CEO End of Year Review

For Southwest Health, 2019 was a year of complete contrast to 2018, from a year of change and chaos, to a year of stabilization. During 2019 we focused on, with considerable success, stabilizing operations, finances and also leadership.
I ended the 2018 year in review with the following:
“2019 will be challenging as our goals are for continued and significant improvement over 2018 but I have no doubt we will do it; we have proven our capabilities already.
I am looking forward to my “2019 Year in Review report” having some of the following….continued financial stabilization and growth, fine-tuning quality improvement processes, implementing efficiencies allowing easier access to our clinicians, communicating openly and often with the community to build strong relationships of trust which only enhances our value to this community and fulfills our mission: to provide the highest quality health care to our community by bringing excellence and service together to promote, improve and restore health.”
I am pleased to report we very much hit the mark on these goals completing a turn-around that is nothing short of remarkable.
On the financial side, we put together a very aggressive budget for 2019 and knew from the beginning it was going to be challenging. The positive strides that have been made have been extraordinary and we have shown tremendous progress during the year. A few of the highlights are as follows:
• Earnings Before Interest, Depreciation and Amortization (EBIDA) in excess of $6,000,000 for 2019 which represents over $9,000,000 in improvement. (This is the industry measure for how much cash, operations produce during the year.)
• Improvement in Days Cash on Hand to approximately 49, which is well ahead of the on-going requirements set by our lenders in our forbearance agreement.
• Full compliance with the Debt Service and Capitalization requirements of the forbearance agreement.
• Reduction in our Accounts Payable to below-expected levels.
• As a result of the above, our lenders have upgraded our debt rating twice in the past 6 months.
• Reduction in our Net Accounts Receivable to below 43 days.
The above was made possible by improved focus on efficiency and productivity and a substantial improvement in net revenue. We expect year-end Net Patient Revenue to improve by over $4.4 Million driven by increased volumes and improved billing and collections processes. At the same time, we saw enhanced expense management leading to improvement in several indicators including Salary, Wages and Benefits (SWB) as a percent of Net Revenue and Supply Expense as a percent of Net Revenue.
Earlier this year, Community Hospital Corporation (CHC) published a whitepaper on the success of the turn-around at SHS and is currently featuring SHS in a current advertising campaign for CHC.
But the improvements have not just been financial, in 2019 we continued our emphasis on quality and experienced very positive results including the following:
• Our Hospital Compare Rating improved from a 3-star to a 4-star recognizing improved quality and patient satisfaction scores.
• In November, DNV completed our annual certification survey with much improved results over prior years.
• Our Level IV Trauma certification was approved for 3 additional years.
• We reimplemented our Fall Prevention program which has decreased falls by 50%.
• Enhanced HCAHPS (a standardized survey and data collection methodology utilized by CMS to measure patients’ perspectives of hospital care) and patient experience surveys in 4th quarter to include real-time surveys for our clinics, surgeries, and Emergency Department.
• The implementation of the Colorado Hospital Transformation Program which utilizes significant community engagement.
• Resuscitation Quality Improvement Program (RQI) was implemented in 4th quarter. This program is a quarterly way to validate the skills of the staff who are providing CPR within the organization.
• The Lab, Emergency Department and Radiology worked together to decrease turnaround times for troponins (treatment) for AMI (heart attack) patients and CT (for stroke patients.
In addition, we continued to look for ways to better take care of our patients and made several improvements in this area:
• Physical Therapy was able to purchase a reformer for patients who are unable to do exercises on the floor and also a set of stairs to assist in learning how to use the stairs after an accident or surgery.
• Sleep Lab started a Home Sleep Testing Program and have seen an increase in studies.
• Cardiopulmonary has 2 new BiPap and 2 new CPAP machines. These machines provide breathing support for patients who have respiratory needs.
• ICU staff are now trained on inserting Mid-Line Catheters. This allows for patients to have one insertion for up to 29 days of IV therapy.
• Family Birthing is implementing the “Baby Box” Program through the Colorado Regional Accountability Entity.
• Family Birthing has ordered and will be implementing Nitrous Oxide as an option for pain control for their laboring moms.
• Pharmacy added a pharmacy tech to assist the physician with medication review to avoid drug interactions. This has been a successful program with up to 87% of the patients admitted being seen by the tech who have found 16 errors listed within their current medication list and has increased the patients requesting pharmacy counseling to a total of 15 patients last quarter.
In 2019, we worked to improve access and made progress in this area during the year. In July, Dr. Susan Laningham, an Internal Medicine physician joined our clinic team here in Cortez. In September, Dr. Charlotte Barry, another Internal Medicine physician, also joined SMG and is located at the Mancos Clinic. In addition, Melissa Sims, Nurse Practitioner, joined our SMG team in May and is located in the SMG offices in Cortez. These were outstanding additions to our medical staff giving us an expanded capacity to address the healthcare needs of our community.


