Turbulence and even controversy are nothing new for Southwest Memorial Hospital in Cortez. Small rural hospitals historically have struggled to keep revenues flowing in and remain competitive in the cut-throat world of health care, and SWMH is no exception.
The private, not-for-profit corporation that operates the hospital, Southwest Health System, was given control of the operation in 1996 only after a protracted struggle with the Montezuma County commissioners. When the taxpayer-funded Montezuma County Hospital District, which had been running the hospital, proposed the privatization, the county commissioners and a number of citizens were skeptical. Among other things, they worried about possible conflicts between a public special district and a private corporation, what would happen if the corporation went bankrupt, and whether the hospital would be “over-governed,” with both an MCHD and SHS board.
The commissioners insisted they had the authority to approve or disapprove the restructuring because state law required special districts to get county approval for “material modifications” to their original service plans. Counsel for the hospital district argued that the restructuring was not a material modification, but ultimately the district agreed to work with the commissioners on the terms of a 50-year lease with SHS and the operating bylaws.
Among those terms was a provision in the lease requiring SHS to report its financial status quarterly, and prescribing actions to be taken if financial ratios fell below certain levels. Hospital and SHS officials still give an update to the county commissioners quarterly.
In 1998, the hospital was in the headlines again. A furor erupted over the district’s plans to sell $9.6 million in bonds to build a medical office building. The county commissioners went to court seeking a preliminary injunction to stop the sale, but their motion was denied.
But in May 1998, an election to fill five seats on the hospital-district board drew nearly 2,000 voters to the polls, a huge number for a special-district election. Four of the five winning candidates were opposed to the bond sale and office building, and it fell through.
In 1999, after learning that 31 fulltime positions might soon be cut at the hospital, the county commissioners called for SHS to be dissolved, saying it had precipitated a “downward spiral” for the facility.
The commissioners questioned a plan at that time for a $1 million emergency- room expansion, saying the cuts might leave the hospital short of staff to operate the ER.
But SHS was not dissolved and continues operating the hospital today. And the $32 million expansion project recently completed on the hospital campus included a medical office building.
