GREAT FALLS — The sale of Teton Medical Center in Choteau to Benefis Health System will be completed April 30, officials said.
Benefis will take over management of the center’s clinic, hospital and long-term care facility on May 1.
Faced with decreased revenue, the TMC board of directors and administrator Louie King began looking at the possibility of affiliating with or being purchased by another hospital. At the board’s direction, King approached Benefis about a purchase.
TMC operates a 10-bed critical access hospital and 36-bed long-term care facility. With around 75 employees, TMC has an estimated $15 million economic impact on Teton County each year, according to a report prepared by consulting firm Eide Bailly.
For all that, however, a combination of uncompensated care, low censuses in the care facility and the changing landscape of American health care was something TMC could not weather, said King.
“We didn’t have a choice. We really needed to do this,” he said.
Small rural hospitals throughout the country increasingly are struggling to stay open.
Benefis CEO John Goodnow said he expects this acquisition of a small, rural hospital will not be the last one.
“This is not only a way to help a rural partner hospital, but it’s also our first acquisition, and we will learn from that process,” Goodnow said.
King and Goodnow say little should change for patients on May 1. No layoffs or changes in service are planned, they told the Great Falls Tribune.
TMC will retain its own board of directors, and King will continue as its administrator.
Under the purchase agreement, Benefis will pay $500,000 for TMC, whose assets are valued near $1 million. Benefis will purchase real property, buildings and equipment, and agree to operate the critical access hospital for the next seven years and the essential services — including x-ray, lab, clinic, skilled nursing and emergency room — for the next 15 years.
The agreement to operate the hospital is only seven years because of anticipated changes to reimbursement rates for inpatient care, King said.
A large portion of Teton County is part of a hospital district that funds TMC. After the purchase, the hospital district will be closed out over the next two to three years, giving TMC time to reconcile charges or liabilities it incurred before May 1.
Once the hospital district is closed, residents should see their tax bills go down, King said.
Nationwide, rural hospitals are struggling and seeking affiliations or acquisition with larger medical systems.
Critics of the Affordable Care Act have blamed that piece of legislation, which requires hospitals adopt electronic health record systems that are expensive and beyond the purchasing power of small, rural hospitals, for some of the financial issues.
Others point to declining populations in rural areas, deteriorating facilities and a change in health delivery systems.