A financially-troubled Mississippi hospital announced Friday that negotiations with a medical campus planning to take over the hospital had collapsed.

Just hours after revealing its plan to lay off up to 80 employees, the Greenwood Leflore Hospital said that the University of Mississippi Medical Center was no longer interested in completing a deal to take over the hospital. The breakdown in talks increases the risk of the hospital’s closure and threatens to decrease health care access in the state’s impoverished delta region.

The hospital had been scrambling to cut costs in an effort to satisfy UMMC, a medical center located in Mississippi’s capital city of Jackson.

“Although we certainly can understand and appreciate the challenge of providing healthcare services in the post-pandemic era, this decision was not expected based on the progress that had been made regarding a lease transaction,” reads a statement released by a hospital spokesperson. “The financial realities of providing healthcare services are impacting both organizations.”

Local officials attempted to revive negotiations last week when Greenwood and Leflore County agreed to split the estimated $9 million UMMC requested to cover deferred maintenance at the hospital and its outstanding loan from the federal Medicare program. But the hospital did not have the cash to cover those obligations, the Greenwood Commonwealth reported.

The hospital had attempted to ease financial pressures by closing various units, including its labor and delivery unit. The move limited access to maternal care for women in the surrounding areas. But the last-ditch efforts to save the deal didn’t satisfy UMMC.

“Despite the best efforts of all parties involved, it has become clear to us that an agreement between the University of Mississippi Medical Center and Greenwood Leflore Hospital will not be possible,” said Dr. Alan Jones, associate vice chancellor for clinical affairs at UMMC. “We determined an agreement is not possible due to several factors, the most significant being the current realities of health care economics that all health systems are facing in this challenging environment.”

In September, UMMC completed a transaction with Greenwood Leflore to take over two outpatient clinics previously operated by the hospital. The hospital said in its statement that it would evaluate options for continuing services.