Llano County, hospital management separating amid money woes

Llano County and health care provider Mid Coast Health System are on the verge of a ‘mutual separation’ following a financially strenuous 2024 for Llano Hospital. Photo by Brittany Osbourn
Llano County and Mid Coast Health System are on the verge of a “mutual separation” for the contracted management of Llano Hospital due to the reportedly unsustainable financial situation of operating the facility under its current business model. County officials are determined to keep the hospital open and functional during the coming transition and beyond.
The impending separation was discussed during a special meeting of the Llano County Commissioners Court on Monday, Jan. 6. County Judge Ron Cunningham announced the county was in the midst of working with government consultants to find the best path forward to keep Llano Hospital operational in the absence of Mid Coast.
“We’re doing everything that we can to keep the hospital open,” Cunningham said during the meeting. “The hospital is open, the hospital has not closed; however, the hospital, like all rural hospitals, faces financial challenges.”
The county might continue operating the facility as an acute care hospital, which provides a broad range of services and is dependent upon reimbursements from the federal government for Medicaid patients. Or, it might pursue a Rural Emergency Hospital designation focused on 24-hour emergency care, which would open the door for federal grants and funding.
Llano County owns the hospital and contracts with Mid Coast Health System to operate the facility, which is also known as Mid Coast Medical Center-Central.
Mid Coast paid the county $150,000 a year to lease the hospital and manage it. The county and health system began working together in January 2021 after Baylor Scott & White ceased its management of Llano Hospital the previous December.
According to Mid Coast Health System CEO Brett Kirkham, operating Llano Hospital is no longer financially viable without significant contributions from local, state, or federal government.
“We’ve enjoyed our time (in Llano County), but the challenges facing that region, the state, and nation are just too much, and without local support of some kind, it is not sustainable,” he told DailyTrib.com.
Kirkham said Mid Coast saw a 50 percent drop in patients at the hospital between 2023 and 2024, and the health system reportedly subsidized the facility and three Mid Coast clinics in the area with $3 million in 2024.
Mid Coast furloughed 12 staff members from Llano Hospital this past December in an effort to reduce operating costs.
Llano County and Mid Coast have been discussing the hospital’s financial viability since at least June 2024, according to Kirkham, who said the county was notified that Mid Coast could no longer afford to operate the hospital without some sort of financial contributions.
According to Judge Cunningham, the county has been open to helping fund the hospital but wanted to see where that money would go before committing.
“We understand that there is money needed to go to the hospital—we get that—but my whole thing with Mid Coast is let’s come to an agreement with what the future of the hospital is,” he told DailyTrib.com.
Llano County held an emergency meeting in November to set aside potential funds for hospital operations and budget for attorney’s fees to negotiate with Mid Coast on keeping the hospital open.
Kirkham told DailyTrib.com that Mid Coast shared data and finances with the county, but communication between the organizations had hit a wall.
“We’re doing everything we can to keep the hospital open, but we have to have trust and we are at the point of mutual separation,” he said.
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With another BSW clinic in town did they not foresee the hospital would lose traffic when all the BSW plan folks moved over there? Hopefully the County can keep it open. Maybe switch to a fee-for-service model. With Medicare cutting payments that may be the only option.