Southwest Health Systems reports stronger operating margin, readies electronic records change; flags federal funding risk

Southwest Health Systems delivered a detailed operating update at a Montezuma County Board of County Commissioners workshop, with hospital representative Joe Thine reporting a return to a positive operating margin and plans to move the hospital and clinics to a single electronic health-record system.

Thine said the hospital finished last year with a positive operating margin and that year‑to‑date 2025 results are tracking roughly the same. "If we have a couple of months like we plan to between now and the end of the year, we'll finish with a higher operating margin than we did last year," he said.

Why it matters: The hospital serves a largely rural population and relies heavily on Medicaid-linked funding streams; changes to federal programs or state allocations could reduce reimbursements and increase uncompensated care, which would pressure the hospital's ability to invest in people and equipment.

Thine described the hospital's cash position: 114 days cash on hand reported for August, with roughly 87 days available after set‑aside amounts tied to bond debt and building‑related reserves. He said the hospital has reserved about $1,300,000 to cover the planned electronic health-record (EHR) transition that will move outpatient clinics onto the hospital's system. "We've reserved about $1,300,000 to work through that changeover," Thine said.

He cautioned that some of the apparent cash is being held for known liabilities or future obligations. "If we were to spend it all today in one fell swoop, what we would be left with is about 11 days of cash on hand above that 60," he said, adding the hospital is operating conservatively.

On workforce and services, Thine said nurse retention has been "north of 80%" over the last 12 months and overall employee retention has improved compared with a low point a few years ago. Diagnostic imaging and observation‑unit use are growing; cardiology diagnostics increased about 40% in the second quarter compared with the end of last year as a cardiology team from Montrose has provided regular clinics and testing locally.

The hospital has invested in new ultrasound and stress‑test equipment and has been strengthening a clinical partnership with Mercy (Durango) so more oncology patients receive infusions locally. Thine said that, since the Mercy clinicians reviewed the local infusion center earlier this year, the number of patients referred for chemotherapy infusions in Cortez has increased, reducing patient travel to Durango.

Looking ahead, Thine said a CT scanner will need replacement in the next few years and staff are planning diagnostic‑imaging space staging so future equipment upgrades can be done with minimal disruption. He also raised policy risks: if Congress does not extend enhanced premium tax credits under the Affordable Care Act, premiums for individual coverage could rise and fewer people may have commercial insurance; separately, changes to Medicaid later in the decade could alter enrollment and reimbursement.

Thine emphasized continuity of care for uninsured patients: "We're going to take care of anyone, whether they are insured, don't have insurance, whether it's Medicaid, Medicare. So people should still come and seek care. We have a financial assistance program for the hospital," he said.

Ending: Thine closed by stressing collaborative planning with district and foundation partners and invited questions from commissioners.