May 24, 2019 CEO Update


On Wednesday, we had the opportunity to again present our Board another month of excellent financial results.  We were very busy during April.  All in all, it was one of the busiest months this organization has ever experienced resulting in record gross charges.  We held our costs down and a combination of higher revenue and lower costs is usually a very good combination as it was for SHS this month.

Overall, we continue to experience excellent cash collections which is reflective of our increasing revenue and also improvements that are being realized in our revenue cycle.  The Revenue Cycle group has addressed and continues to address a number of issues that affect not only the amount of dollars we collected but also the timeliness of those collections.  As we all have heard by now a major issue a year ago was the amount of cash we had on hand and the fact that our cash balance had fallen to a dangerous level.  The revenue cycle improvements above have assisted in providing a steady increase in our cash on hand.  We finished April with 46.51 days cash on had up from 15 days in April, 2018.  We continue to add about 2 days a month which puts us on target to exceed the established expectations of our lenders.  The chart below shows our days cash on hand progression.

As you can see, we are already exceeding our June 30, 2019 goal and are well on our way to exceeding our December 31, 2019 goal.

It is also important to note that concurrent with increasing cash we have also reduced our amount due to our suppliers, accounts payable, by over a 1.0 million during this same time.

On a year-to-date basis, we are now about $3.0 million ahead of prior year for Gross Patient Revenue and about $2.4 million ahead for Net Patient Revenue (the amount we expect to collect from our services).  In addition, our total expenses are down about $1.5 million including the additional expense related to the new construction.  When you exclude Interest and Depreciation related to the construction, total operating expenses are down nearly $2.8 million.

The combination of the increased revenue and reduced expenses has resulted in a substantial increase in our bottom line.  Our EBIDA, (Earning before Interest, Depreciation and Amortization) has increased from a negative ($2,044,582) to a positive $3,080,817 for an improvement of over $5.1 million year-to-date in 2019.  This represents an EBIDA margin of nearly 16% which is outstanding for a healthcare organization.  As I have said before, this has only been accomplished due to your hard work and effort to turn this organization around.  Thank you for all your hard work.



The closing date for the sale of the Market Street property has been pushed back to June 24, 2019.  However, we will continue on track with the movement of the traveling physicians that will be relocating from Market Street to the SHS hospital building, 2nd floor location. (The previous Medical/Surgical Wing).  This will affect Dr. Silva, Dr. McLaughlin, Dr. Mannas and Dr. Chaney-Roberts.  












As previously communicated, we have a few new medical providers that will be joining us in the near future:

  • Melissa Sims, NP has already joined us and is working in the SMG Clinic.
  • Susan Lanningham will be starting July 1 and will be located in the SMG Clinic.
  • Charlotte Barry will be starting this summer, we are hoping in July and will most likely be located in the Mancos Clinic.
  • We have a signed contract with Dr. Flemmings who will be joining our ER staff this summer.

Other upcoming SMG Practice changes:

  • Maria Cornelius will be stepping away from her clinic practice in Mancos this summer and will be working as a Hospitalist.
  • Dr. Daney will be moving from the SMG Clinic to the Mancos Clinic this summer.
  • Crysta Jones, NP will be transitioning from Mancos Clinic to the walk-in clinic this summer.

As we head into the Memorial Day holiday weekend, I want to wish everyone a safe and relaxing time.  Please take this time to remember the ones that are no longer with us, and those that have sacrificed all.



Overcoming Challenges in Rural Healthcare Today

In Colorado, the cost of health insurance is a very hot topic right now.  It has been determined that health insurance premiums on the Western Slope of Colorado are some of the highest in the country.  Colorado’s Governor, Jared Polis has pledged to address this issue and work to drive down healthcare cost to the residents of Colorado.

As CEO of Southwest Health System, this is a goal I fully support and is consistent with what we have been working toward as an organization.  Over the past year, we have looked at every department to see where we can become more efficient and provide the same or better quality of care to our patients and provide those services at costs that more closely match what we will be paid for those services.  My concern as a healthcare leader at Southwest Health System is that whatever decisions are made to address the rising costs of healthcare, fully considers the unique nature of providing services in a rural setting.

It is very challenging as a healthcare provider to successfully operate in today’s environment especially in a rural community.  We face the same challenges as large urban providers in keeping up with the demands caused by increased regulatory requirements, but must do so with considerably less resources.  In addition, the highly specialized nature of what we do as well as the smaller pool of individuals in rural areas to fill those specialties often requires recruiting these from outside the area or contracting for these services at a considerably higher cost.

