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Southwest Health System warns HR1 could cut millions; outlines telemedicine, oncology and equipment upgrades
Summary
Southwest Health System told Montezuma County commissioners that early‑year patient volume drops generated a roughly $1 million operating loss in Jan–Feb 2026, and an advisory analysis projects up to $9.6 million in annual losses by 2033 from federal HR1 changes unless the hospital grows revenue or reduces costs.
Southwest Health System (SHS) briefed the Montezuma County Board of County Commissioners on March 31, reporting recent volume declines, ongoing investments and a long‑term projection tied to federal HR1 funding changes.
Mr. Thine, presenting for SHS, said the system finished 2024 with about $1.7 million in operating income and had planned a $0.5 million operating gain for 2026. However, SHS experienced approximately a $1 million operating loss in January–February because rural critical access hospitals statewide were averaging about 12% lower volume than the prior year.
"The total is a 9.6 million loss in operating income annually by 2033 if nothing were to change," Mr. Thine said, describing an advisory board projection of the cumulative effect of HR1 on SHS operations (the projection excludes potential separate state Medicaid payment cuts).
SHS is pursuing several mitigation strategies: recruiting primary care physicians (which has increased patient attribution compared with two years ago), expanding the Mancos clinic to Fridays including prenatal care, standing up 24/7 in‑house physician coverage and launching teleconsults in infectious disease and pulmonary care (with tele‑cardiology planned later this year). SHS also reported oncology infusion visits rose from 99 patients in 2024 to 133 in 2025, reducing travel for regional patients.
On finances and capital, SHS said it finished a month with about 109 days of cash on hand but most funds are reserved or committed; roughly six days of cash (~$1.2 million) remained unallocated. The system has secured congressional directed spending and DOLA grants to replace CT and other imaging equipment and to install on‑site energy storage to lower demand costs.
Commissioners thanked SHS staff for grant work and for partnering on a local health fair. Mr. Thine said the board and medical staff are evaluating where the system can grow revenue‑positive services to offset expected funding pressures and that the hospital will continue to monitor volumes closely.
SHS will report back to the board as new financial projections or mitigation plans are developed.
