While hospitals across the nation are merging at the highest rate since the 1990s as the health care landscape undergoes a dramatic shift, Kalispell Regional Healthcare and North Valley Hospital are considering increased collaboration between the valley’s two largest health care providers.
In a joint interview on July 20, Velinda Stevens, CEO of Kalispell Regional Healthcare, and Jason Spring, CEO of North Valley Hospital in Whitefish, said the two hospitals are exploring possible opportunities that could support a formal working relationship between the two organizations in the future.
A task force with representatives from both hospitals is developing details for a plan that will be presented to both organizations’ board of directors later this year, according to hospital executives.
“North Valley is looking at their options and what they want to do for partnerships. Kalispell is clearly who we want our partner to be, whatever that means,” Spring said.
Spring said the hospital has been contacted by other organizations about possible acquisitions in the past.
Stevens said Kalispell Regional Healthcare is similarly seeing an increased frequency in organizations expressing interest in acquiring the hospital.
“We used to get (contacted) four times a year. Now we get it every month,” she said.
Last year there were 95 hospital mergers, consolidations or joint ventures and the year before that there were 98. In 2012, there were 105. In 2009, there were 50.
The consolidations are a result of the industry’s latest tectonic shift, triggered largely by President Obama’s Affordable Care Act, which has changed the economics for health care providers.
“In theory, integrated care is better care. That’s part of why you’re seeing this most recent wave of mergers,” said Bryce Ward, health care director at the Bureau of Business and Economic Research at the University of Montana.
Ward said it makes sense for hospitals to work together more frequently, particularly by sharing information through an independent entity to improve efficiency and delivery.
But the drawback of a merger is that consumers could end up paying a higher price for care, he added.
“The big fear, when you have mergers, is that the lack of competition will allow prices to rise. There is evidence that that can occur,” he said.
Stevens insisted that a possible merger is not at the forefront of discussions and said the hospital’s board of directors had not made any decisions about any potential changes.
The two hospitals already share physicians, specialists and a variety of services.
Spring said that the two hospitals already work together well and that it was worth strengthening that partnership for the benefit of both communities.
“We think what’s best for this market is to have it a valleywide system that allows us to move patients in a coordinated fashion through the system instead of having two or three different hospitals doing that,” he said.
The two organizations have agreed to follow a set of principles that would guide the task force’s efforts.
They are: support a formal working relationship between the two organizations; preserve each hospital’s unique business model, cultural identity, and community philanthropic support base; facilitate innovative collaboration among physicians, clinical, administrative, and technical staff; promote the sharing of “best practices;” and implement efficiencies among the hospitals that benefit the overall health care effectiveness, while promoting financial soundness.