We also have to balance the needs of our community with the resources available to provide for those needs. At SHS, we strive to provide the services locally the community wants and needs.  Below are a few examples of many services SHS provides that you may not typically see in a smaller community:

  • State-of-the-Art Radiology / Diagnostic Imaging offering services that meet or exceed those offered at larger surrounding facilities.
  • We are the only facility within 7 hours of Cortez, CO that provides Barrx™ Radio Frequency Ablation treatment for Barrett’s Esophagus, which can lead to esophageal cancer. Kevin Matteson is trained in RFA procedures at SHS.
  • SHS stands out as a Critical Access Hospital that offers full-service prenatal, obstetrics, L&D, post-partum, and family care, while 45% of rural US counties have no hospital obstetric services at all.
  • A retail pharmacy in our Medical Office building for convenient access to get your prescriptions filled while visiting your physician.

We have been fortunate as an organization to be able to provide the level of services we are providing to the community and will continue to do so.  We also pledge to continue our efforts to be a high quality, low cost provider so we are part of the solution to controlling rising healthcare costs.

Tony Sudduth, CPA, FACHE, FHFMA
Chief Executive Officer at Southwest Health System, Inc.


CEO Update – March 15th


The obvious highlight of this week was last night’s donor appreciation/ open house to celebrate the completion of the construction project. It turned out to be an excellent night with great attendance and gave us the opportunity to thank the people who were instrumental in bringing this to a successful completion.

This project places Southwest Health System in a position to continue to provide very high quality care in state-of-the-art facilities unsurpassed by any provider in the area. We now have the newest, nicest inpatient facility in the service area allowing for a very private, comfortable experience for our patients and families to go along with the excellent staff that provide that care. Our Medical Office Building allowed us to consolidate services for much improved coordination of services between primary care, specialists and our outpatient hospital services. And can you imagine the effect this winter would have had on our ambulance service had they had to continue to house our ambulances outside all the time.

The turnout for the event last night demonstrated just how important this organization is to the community. It took a considerable effort to unify the community to support this project but ultimately the support was overwhelming as evidenced by the multiple parties that played a part in providing the funding for the construction. Last night we had the opportunity to thank the contributors that included $20,000 raised through employee contributions, approximately $380,000 raised through the foundation and lets not forget the Tax Levy that was passed by the local tax payors. In addition, the support from all the local banks to form a syndicate of 1st Southwest Bank, FNB Durango, The Dolores State Bank, FNB of Cortez, Four Corners Community Bank and led by Vectra Bank/ZionsBankCorp to provide the Bond financing is another testament to the belief that this organization is critical to the community.

But perhaps the biggest positive last night was the mood of the people in attendance. It truly was a celebration and certainly signified just how far this organization had come in the last year to overcome our challenges and return Southwest Health into the leading provider of healthcare services in the four corners area. The delay of the event until last night was a deliberate choice. We made the decision last fall to make sure that when we did hold the event that it would be received an positive manner. The progress we have demonstrated the last several months gave us confidence that this was the time to move forward. Everyone at SHS can be proud of this accomplishment as it was truly the efforts of everyone at SHS that has moved us along to this point.

I would also like to thank everyone that played a role in making this event very successful. Bridgett Jabour and Chris Alvarez went above and beyond and did an excellent job of planning and organizing the event and coordinating the resources that were needed to pull this together. Also I would also like to thank all the people who volunteered to assist Bridgett and Chris in getting everything ready last night. The setting was beautiful and it was obvious everyone really enjoyed the event. I’d also like to thank Rob Dobry (member of SWMH Foundation and MCHD Board) who was instrumental in helping Chris and Bridgett coordinate the event as well as getting the donor wall completed with funds from SWMH Foundation. We also truly appreciate the Cortez Chamber of Commerce’s sponsorship of this event and thank them for their contribution to a very successful outcome. As they always do, our Food and Nutrition staff did a fabulous job with the food which again received great reviews from everyone in attendance. Thanks to all you for your outstanding efforts.


We continue on track with our Just Culture training in April and look forward to getting that program rolled out.

David Marx published a new article recently that I am attaching for your reading. The article is about an incident at Vanderbilt University and the subsequent Homicide Charge against the nurse involved in the incident. David approaches the article from a perspective of a Just Culture and how that could effect this event. I will discuss the article in more detail next week but wanted to give you the opportunity to read it beforehand.