Staff cuts made at Llano Hospital amid financial struggles
Llano Hospital is facing financial troubles, and major staff cuts were made to help keep costs down. The hospital’s service provider, Mid Coast Health System, is in negotiations with Llano County, which owns the hospital, to find a solution to the money troubles. Photo by Brittany Osbourn
Mid Coast Health System has made major staff cuts at Llano Hospital as it struggles to bring in enough revenue to function. Negotiations between Mid Coast and Llano County, the hospital’s owner, are ongoing to find a solution to the money troubles.
Mid Coast Health System has operated Llano Hospital, also known as Mid Coast Medical Center-Central, since 2021 after Baylor Scott & White Health ended its management of the facility at 200 W. Ollie St. in Llano.
According to a Mid Coast media release issued Dec. 13, the hospital’s financial issues are due to general funding problems of rural hospitals, inflation in the aftermath of the COVID-19 pandemic, increased staffing costs, changes in Medicare usage, and a decline in patients.
Twelve of the 47 Llano Hospital employees were furloughed Dec. 13. Mid Coast said the changes will not affect local services or hours of availability.
“Many of the professionals from our health system team have worked diligently to avoid many of the measures we are implementing,” Mid Coast Health System CEO Brett Kirkham stated in the media release. “These steps are necessary to manage the facilities in Llano efficiently and ensure ongoing availability of healthcare services.”
The staffing cuts should net the hospital an extra $30,000 per payroll cycle.
One of the cuts made was Mid Coast Medical Center-Central CEO Hatch Smith, who told DailyTrib.com he was willing to continue working for free if necessary after the furloughs were announced, but his offer was denied.
“I had an idea that I was going to be one of the (those being furloughed). I knew I was going to be furloughed because I pushed back on some unreasonable requests,” he said. “But I was shocked that 11 others were furloughed as well.”
Smith was responsible for brokering the deal to bring Mid Coast to Llano after Baylor Scott & White ceased its operation of the hospital in 2020.
“At this point, I hope the county and the leadership at (Mid Coast) can reach an agreement,” he said.
Mid Coast made it clear in its media release that government contributions might be necessary to maintain the hospital.
“MCHS has been transparent with Llano County officials regarding the need for additional financial support through local tax dollars and/or philanthropy to maintain current operations,” Kirkham said. “Profitability without local support will continue to limit the development of a strong local healthcare system as Llano County grows.”
County officials saw the staffing cuts coming, and held an emergency meeting Nov. 26 to lay the groundwork for negotiations with Mid Coast to continue operating the hospital for the near future.
“We thought what they did now was imminent, so we took that action with the goal of having that money available (to intervene if necessary),” County Judge Ron Cunningham told DailyTrib.com on Dec. 17. “We are still seeking resolution with Mid Coast on what the true costs are to operate the facility, and what the future holds.”
Cunningham was referring to the Commissioners Court’s Nov. 26 decisions to set aside $450,000 for potential payouts to hospital staff and approval of legal representation to open negotiations with Mid Coast.
The judge agreed with Mid Coast’s assessment of the challenges in maintaining the hospital, and rural healthcare in general, but noted the county could not offer funds without a better picture of the hospital’s finances.
“We need to know what’s working and what is not for the hospital and what the future holds so that we can plan accordingly,” Cunningham said. “Anytime the county expends funds, taxpayer dollars, we do so with agreements and/or planned purpose. That’s just being responsible and good fiduciary discipline.”