LMH Health reports deep quarterly loss, launches clinic turnaround effort

LMH Health’s latest numbers showed a hospital system under pressure at the very place Douglas County residents feel it most, the clinics. The county’s only local hospital reported a first-quarter 2026 operating loss of about $3.1 million, far worse than the $322,649 deficit it had budgeted, and clinic operations alone lost about $4.8 million in March.

That gap matters because the clinic side is not just a sideline. Finance Committee minutes said clinic enterprise performance accounted for 75% of the negative budget performance, underscoring how much of LMH’s shortfall came from the network used for primary care, specialty access and follow-up visits close to home. During the April 29 board meeting, board chair Beth Llewellyn said LMH’s expanded clinical reach in recent years had come with costs that are “not sustainable” in its current form.

Chief financial officer Rob Chestnut said the hospital had already formed a steering committee with dozens of staff members from across departments to attack the problem. He said LMH was working on roughly 20 to 25 separate initiatives, including a push to cut high no-show rates that leave doctors and staff scheduled but unpaid. Contract labor remains another strain. LMH budgeted about $2.3 million for contract labor in the quarter, but actual costs came in at about $3.6 million, 58.3% over budget, reflecting the continuing squeeze from regional and national nursing shortages.

The turnaround effort lands about six months into CEO Shelly Kortkamp’s tenure, and clinic performance has become a central focus. For patients, the stakes go beyond the boardroom. When clinic finances weaken, the pressure can show up as longer waits, staffing instability and slower expansion of services that keep care local in Lawrence and across Douglas County. LMH says it receives no tax support from the city of Lawrence or Douglas County, so operating losses can quickly affect hiring, service planning and long-term investment.

The financial strain also follows a period of expansion. In February 2023, LMH approved a strategic clinical relationship with The University of Kansas Health System to expand specialty care in and around Douglas County while preserving LMH’s independent ownership and governance. Its 2023 annual report said the system had rebranded its primary care clinics under the LMH Health name and expected the Cancer Center expansion to be finished in fall 2025.

LMH has already weathered a rough stretch before. In January 2024, leaders said the hospital’s final 2023 operating loss was $5.6 million. In March 2025, trustees approved $20 million in bonds for long-term facilities goals, including the cardiac catheterization laboratory, completion of the cancer center and the heart center. Against that backdrop, the first-quarter 2026 shortfall made clear that the test now is whether LMH can turn clinic volume, staffing costs and missed appointments into measurable improvement before those losses start reshaping care access in Douglas County.