Llano Hospital faces operational emergency

The Llano County Commissioners Court took emergency action Nov. 26 to ensure Llano Hospital remains open and running amid concerns about its financial viability from operator Mid Coast Health System.

The county created a fund and approved legal representation during a special-called meeting Tuesday afternoon to negotiate with Mid Coast over potential new management or improving the current situation.

While the county is still learning the specifics of Mid Coast’s concerns, the Commissioners Court took swift action Tuesday to prevent an imminent loss of hospital management and operation services.

“ … There is an indication from Mid Coast as a partner of the county that they are in financial difficulty and there could be a need to respond with county funds on an immediate basis,” explained Llano County Attorney Dwain Rogers.

During the meeting, the court:

• approved a $450,000 budget line item to make potential “emergency payments” to hospital employees and vendors;
• authorized any necessary legal action to help maintain hospital care for patients;
• and approved legal representation by Husch Blackwell for future negotiations.

The Commissioners Court called the emergency meeting two hours prior as the situation was deemed “an imminent threat to public health and safety.”

“We’re preparing for a transfer of management for the hospital,” County Judge Ron Cunningham told DailyTrib.com after Tuesday’s meeting. “We don’t know what that looks like at this time, and that’s what (today’s actions) are doing. This is allowing us to open up a dialogue with Mid Coast for a transfer of management.”

Cunningham said the situation remains in flux, but it was possible that Mid Coast would have ceased operations of the hospital in the near future without immediate action by the county. 

The court is expected to discuss the matter further at its Dec. 9 meeting, which begins at 9 a.m. in the Justice of the Peace Precinct 4 Courtroom at 2001 Texas 16 North in Llano.
County Attorney Rogers said the county has not yet committed to paying for anything, but the budget line item and an attorney contract allow negotiations with Mid Coast to move forward.

Mid Coast Health System is a Texas-based, rural health network with hospitals in Llano, El Campo, Palacios, Crockett, and Trinity and walk-in clinics across the state. The Llano facility is owned by the county but managed by Mid Coast, which has a lease agreement and indigent care contract with the county for a combined $150,000 a year.

Llano Hospital Administrator Hatch Smith provided this written statement to DailyTrib.com regarding the situation:

“Llano has a great asset in this hospital and the clinics that support it. We believe we have a lot going for us and will set a path based off of what the county and (Mid Coast) decide.”

Llano Hospital, 200 W. Ollie St., has 46 employees and is the primary hospital for western Llano County and San Saba County residents.

“Rural hospitals in general are struggling right now, and we’re no exception to that,” Judge Cunningham said.

His assessment is backed up by expert insight from John Henderson, CEO of Texas Organization of Rural and Community Hospitals.

“Low volume is part of the tough recipe for rural health care, but I think it actually starts with demographics,” Henderson told DailyTrib.com. “Rural hospitals tend to serve an older, poorer, less healthy, and chronically ill population.”

He also said uninsured patients and those with Medicare and Medicaid actually cost the hospital money to treat. 

“Uninsured is charity care—you generally don’t get paid for that—but folks who are seniors under Medicare or Medicaid, those payments are typically less than (the cost of treatment),” he explained. “That really puts a lot of pressure on small, rural hospitals.”

According to Henderson, 58 percent of rural hospitals in Texas posted operational losses in 2023. 

“(Rural hospitals) are always going to be vulnerable,” he said.

dakota@thepicayune.com