associated with providing quality inpatient care. This underutilization combined with declining reimbursements rates, especially from Medicare and Medicaid, led to unsustainable losses at the hospital.”

Henderson added, “We tried providing inpatient care for the past 10 years and despite some of the highest patient satisfaction scores in the nation, filling our beds has been a struggle. So we are going to return to our roots in this community and refocus our efforts on emergency and primary care.”

Approximately 40 employees will be affected by the phase out, Henderson said.

In addition to the emergency center and physicians clinic, ETMC EMS and ETMC Home Health will continue to serve Upshur County residents.

ETMC Regional Healthcare System notified Franklin County officials of the system’s intent to terminate its lease at ETMC Mount Vernon, effective Jan. 1.

Approximately 40 employees will be affected by the closure, Henderson estimated.

The ETMC First Physicians clinic in Mount Vernon will continue to operate with Dr. Jean Latortue and nurse practitioner Delisa Brooks providing care.

“ETMC has leased this hospital for more than 25 years, so this decision is one we struggled with and did not make lightly,” Henderson said. “However, the reality of the situation is that due to changes in health care and low patient volumes at this facility, we can no longer afford to operate a hospital in this community.”

Henderson noted that the emergency department saw on average eight patients a day, and the hospital averaged only three or four inpatients a day.

“With utilization numbers like these, you can’t even cover the overhead associated with keeping a hospital open and providing quality care,” he said.

ETMC Regional Healthcare System notified the ETMC Clarksville board of directors in June that it will not seek renewal of its lease of ETMC Clarksville.

ETMC has leased the Clarksville hospital since 1996 and the current lease expires March 31, 2016.

“We are saddened to inform the community that we will not seek renewal of our lease when it expires,” Henderson said. “Despite strong support from the community, our providers and our hospital staff, utilization levels and declining reimbursements across the board make our continued involvement unfeasible.”

Henderson said the average inpatient census for the hospital is seven and the emergency room averages less than one patient visit per hour.

“This lack of utilization coupled with cuts in Medicare and Medicaid reimbursements have led to unsustainable financial losses at the hospital for the past few years,” Henderson said.

“ETMC has been part of Red River County for more than 18 years, so this was not an easy decision, nor one we took lightly. … We offer our assistance to the hospital authority as they begin the search for a new lessee.”