Logan Health and Billings Clinic to Officially Merge in September

The two not-for-profit healthcare organizations announced on Feb. 15 of this year that they had signed a non-binding letter of intent to explore a merger

By Mike Kordenbrock
Logan Health, formerly Kalispell Regional Healthcare, pictured on May 19, 2021. Hunter D’Antuono | Flathead Beacon

Logan Health and the Billings Clinic, two of Montana’s largest hospitals, announced Thursday that they plan to officially combine into a single health system on Sept. 1.

The two not-for-profit health care organizations announced on Feb. 15 of this year that they had signed a non-binding letter of intent to explore a merger. Going forward with the merger was contingent in part on state and federal review. Thursday’s press release, posted on the Logan Health website, states that the regulatory review “has passed” and that the two organizations are “committed to moving forward together.”

A new governing board will be composed of five current Billings Clinic board members and five current Logan Health board members. The chair of the board will be from Billings Clinic and the vice chair from Logan Health, according to Thursday’s announcement. Logan Health President and CEO Dr. Craig Lambrecht will be the chief executive officer, and Billings Clinic CEO Dr. Clint Seger will be chief physician executive.

The press release announcing the merger states “there will be minimal changes in how each organization operates on day one,” but that “integration work” will take between one and two years, and will involve teams identifying “operational synergies” and opportunities for improvement.

The announcement also describes some areas of focus for the new combined health system, including improvements to care; expansion of primary and specialty care; providing a connected rural trauma and emergency transport program; combining organizational commitments to mental health; creating a diverse organization with efforts to engage in impactful approaches to population health, health equity and health disparities including for underserved populations and tribal partners; continued investment in advancing care and services; enhancement of recruitment and retention, and growing education and research opportunities.

KFF Health News reported in July of 2022 that the Biden Administration had successfully challenged four hospital mergers and noted that hospital systems in highly consolidated markets often have higher prices.

Speaking with the Beacon earlier this year, both Lambrecht and Seger described the merger as having the potential to allow the hospitals to address areas of the state where disparities in care exist, and allow the institutions to create a more coordinated, efficient system of emergency medical services, transfers and transport systems to help patients access critical care. Seger said at the time that in looking for more efficiencies in the merger, the desire is to increase the quality of care while also being mindful of costs and to decrease costs, and he said that he saw opportunities to keep costs down by making purchases at greater scale.

At the time of the initial February announcement, the two health systems employed more than 9,000 people. Since then, Billings Clinic has announced pay reductions and layoffs. In April, the hospital confirmed that it was reducing pay for physicians and senior executives. In reporting on the pay cuts, Beckers Hospital Review described the health system as recording monthly losses that it said were unsustainable and attributed to costs for supplies and labor, including contract labor, and unpredictable post-pandemic patient volumes. The hospital said the pay cuts were part of a financial sustainability plan.

In June, Billings Clinic confirmed that it was laying off approximately 27 employees, with five of the layoffs occurring in its information technology and compliance departments. The layoffs were presented by the Clinic as an effort to reduce contract labor and other labor costs as part of an effort to address rising costs with a “comprehensive financial recovery effort.”

The news of the merger date came Thursday afternoon as SEIU Healthcare 1199NW, the union representing nurses at Logan Health, was expected to hold a member vote Thursday night on a new contract agreement reached with Logan Health last week. A spokesperson for the nurses union said they were unable to discuss details until the new contract had been ratified.

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