Melbourne-based mecwacare will take over the health service from November 1 and has confirmed that apart from the closure of the 10-bed hospital, it will retain all other existing BDHC services including residential aged care, a retirement village, a GP Super Clinic, allied health services, home care packages, district nursing, a gym and hydrotherapy pool, and an opportunity shop.

There are likely to be a small number of job losses with the hospital closure, but most of BDHC's 130 staff will be offered roles with mecwacare.

BDHC chief executive (interim) James McComb said the new operator would ensure ongoing care of residents and continuation of important health services for the growing Ballan community.

"All aged care residents are guaranteed their existing arrangements, with no cost increases, and all but a few staff members will transfer to mecwacare with their full entitlements," Mr McComb said.

"This is a big win for the local community, as we are a major employer in Ballan. We provide vital health and aged care services, and this agreement resolves years of financial uncertainty for the organisation."

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Moorabool mayor Tom Sullivan said the closure of the hospital would mark the "close of an era" for the town.

"It's disappointing. I think it's the close of an era, they've done a fantastic job as a bush nursing hospital," he said.

"It's important that Ballan is still serviced from a medical point of view and I think that's important as long as there's no diminishing of services and the aged care facility continues because it's likely that demand will increase as the town gets bigger."

Mr McComb said the small scale of BDHC operations and tough regulatory environment had made services financially unviable but a larger operator would have greater economies of scale.

The state government gave BDHC a $500,000 loan in 2018 after it recorded operating losses of more than $3.34 million over the preceding two financial years.

BDHC board chair Lyn Gunnell said the operation of a small, rural private hospital was no longer viable with many people dropping private health insurance, difficulties in achieving economies of scale, and easy access to hospitals in Ballarat and western Melbourne.

Construction of a new major hospital at Cobblebank, on the western outskirts of Melton, is scheduled to begin next year with the hospital operational in 2026.

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Ms Gunnell reassured aged care residents and families that little would change after mecwacare take over operations.

"It was important for us to find a new operator with the scale, experience and growth potential to provide long-term certainty for our residents and staff. In fact, residents should notice little or no change, and all residents are guaranteed continued care in line with their current arrangements," she said.

She said residents could remain living in their home, as current arrangements will stay the same, and there would be no additional costs as Commonwealth guidelines prevent any increases.

Mecwacare, a not-for-profit charitable organisation, provides residential, community and in-home nursing care and support services for around 17,000 people across Victoria, with their 2000 staff and 500 volunteers.

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