Southwest Health System’s financial picture for 2025 was much stronger than just a few years ago.
After reporting operating losses from 2021 through 2023, the Cortez-based health care system that operates Southwest Memorial Hospital and a network of specialty and primary care clinics has rebounded. Projected annual profits are roughly $1.5 million for each of the past two years.
CEO Joe Theine cited expanded care, improved staffing and retention and growth in critical services such as chemotherapy as key factors in the turnaround.
Despite the gains, Southwest Health System is preparing for what leaders describe as an uncertain future.
Federal changes tied to House Resolution 1 could cut nearly $10 million annually from the hospital’s bottom line, Theine said Monday during an update to the Montezuma County Board of Commissioners.
“The total is a $9.6 million loss in operating income annually by 2033 if nothing were to change from the federal funding picture,” Theine said.
Theine did not identify specific programs tied to the potential cuts, but pointed to reduced federal support for Medicaid and Medicare, along with rising operating costs. He said the estimate does not account for possible state-level reductions, which could further deepen the impact.
“That would leave us with about an $8.2 million operating loss annually, which is something we can’t sustain,” Theine said.
The projections were developed with help from the Advisory Board, a national health care consulting firm. Theine said hospital leaders and board members are now examining whether additional services could be expanded in areas where revenue exceeds costs.
He said the hospital expects to provide further updates later this year and in the years ahead.
Alongside the long-term outlook, Theine outlined recent financial challenges. He said many of the hospital’s costs remain fixed, while revenue fluctuates with patient volume.
Despite posting about $1.4 million in profits the previous year, the hospital lost approximately $1 million in January and February 2026 because of low patient volumes.
“We got really nervous at the end of January and the first weeks into February,” Theine said.
He added that data showed rural hospitals nationwide experienced similar slowdowns during the first two months of the year, but that level of loss was not sustainable.
The update also highlighted operational improvements. Theine said the system has maintained staffing levels across the board, with overall employee retention at about 70%. Primary care access has also expanded.
Emergency room door-to-physician wait times now average under 10 minutes. The hospital recently added 24-hour, in-house physicians, along with new inpatient telehealth consultations for infectious disease and pulmonary medicine.
Southwest Health System and the Montezuma County Public Health Department will jointly host a community health fair from 8 a.m. to noon April 18 at the Montezuma County Annex, 107 N. Chestnut St.
The fair will offer low-cost testing and access to basic health information, including education stations focused on wellness and mental health, physical activity, nutrition and diabetes management. Southwest Health System will provide laboratory services, while the health department will handle logistics and follow-up for critical lab results.
awatson@the-journal.com
