When a public or private corporation or institution fails, and the board of directors points its finger of blame at the CEO for the failure, three fingers are pointing back at the board. The situation at Southwest Health System (“Southwest Health System lays off 9.5 percent of staff,” Journal, Aug. 14) regarding the reduction of 40 employees should be laid squarely at the feet of the SHS board of directors, which did not do its job.
The role of the board is to create a strategic plan that foresees growth in facilities, personnel, services and finances that the CEO, as head of operations, is tasked with implementing.
As the operational board of the health system, SHS is tasked with ensuring that the CEO is properly implementing the approved strategic plan within its financial parameters.
At the very least, at its monthly meeting, the SHS board should review its financial situation as well as the implementation of its strategic plan. The board’s objective is to provide and maintain health care for the community and surrounding areas while maintaining a healthy financial position.
It should not have taken three years and a shortfall of $10 million for the SHS board to determine that the system was in trouble. Instead, in my opinion, the board was more concerned with staying in power and meddling in the day-to-day operations of the health system than in fulfilling its fiduciary responsibility.
Community Hospital Consulting, the Texas-based management company that was hired after CEO Kent Rogers was terminated, will be unable to make the changes necessary to get SHS back on its feet because it reports to the very board that got SHS in trouble in the first place. This is why I state that the SHS board must go. It is a self-elected, self-perpetuating board that is well-known for forcing out members who represent diversity.
The entity that can and should hold SHS accountable is the Montezuma County Hospital District, which is the landlord for SHS and the entity to which SHS reports.
In the governing agreement between MCHD and SHS, MCHD can terminate the contract with SHS by giving it 60 days written notice of the areas in which it is noncompliant. MCHD should do this immediately.
The Montezuma County Board of County Commissioners oversees MCHD and should have been aware of these financial deficiencies if it was getting the quarterly reports it requires.
Cutting expenses is only one side of the financial coin. Increasing revenues is the other side, and I wonder if all of the physicians that SHS has employed over the last decade are reaching their productivity levels and paying for themselves. Providers bring in revenue, but from my experience, when providers are employed and have their salaries, vacations, a yearly educational stipend, insurance, staff, supplies and rent paid by someone else, they may not be as motivated to be income producers as when they were on their own and had to work to cover all of these expenses themselves.
Laying off 40 employees is akin to rearranging the deck chairs on the Titanic. Let’s recognize the iceberg for what it is – the SHS board of directors – and stop the community’s health system from being irreparably sunk.