Southwest Memorial Hospital is on the financial rebound, management officials announced Thursday.

In the last two years, the 61-bed community hospital has seen its fiscal health stabilize, has completed an expanded emergency room, and has harnessed more control of millions of dollars’ worth of uncollected bills.

CEO Bob Peterson told the Southwest Health System board that while real challenges — such as physician recruitment and remodeling needs — still lie ahead, the overall picture looks good, a situation that has led to improved morale.

"When I first came here the board was new and we were charged with working on a good relationship with the district board, the community and the physicians," said Peterson.

"I think we have made progress. Lately we have switched focus to short-term facilities planning."

John Short, a representative with Quorum Health Resources, Southwest’s health management contractor, gave a summary of improvements made during 2000.

Employee benefits were re-instated, and raises were awarded. The SHS board authorized a 2 percent increase in salaries last year, and in January re-established a 2 percent hospital contribution to employee pension plans.

Also, turnover rates have markedly declined, falling from 15 percent in 1999 to under 10 percent in 2000, a figure below the industry standard of 19 percent.

In the last year, the board turned to physical improvements and staffing, Peterson explained.

A new computer system was installed, equipment was replaced or upgraded in radiology, and the parking lot was re-paved. According to reports, SHS purchased a magnetic tesonance imaging unit (MRI) for $1 million, saving $142,000 per year on previous lease payments.

A $1.3 million ER expansion and physical plant upgrade also came on line, and stayed within budget. And initial plans have been laid out to expand outpatient services, expand the radiology department and relocate non-medical services into the Vista Grande Nursing Home building. The latter is pending a lease negotiation with Vista Grande management that if successful would put a new nursing-home facility on the Southwest campus.

Two new doctors plan to come on board. Dr. Carolyn Johnson, a family-practice physician, will begin taking patients in the Cortez area in April. And Dr. Tracy Lippard, an internist, has announced her plans to move to and begin practice in the Cortez area mid-summer.

Peterson said the hospital is still seeking to recruit another general surgeon. Two recently declined offers, and one candidate will be visiting the area in April. The relief would boost Southwest back to a Level III trauma center, a designation iy lost last year due to a lack of surgeons available for covering shifts around the clock. As a result, the hospital occasionally goes on surgery divert when staff is short, meaning patient revenue is lost to nearby hospitals.

Financially, the hospital is back in the black, bringing in a profit for fiscal year 2000 of $561,000, according to the annual report. For February, profits hit nearly $50,000. Year-to-date profits are at $85,000. Total expenses, excluding bad debt, dropped by $32,000 from 1998 to $19.8 million.

Accounts receivable were reduced by $611,000 last year, pushing up cash reserves to $3.5 million at the end of last year. Since then the amount has increased to over $4 million. "Days cash on hand," a measurement of hospital viability, rose from 56 days in 1999 to 76 days by February 2001.

"That is a very big improvement when compared to low it had been in the past few years," observed SHS board member Roy Henneman.

A program targeting patients who are eligible for government assistance brought uncompensated care in 2000 down to $782,241, a drop of 2 percent from 1999.

As part of their lease with the Montezuma County Hospital District, SHS is required to maintain certain financial ratios. The performance standards are being met, when compared with hospitals of similar size and scope.