A “stark reality” is forcing the Hoskinson family to dial back expenses at their newly built health clinic in Gillette. That’s led to a second round of layoffs, this time at the clinic, of 40 people.
That follows a layoff late last year of 136 people from a construction company the Hoskinsons had formed to try and keep costs down for their building projects.
“Here is the stark reality,” clinic co-founder William Hoskinson wrote in social media post on the Hoskinson Health & Wellness Clinic’s Facebook Page explaining the latest layoffs. “My brother has spent nearly $250 million on infrastructure, salaries and investment in this community. He has received not a single penny of reimbursement for that investment.”
Four years later, Hoskinson said it’s time to better align the clinic with its available revenue.
That means cutting unprofitable services from the clinic, Hoskinson Government and Policy Center Communications Director Leo Wolfson told Cowboy State Daily.
“The business is trying to do things a little bit differently so they can continue offering quality health care long into the future,” Wolfson said. “It’s just kind of a refocusing, and, once again, just prioritization of the kind of things the clinic can do to be most successful.”
The cuts don’t necessarily mean those particular health services won’t be offered at the clinic at all, he added.
“There might be departments that take on old departments,” he said. “Things might get kind of combined together.”
Other efficiencies will also be sought — streamlining processes, eliminating redundancies and unnecessary costs — to align expenses with revenues and a more sustainable path going forward.
“We have an obligation to the 18,000 patients who rely on us to make this organization sustainable,” Hoskinson said in his Facebook post. “We cannot continue to burn cash at the rate we were. We must optimize our workforce and refine our processes.”
Mistakes Were Made
In his Facebook post, Hoskinson said the family isn’t blaming anyone else for the clinic’s predicament.
“The blame for growing too fast falls on the Hoskinson family,” he said. "We moved too quickly because we wanted to say ‘yes’ to every request for help.”
That was fueled in part by the enthusiastic response of the community, a response the family wanted to serve.
“Patients wanted more access, more specialists, and more services,” Hoskinson said. "In an attempt to fill the needs you asked us to fill, we grew at a frantic pace. We hired rapidly. We rented more space. We pushed construction schedules to the limit.”
Demand continued to outpace infrastructure and construction schedules, and that’s part of what led the family to begin their own construction company, hoping it would streamline the process and create cost efficiencies.
“The reality is, the construction company was never profitable,” Hoskinson said. “It became a massive cost center that diverted our attention away from managing the clinic. At its peak we were paying $23 million a year in salaries alone — an unsustainable number.”
In all, Hoskinson said $60 million was spent on equipment, salaries, and tools for the company.
“We also made real estate purchases with good intentions that didn’t pan out,” he added. “We bought the Circle L and Arrowhead Motels hoping to provide housing for new employees.”
But after beginning the renovation, it was learned that the buildings had substantially more problems than expected.
“They were in terrible shape — unsafe and unethical to house people in,” he said. “We tore down the Circle L and have since used the lot for community events, like the Fourth of July celebration, and donated it for the Boy Scouts’ Christmas tree lot.”
Similarly, the Little Store was purchased with the intention of keeping that running. The existing tenant was offered the same rent price to stay, with fixes at no additional cost.
“We tried to hire a manager to renovate it, but once we gutted the interior, we found it was structurally dilapidated and unsafe,” Hoskinson said. “We made the tough decision to tear it down, intending to build a gas station/convenience store, but our resources had to be prioritized for the clinic expansion.”
The property is being rented to a local coffee shop now, Hoskinson added, a business that is so far doing “very well.”
Big Goals
The Hoskinson Clinic in Gillette brought an unusual array of medical devices to a relatively small community in a rural state.
Things like the Vector, a device with 95 cameras that scans a patient’s skin looking for anything unusual. The Mayo Clinic has the first device of that caliber in the United States, and the Hoskinson Clinic took the second.
The Hoskinsons brought the device to Gillette because they wanted to save lives Cowboy State Daily was told during a facility tour last year.
Melanoma is the most common cancer in the United States, killing 8,000 people every year. That’s particularly tragic because melanoma, caught in the first five years, is one of the most treatable of cancers, with a survival rate exceeding 99%.
All it really takes is a device like the vector and 30 seconds to make a life-changing difference for those patients.
That’s been the impetus behind a lot of the services the Hoskinson Clinic has brought on board.
He eventually parted ways with them to start his own company, Input Output Group, and his own digital asset platform, Cardano, ultimately making a fortune in the process — though it wasn’t an easy road, his brother, William Hoskinson said.
“My brother’s success in the cryptocurrency market was not handed to him. He started with nothing,” William Hoskinson said. “His first venture, built on years of living on pennies, ended with an overseas investor taking the profits while my brother walked away with nothing.”
His second venture was helping to build Ethereum.
“When that ended, he arrived back in Colorado with empty pockets for the second time in his career,” William Hoskinson said. “He didn’t give up. He went to Japan, without knowing the language or customs — and worked tirelessly to launch Cardano. After years of struggle, he finally found success.”
When William left the hospital, he got a call from his brother, Charles, asking what it would take to get him back into medicine.
“A clinic where doctors can be physicians again,” William told his brother. “Where quality care is the priority.”
Still Lofty Goals
Becoming the Mayo Clinic of the West is still the family’s goal for their Gillette facility, Wolfson said.
But getting there means being realistic about expenses and getting things on a more sustainable path.
“There will be a second phase sometime in the somewhat near future,” he said. “I can’t say exactly when, but yeah, there will be a second restructuring.”
Future construction plans for the clinic had included a surgery center, with an underground tunnel leading from the clinic to the center.
Those plans are on hold for now.
“Going forward, we are slowing down,” Hoskinson said. “There will be no additional large construction this year. We are going to focus entirely on making our current services great and ensuring our clinic can stand on its own two feet.
“My brother has every right to ask that this clinic eventually support itself,” he added. “We are committed to staying here, to serving you, and to making healthcare in Gillette better.”
The Gillette Clinic has so far refused to take government funding in the form of grants and the like, Hoskinson added.
“While the local hospital receives $18 million a year in taxpayer funding, and other projects receive massive government grants, Hoskinson Health & Wellness Clinic has never received a single penny of taxpayer money,” he said. “We serve over 18,000 patients. we accept Medicaid, Medicare, and patients with no insurance – something many private practices simply cannot afford to do, because reimbursement rates are abysmal.”
The clinic has brought specialties to Gillette that hadn’t existed there before — rheumatologists, a certified allergist/immunologist, and an ophthalmologist.
The hope is to continue that to the extent possible, while recognizing that sustainability is key to long-term success.
Renée Jean can be reached at renee@cowboystatedaily.com.
