Former St. Patrick Hospital CEO Larry White says he was "shocked" by Community Medical Center's announcement last week that it aims to transition into a for-profit hospital as a result of its planned merger with the Billings Clinic and a Tennessee-based partner, Regional Care.
"I did not expect that the corporate culture of Community Medical Center would accept that decision," says White, who also teaches at the University of Montana.
Community admits nearly 6,000 patients each year and employs more than 1,100 people with an annual payroll of over $38 million. Its medical staff includes 300 physicians.
When Community announced in February that it was considering a merger, speculation swirled about which provider it would partner with and what the change would mean for consumers and the local economy.
During the March 28 press conference announcing the deal, local administrators explained the Community Medical Center board of directors selected Billings Clinic and Regional Care after weighing how best to lower cost and improve quality.
"We selected this group and the joint venture they offer because we think that they bring in combination all the unique competencies and capabilities that we seek," Community CEO Steve Carlson said.
The merger will also bring capital to Community, which in October laid off 20 employees as part of an effort to cut $3 million in costs.
Billings Clinic CEO Nick Wolter explained during last week's press conference that Community isn't the only hospital looking for a for-profit partner. Declining admissions, lower reimbursement payments from the federal government and changes stemming from the Affordable Care Act are prompting nonprofit hospitals across the country to merge with comparably flush partners.
"This seems to be a trend in terms of how one can bring the capabilities of those two different approaches together at a time when health care is changing in such a dramatic way," Wolter said.
White agrees that the merger will likely help preserve competitive prices and provide Community cash to grow. He notes, however, that for-profit medicine operates very differently than nonprofit providers.
"If you look at the pattern of for-profit medicine in America, it's just a business," White says. "It doesn't have as much connectivity to the grassroots of the community. That's the style of for-profit medicine. And the longer that that kind of an attitude is around the less you remember your roots and traditions."