During 2019, we continued our policy of open communication at all levels. Though attendance has decreased, we continue to and will continue to hold regular open public forums. We continue to see input by the public as critical in defining where we need to go as an organization.
Internally, we have been holding monthly CEO forums with the staff. We had to make a few adjustments though the year, but have landed on a platform that seems to be producing good attendance and questions. We also implemented a mechanism for staff to ask questions anonymously to stimulate additional questions from those who were not comfortable asking in public. We will continue this process during 2020 as this also is a key mechanism to get input on areas we need to focus.


As part of communication focus, we completed employee engagement surveys in April of 2019, our expectations of these surveys were to develop a baseline to measure future improvements. We did not expect results to be great considering what the organization had been though and we were right. It fully supported our expectation that we had a lot to work to do in this area. As a result, we met with every department and asked the staff what they saw as the priority items to be focused on to help engagement in that department. From that, a plan of action was developed and we continue to follow-up on the progress. In October, we completed a mini mid-term employee engagement survey and I am pleased to report that though still not where we want them to be, every question saw a level of improvement over the initial survey. We will complete another full-survey in 2020.
As previously mentioned, there was also an emphasis on stabilizing leadership. Following the appointment of Karen Labonte as permanent CNO late last year, I was named as permanent CEO in March 2019. In August, we appointed Jeremy Adair as Chief Compliance Officer and in October, Rick Shrader was named permanent CFO for SHS. Starting January 6th, Kerri White-Singleton will fill our remaining open senior leadership position as Chief Operating Officer of Southwest Medical Group. That rounds out the complete Senior Leadership Team and achieves our goal of stabilizing our team.

As we look toward 2020, our opportunity is clear. A recent study has confirmed that 60% of the services provided to residents in our service area are provided by providers other than SHS. As such this reduction of out-migration will be a major focus for us in 2020. We know we must address our access issues and we will continue to do that. We are targeting recruitment of an additional General Surgeon and an additional Orthopedic Surgeon, which when placed, would provide for 24/7 call coverage for these 2 areas. We are also targeting an additional OB/Gyn to allow for continued expansion of our Women’s Health program. In addition, we will also look for ways to improve the access for Family Practice patients, both through improving through-put with our current physicians and additional recruitment of providers.
We also fully recognize we have opportunities to improve our image in the community. We know we have history to overcome in order to fully rebuild the trust of our community, but I know the services we provide are second to none and that’s the message we must deliver. In 2020, we will be implementing a formal patient experience program with the goal that we will accept nothing less than every patient that has an encounter with SHS, leaves feeling they have had the best experience possible. The following quote is included at the bottom of every email I send out:
Maya Angelou – “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
When we fully understand and embrace this concept, we will become the provider of choice for this area.
Everything we have accomplished and everything we will accomplish is a direct result of the efforts of the best staff I have ever worked with. We asked a lot of our staff during 2018 and 2019. We decreased staff, we froze wages and we adjusted benefits – all unfortunately necessary to address our financial issues. Our staff stuck with us, supported the changes and supported the organization. We promised from the beginning that the efforts of the people who stood by us would be recognized. As a result, we have now re-implemented our annual merit increase program, will be granting cost of living increases in 2020 and have recently completed a salary survey of the healthcare market and adjusted our pay scales as necessary to keep us competitive with the market. We continue to ask a lot of our staff; we have to continually find ways to become more productive and efficient. As an organization, are committed to making sure that we employ the right number of staff and compensate them in-line with the market.
With all we accomplished, I know for certain it is way too early to declare victory. Healthcare is a challenging business and a lot that makes it challenging is beyond our control. On a national level, the future of healthcare and how it is delivered can be drastically affected by the next round of elections. The State of Colorado has many initiatives in-process that could totally change how we get reimbursed for the services we provide. While we can advocate for what is best for us and other rural providers, ultimately, we don’t make those decisions.
What we can do and will do is to continue what we have been doing: make the changes that improve the quality of care we provide, provide those services in the most efficient way possible and focus on making our patients feel that we have provided the best care possible. If we accomplish that, Southwest Health System will not only survive but thrive in the future.
I once again look forward to the 2020 year in review and have no doubt it will continue to be a positive step forward.
Thanks to our providers and our staff for making this a truly great healthcare system and to our community for giving us your support.

Merry Christmas and Happy New Year,

Tony Sudduth, CEO