Southwest Healthcare gives update on financial situation

CEO John Osse

They just needed time.

That’s what Southwest Healthcare’s interim CEO John Osse said to a crowd-filled sanctuary during the hospital’s public meeting at Bowman Lutheran Church.

Pioneer Editor

The facility had been granted funding from multiple entities to help them through a financial crisis while Osse and the board waited for the changes they had implemented to begin to show results.

“We needed to let the reduction and personnel costs take effect,” Osse said. “And we needed time to recruit physicians. Time was our enemy.”

Osse briefed the crowd on some of the changes they have made, which included the difficult task of staff reductions. Calling it an art and not a science, Osse assured people that it wasn’t done in haste, but the reductions had saved the facility $40,000 per month.

“That helps,” he said.

Osse, responding to a question about future layoffs, he didn’t rule anything completely out, did say that he doesn’t anticipate anymore.

The hospital has also recruited two physicians, Dr. Matthew Feller and Dr. Forrest Lanchbury, and are currently seeking a third doctor to join the staff. This has allowed Southwest Healthcare to severe the contract physicians, which was a significant factor in the financial strain on the facility.

Overall, Osse said the board had been able to reduce losses $225,000 from this time last year.

“So we’re seeing a trend,” he said. “Instead of expenses going up and losses increasing and revenue decreasing, [loss reduction] is what we want to see…it’s saying we’re already making good decisions.”

The board granted Bowman resident Debbie Patterson some time to talk to the crowd. She gave an impassioned speech on why she supports Southwest Healthcare and encouraged community support. She herself has got the ball rolling, giving $10,000 to start a sort-of community campaign. Her words must have resonated, because an anonymous donor gave a check before the gathering was even over.

Following Patterson’s presentation and a brief introduction, Osse presented the new interim CFO Karen O’neal to the crowd.

O’neal has over 20 years of experience and said to the crowd that she stands by her work honestly.

“When I present financial statements to the board of directors and to the CEO, they will be honestly and accurately presented to the best of my capabilities,” she said. “It is a pleasure to be here…”

She wished current CFO Sasha Ruggles well and looked forward to working with her when she returns.

Finally Osse and board president Gary Brennan opened the floor for questions.

One of the first questions was in regard to the old medical equipment on the old facility. According to one hospital employee, some of it has been sold and refurbished for countries in need of the equipment. For example, the previous CT scanner went to South America. But for remaining supplies—some non-medical equipment—a public auction is being considered.

The fate of the old building also has yet to be determined. The clinic was sold to a local dentist and is currently being renovated to meet their needs. But the hospital building’s problem is the asbestos, according to Brennan, the cost associated with removing that material is bringing the value down. One board member, however, pointed out that they are looking into various grant options that might assist them with cost of removing the asbestos.

The new building also came in over budget, and Brennan said that could be attributed the timing and the cost of construction throughout the region at the time.

The new building though does give the Southwest Healthcare added value because of Medicare reimbursement with the adjusted cost report.

They are also cleaning up some bad debt, like some of the $822,000 sitting in self-paying accounts greater than 181 days, according to O’neal. She said they planned to write off $270,000 in the month of August.

“[Southwest Healthcare] may take a hit in the month of August,” she said.

O’neal did say that the account receivable for Southwest Healthcare is one of the cleanest she had seen.

Osse said that a rural hospital system needs to stay lean, and compared it to a ship. It needs to stay trim, and into the wind.

“You don’t know what’s coming down the road next,” he said. “I’ve been doing this for over forty years and I know enough to know you can’t predict everything.”

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