Case Study

QHR Case Study: Sierra Vista Hospital

Operations Excellence
Blurred image of hospital hallway

Truth or Consequences, New Mexico

The Challenge

Sierra Vista Hospital is a community-operated, 15-bed critical access hospital about two hours south of Albuquerque, NM. The hospital was facing sizeable financial, operational and leadership challenges:

  • Declining inpatient volume
  • 5 days cash on hand and cash exhausted in 90-120 days
  • Expense growth exceeded revenue growth by 244 percent
  • Negative annual EBITDA
  • $32 million in new debt and a new hospital building project under way with no ability to meet debt service payments
  • Debt covenant default
  • Disastrous IT system conversion
  • CEO and CFO termination

QHR Health Solutions

Over a two-year engagement, QHR Health implemented financial, operational, managerial, quality and patient experience improvements. We worked rapidly to implement a multidisciplinary approach to help strengthen Sierra Vista Hospital’s financial and operational capabilities. QHR Health’s activities included:

  • Successfully recruiting a new interim CEO and CFO,
  • Rightsizing the hospital’s workforce,
  • Enhancing the organization’s revenue cycle process post-EHR conversion,
  • Reviewing and resolving regulatory compliance protocols,
  • Providing guidance across case management, physician relations, managed care contracting and IT conversion activities,
  • Implementing a supply chain conversion,
  • Improving the hospital’s financial statement reporting and reimbursement modeling,
  • Negotiating suspension of debt service payments to allow for financial improvement impacts,
  • Reestablishing relationships with the New Mexico Legislative Finance Committee, and
  • Adjusting proposed new building project to affordable debt level.

Results

Audited results from fiscal year 2020 show the turnaround of Sierra Vista Hospital is working.

  • Negative annual EBITDA improved to a positive 10 percent or $2,665,163.
  • Days cash on hand has increased from five to 133.
  • Phase II of the new building opened in September 2020, completing the new hospital building project.

For more information, visit: https://qhr.com/solutions/hospital-management/