The two largest health care providers in the Flathead Valley are transitioning to a formal affiliation that will create a unified and robust medical organization serving the region.

Kalispell Regional Healthcare, a growing nonprofit corporation comprised of the local hospital and other services across Western Montana, is in the process of finalizing a partnership with North Valley Hospital Whitefish.

The governing boards of both organizations recently finalized the agreement and governance bylaws that set the stage for the formal affiliation, which is expected to take effect May 1.

Hospital officials say North Valley Hospital will join Kalispell Regional Medical Center and The HealthCenter as an affiliate under the umbrella of Kalispell Regional Healthcare. The organizations will be integrated both clinically and financially. Because the relationship is structured as an affiliation, there was no purchase agreement or any transfer of assets, according to Mellody Sharpton, director of communications at Kalispell Regional Healthcare.

North Valley Hospital, Whitefish’s lone hospital with roots dating back to 1905, will retain its name, mission, charitable purposes and tax exempt status, according to hospital officials. The hospital’s board of directors will remain intact while the two organizations will have shared governance by placing board members of each organization on the other organization’s board.

“Many patients in the Flathead Valley visit both North Valley Hospital and Kalispell Regional Healthcare facilities,” stated Velinda Stevens, Kalispell Regional Healthcare president and CEO. “By aligning our organizations, this affiliation will allow us to focus on coordinated care within our community, allowing more patients to access services they need locally versus foregoing care or traveling out of the area.”

Kalispell hospital officials say there will not be any closing or consolidating of facilities, nor will there be any jobs eliminated at either facility based on the affiliation agreement.

North Valley Hospital, which has roughly 400 employees, will continue its current scope of major acute care services, including the emergency services department, obstetrics, and inpatient and outpatient medical and surgical procedures.

The affiliation comes at a time of great change in the health care industry and as hospitals across the nation are merging, consolidating or creating joint ventures like the one in Kalispell and Whitefish.

The consolidations are a result of the industry’s latest tectonic shift, triggered largely by President Barack Obama’s Affordable Care Act, which has changed the economics for health care providers. Among these significant changes are expanded insurance coverage, increased use of high deductible plans and payment reforms that emphasize quality over quantity, according to the Bureau of Business and Economic Research.

While health care in the U.S. remains expensive, in recent years cost growth has stalled, according to the BBER. In 2013, U.S. health care spending grew by 3.6 percent, the smallest increase since 1960. For five years in a row, the U.S. experienced low health care spending growth, compared to 1990 through 2007, when average spending grew 7 percent annually.

Questions have been raised, too, about how partnerships or consolidated services can impact consumers.

“In theory, integrated care is better care. That’s part of why you’re seeing this most recent wave of mergers,” Bryce Ward, health care director BBER at the University of Montana, previously told the Beacon when asked about the local affiliation.

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 any 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.

Both local hospitals formed a joint task force in July 2013 to explore opportunities for collaboration and affiliation between the two medical companies.

Both organizations have agreed to release an annual report for at least the first five years of the affiliation, showing the progress of the relationship and what has and hasn’t worked for the community.

Kalispell Regional Healthcare will share and recruit staff who can work with both organizations, according to officials.

The hospital has experienced significant growth in recent years and is in the process of expanding its emergency services department. The number of full-time-equivalent employees has jumped from barely 1,000 in 2001 to over 2,500 last year, according to hospital data. The first phase of a $14 million, 37,500-square-foot project to renovate and expand the ER is underway. The hospital board also recently approved a tentative plan for a women’s and children’s center that could break ground this summer. Hospital officials declined to provide any other specifics because the project remains in the planning stages.

“Our organizations have been working collaboratively for years on activities like recruiting and sharing physicians, sharing medical services, facilitating the electronic use of health-related information, and completion of join community health needs assessments,” stated Jason Spring, CEO of North Valley Hospital. “We are excited to formalize our relationship so we can more effectively work together and expand our efforts to provide accessible and affordable healthcare for our community.”

What Does This New Partnership Mean?

Source: Kalispell Regional Healthcare

 Why did North Valley Hospital and Kalispell Regional Healthcare create this affiliation?

