When a hosta, daylily, ornamental grass, or any perennial for that matter, gets old it just means the crown (where the leaves attach to the roots) is getting bigger in diameter. This would be fine if “this” didn’t happen; the center of the plant “root bounds” itself and dies, causing the plant to “doughnut”.
The plant is very alive all around the outside, only the center is dead. The original root mass got so thick that it choked itself to death.
This too would be OK, but what typically happens is the ring grows out unevenly, one side is usually thinker than another, and it can look bad. Granted, eventually this center root mass will decay and turn into humus soil capable of sustaining an invasion inward of the plant’s outer ring roots again. But it will take a long time.
Solution: (Pre-doughnut problem): In the fall or spring pierce a spade through the crown of a plant, that is a foot in diameter, and pop it out. This can be planted somewhere else on the property, or given to someone. Fill in the hole left with soil.
(Post- doughnut problem): Dig out the ring in sections, saving the healthiest one to plant where the ring was. Dig out the center dead root mass and pitch. The other ring sections can be planted elsewhere or given away.