State Pays Millions for COVID-19 Hospital Beds, But, to Officials’ Relief, They Stay Empty

Alarmed by warnings of hospital wards filling up as COVID-19 cases surged, Oklahoma officials last month agreed to contracts worth millions of dollars with hospitals in Oklahoma City and Tulsa to reserve bed capacity.

Now, as the state embarks on the first phase of a reopening plan after six weeks of lockdown, those beds will likely be empty for now as the most dire warnings haven’t materialized.

The Oklahoma State Department of Health is paying Oklahoma State University Medical Center-Tulsa and Integris-Baptist Medical Center-Portland Avenue in Oklahoma City each more than $330,000 a day for 245 surge-capacity beds under contracts renewable for up to three months. That could total more than $33 million for each hospital through mid-summer.

The additional capacity was a key part of the state’s COVID-19 hospital surge plan announced by Gov. Kevin Stitt and the Oklahoma Hospital Association at an April 10 news conference in Tulsa.

Officials said the state’s costs to reserve the hospital beds would be reimbursed by the federal government, which under the CARES Act has sent more than $1.25 billion in funding for COVID-19 expenses. The state is also looking at federal grants to help pay for the bed reservations.

Oklahoma Watch obtained copies of the hospital surge-capacity contracts after filing an Open Records Act request with the health department.

Jerome Loughridge, Oklahoma’s secretary of health and mental health, said health officials at the time were looking at the COVID-19 situation in states like New York and Louisiana and didn’t want Oklahoma hospitals to be overrun.

“If you were going to accommodate the medium or high cases on what we were predicting, it was a given you had to have more beds,” Loughridge said. “I would just say it would have been the height of irresponsibility if we had said, ‘We’re just not going to believe the model.’ That would have been malfeasance.”

The contracts were signed in mid-April at a time when infection models used by the state were showing hospitalizations reaching between 2,170 and 3,941 by the end of the month. The state developed its own model and used iterations of modeling done by the Institute for Health Metrics and Evaluation at the University of Washington.

The latest COVID-19 report shows Oklahoma had 236 patients hospitalized with confirmed or suspected cases of the disease on Friday. To date, more than 730 people in Oklahoma have been hospitalized with COVID-19.

The state’s hospital surge plan had three phases, with existing hospitals across the state being the first line of defense. They were expected to be able to expand their capacity by 40 percent to treat both COVID-19 and other patients. The second phase involved using OSU’s hospital in Tulsa and Integris-Portland to treat additional COVID-19 patients once the other hospitals were full. A third phase involved alternative care sites built quickly by the U.S. Army Corps of Engineers to treat non-COVID-19 patients.

While the hospital surge-capacity contracts appear generous, state officials said they cost less than other sites scouted by the Army Corps of Engineers. For the Oklahoma City area, that included the downtown Cox Convention Center and a closed specialty hospital in Norman. In the Tulsa area, it included the River Spirit Expo and the Renaissance Hotel and Convention Center.

Loughridge said converting a convention center or fairgrounds arena for COVID-19 patients wasn’t the best option for maintaining a good standard of care. Reserving capacity in existing hospitals meant the entire health-care infrastructure was readily available, from linens to food service and diagnostic capabilities. Those ancillary services didn’t have to be set up in a new space and torn down when no longer needed.

‘They would have unquestionably been higher in any alternative setting than a hospital that already had those,” he said. “We have to view this in the vein of really critical, potentially life-saving, insurance. And that’s how I view it.”

Loughridge said when state officials began discussions with the Army Corps of Engineers and the hospital association about surge-capacity options, some hospitals expressed concerns that the reserved beds could interfere with their specialty and sub-specialty care.

“We still had to accommodate the bad things that happened to people’s health in the interim,” he said. “Not every hospital would have even been able to accommodate that without serious disruption to what they otherwise had to do.”

Both contracts allow the health department to reactivate the leases in the next year if additional waves of the outbreak spread throughout the state. In that respect, they take on a function much like the old tuberculosis hospitals or sanatoriums of the 19th and 20th centuries.

“We’re wicked thankful right now that we have not had to use any of them,” Loughridge said. “I kind of echo the general in charge of the Army Corps of Engineers when he was asked, ‘How do you view an empty bed?’ And he said, ‘As a success.’ We’re grateful that we know Oklahomans have flattened the curve and we haven’t had to use them yet.”

The U.S. Army Corps of Engineers has helped build alternative care sites in dozens of cities. It recently awarded contracts to Manhattan Construction Co. to retrofit the OSU Medical Center and several floors at Integris-Portland. Integris acquired the old Deaconess hospital site in 2018.

Under the surge-capacity contracts, OSU will be paid $375,000 per day to hold open 125 hospital rooms. Integris-Portland will be paid $330,000 per day for 110 COVID-19 hospital rooms. Those costs don’t include staffing the beds, and the hospitals will still be free to bill government and private insurance for the cost of treatment.

Patti Davis, president of the Oklahoma Hospital Association, said she hopes Oklahomans will continue to be mindful of social distancing guidelines as the state embarks on the first phase of reopening. On Friday and Saturday, as the reopening picked up pace, some Oklahomans posted on social media that they had seen more people and staff in restaurants and other businesses who weren’t using masks or gloves. The association recently released a surge planning toolkit for hospitals.

“It’s very true that we didn’t hit a surge, but at the same time, our PPE (personal protective equipment) levels are not back to where they were prior to COVID,” Davis said. “And our supply chain is still disrupted. It’s better, but it’s not back to normal. More testing is coming online, but that’s got a ramp up and that’s an important piece of Oklahoma opening back up. Clearly, we’re not back to normal yet. We’re still limiting visitation (in hospitals) and making sure that we can protect our healthcare workers as absolutely best we can.”

The latest Institute for Health Metrics modeling, released April 29, no longer provides long-term projections for Oklahoma because its model doesn’t account for the relaxation of social distancing rules.

“Our present modeling framework does not yet capture how the risk for more COVID-19 cases – and potentially deaths – could increase due to increased interaction among individuals,” the institute said in its update. “This is particularly true if locations have not fully instituted strong containment strategies like widely available testing and contact tracing.”

Meanwhile, after media reports of questionable spending by the state for PPE and once-promising treatments, Oklahoma Attorney General Mike Hunter requested an investigative audit of the health department. Stitt and health department officials said they’ve been transparent about COVID-19 spending and will comply with any requests by State Auditor and Inspector Cindy Byrd.