The Governing Boards of both organizations are confident that this relationship is in the best interest of our community and our hospitals. A deeper collaboration, including clinical and financial integration, strengthens the ability of both organizations to provide accessible and affordable healthcare to patients in the Flathead Valley and neighboring communities.

What are the benefits of working together?

North Valley Hospital and Kalispell Regional Healthcare have worked collaboratively for many years on specific initiatives, including physician recruitment, shared medical and support services, and completion of joint community health needs assessments. Through a more formal affiliation, we expect to share more resources that will help us meet the health needs of the community, allowing patients to access services they need locally instead of foregoing care or having to travel out of the area. There will be an increased focus on managing the health of the communities we serve as well as excellence in direct patient care.

What is the structural model of the affiliation?

North Valley Hospital will become an affiliate of the Kalispell Regional Healthcare System, joining Kalispell Regional Medical Center and The HealthCenter under the Kalispell Regional Healthcare umbrella.

Will North Valley Hospital close and consolidate its facility with Kalispell Regional Healthcare in Kalispell?

No. North Valley Hospital will continue to operate as a separate critical access, general acute care hospital in Whitefish.

How will North Valley Hospital be governed?

North Valley Hospital will maintain its own Board of Directors, while creating shared governance by having Board members of each organization serving on the other organization’s Board.

Will North Valley Hospital Change its name?

There are no plans for NVH to change its name.

Will jobs be eliminated?

There are no plans to eliminate jobs nor any planned lay-offs at either facility based on the affiliation agreement.

Will North Valley Hospital staff become employees of Kalispell Regional Healthcare?

North Valley Hospital will continue to employ its own staff, but as an affiliate, they are employees under the umbrella of Kalispell Regional Healthcare.

If I am employed at both Kalispell Regional Healthcare and North Valley Hospital, how will this affiliation affect me?

Currently, less than 50 employees are employed by both North Valley Hospital and Kalispell Regional Healthcare. If you are one of these employees, your HR department will reach out to you to discuss how this affiliation will affect you.

Will any services be eliminated?

North Valley Hospital will continue its current scope of major acute care service lines, including the Emergency Department; Obstetrics (Delivery); Inpatient and Outpatient Medical/Surgical procedures.

Will the clinics be affected?

Opportunities will be explored to expand services and create efficiencies that will be of benefit to our patients in each clinic’s service area.

What will happen to North Valley Hospital’s Critical Access Hospital (CAH) status?

While the federal government is currently considering whether to leave in place the existing location requirements or establish new location requirements for CAH eligibility — which might result in the loss of CAH status for North Valley Hospital — the structure of the collaboration with Kalispell Regional Healthcare will not alter the CAH status.

What will happen to the NVH culture of Planetree patient-centered care?

North Valley Hospital will continue its participation with Planetree International. Patient-centered care, respect, and teamwork are central to both North Valley Hospital and Kalispell Regional Healthcare. Patients, guests, and the local community appreciate the unique cultures at both organizations. Our guiding principles not only call for maintaining each culture, but enhancing it. The approach of both organizations will remain focused on excellent patient care.

Will Quorum Health Resources (QHR) still be involved with NVH or KRH?

QHR will continue to provide some services to North Valley Hospital and KRH with the scope of services yet to be determined.

Will North Valley Hospital employee benefits or pay practices be affected?

Consolidation of employee benefits will occur, creating consistencies in the system that will allow employees to be recognized for their length of service (if applicable) in both organizations. Best practices from each organization’s programs were identified to create a consolidated benefit package for all employees.

North Valley Hospital has been looking at changing pay practices and pay structures for some time and has decided to amend some pay practices to align with those at Kalispell Regional Healthcare, thereby creating simplicity and consistency, especially for staff who work in both organizations.

Each employee’s circumstance is unique, so the impact of the new benefit package will also be unique to each individual or family. Details on benefits and pay practices will be available in the Benefits Forums scheduled at North Valley Hospital in April. Employees will also have an opportunity to speak with an HR representative individually regarding questions.