A recent blog post by Community Hospital Corporation (CHC) details the situation that caused Southwest Health System to reach out to CHC for asistance in early 2018, the plan they created to turn around the hospital, and the final results to date.
Editor's Note: This article originally appeared on Community Hospital Corporation's website.
The Situation
When the Southwest Health System (SHS), in Cortez, Colorado, contacted Community Hospital Corporation (CHC) early in 2018, the hospital had violated various bond covenants associated with its $30 million expansion and renovation project. In fact, the organization had failed to meet the 80 days-cash-on-hand requirements for four consecutive quarters. This violation triggered technical default, which could have led to hospital bankruptcy
and closure.
Lenders concerned with the financial situation communicated with the board directly and required an outside consulting firm to evaluate the situation and develop a plan of action.
Although the situation at SHS was dire, it is not uncommon. Community hospitals across the country are facing serious financial distress. As of May 2019, the North Carolina Rural Health Research Program reported 106 rural hospitals have closed since 2010. Click here to continue>>
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