Coffee Health System to End Labor-and-Delivery Services; Seeks Increased County Support

Stacy Auguste, hospital administrator for Coffee Health System, told Coffey County commissioners the hospital will discontinue its labor-and-delivery service line effective June 30, 2025.

August said low delivery volume—about 50 deliveries per year—and an annual loss of roughly $1.3 million made the service unsustainable. She said staffing and maintaining competency with such low volumes were additional drivers of the closure decision.

Auguste said prenatal and postpartum services will continue at Coffee Health System. The hospital has agreements with regional delivery facilities to take deliveries; those facilities will refer patients back to Coffee Health for postpartum and newborn care. Auguste also said prenatal care will remain available locally and the hospital will provide breastfeeding support and immunizations in collaboration with the health department.

On finances, the hospital presented the systemwide 2025 budget and the drivers behind a request for increased county support. For the full hospital system Auguste said total expenditures for 2025 are about $27.8 million and the hospital is seeking additional county assistance to cover a projected $1,071,530 variance. The presentation frames a county assistance request totaling $3,000,111.25 across ambulance and hospital requests, based on the current 2025 budget.

Auguste listed steps the hospital is taking to improve its financial position, including reducing contract labor, reviewing positions for consolidation, negotiating payer contracts, improving collections and prior-authorization processes, expanding high-reimbursement service lines such as swing-bed services and surgical services, and exploring shared-service arrangements with larger systems. She said ambulance fleet replacement remains a capital priority (an ambulance cost projection of about $320,000 with a 36-month delivery lead time was shown), and identified other near-term capital needs including a large hot-water heater and a sewer line replacement under the hospital.

Commissioners asked whether the closure will affect grants that explicitly require an onsite delivery unit; Auguste said the hospital will no longer be eligible for labor-and-delivery–specific grants but she was not aware of other grants that would be affected. Commissioners also questioned staff retention; Auguste said most OB nurses were offered other positions within the organization and she expected to retain most of them.

Auguste told commissioners that closing the labor-and-delivery line will improve cash flow for debt service by roughly $600,000 and argued the change is necessary to avoid defaulting on loans in 2025 if no changes were made.

The presentation included staffing, contract-labor reductions already achieved (about $200,000 saved through not backfilling positions and additional savings from contract terminations and consolidation), and revenue initiatives such as growing orthopedic and MRI referrals and expanding the swing-bed program.

Commissioners did not take a formal vote on the budget presentation during the meeting; the hospital packet served as the formal request documentation. No specific county funding appropriation was adopted during this session.

Auguste closed by thanking the commission for prior support (HDAC unit and lab equipment) and said the hospital will return with any formal follow-up or additional requests as needed.