Dr. Tom Roberts - November 25, 2005
Benefis, St. Patrick & Providence Services
Some of the more interesting local developments in health care take place below our collective radar screen. They just happen. One day we wake up to a very different health care environment than we had the day before. I think that we’re about to see another one of those developments, and it will have happened before we even notice it. I’m reminded of the analogy of feeling like mushrooms, growing in the dark and being fed horse manure.
Montana’s two biggest hospitals west of Billings, Benefis in Great Falls and Saint Patrick Hospital in Missoula, are about to take very different paths for their health care future. The important part of that future is that it’s our future. The implications may be very significant, but community discussion has been minimal to non-existent.
Until now, both of these hospitals have been part of the same not-for-profit health care system, Providence Services. This system of hospitals is based in Spokane and includes nine hospitals in eastern Washington and Montana. It’s owned or sponsored, depending on how you look at it, by the Catholic order, The Sisters of Providence. Benefis was created and became part of this system in 1996 when Montana Deaconess and Columbus hospitals merged. The Sisters have been in Great Falls since 1892. Benefis has just announced that they are going to withdraw from the Providence Services system. Not to join another system, but to become their very own non-profit hospital, unaffiliated with any other, at least for now. Very little is in the news about this, and it hasn’t happened yet, though they have changed their web site, letterhead, and signage to reflect an absence of Providence Service affiliation. Apparently negotiations continue, and Providence Services is awaiting word from Rome on whether or not it’s OK. Benefis has been a very profitable institution recently, and from what I can gather they’re not happy contributing that profit to the larger system. They apparently want to develop locally, and not be limited or directed by outside corporate control. The CEO and board have tried to be reassuring about their sensitivity to community needs. However, without clear direction from a larger mission driven organization, Great Falls will need to depend on the good will and abilities of a very small group of people.
Meanwhile in Washington state, negotiations are under way between Providence Services, and a different hospital system, also affiliated with the Sisters of Providence. Providence Health Systems owns 18 hospitals in western Washington, Alaska, Oregon and California. They also own a health plan with over 850,000 people and a number of long term care facilities. These two systems are well under way with discussions about a possible merger. They will be meeting next month to make that final decision. If this goes through, St Patrick Hospital will become a small part of a very large Catholic Health care system, the 6th largest in the US. The combined organization would have almost $6 billion in assets, 45,000 employees and 27 hospitals with a total of over 5,000 acute-care beds.
Providence Health Systems is based in Seattle. We don’t know much about it here, but that may change pretty soon. It appears to have a top down approach to managing it’s hospitals as opposed to a more local control, bottom up approach of Providence Services. The Seattle based system had a very impressive 4.6% profit margin last year. This is almost twice the national average of 2.5% for non-profit systems and is three times the 1.5% profit margin of the Spokane based system. It’s obviously important to make money in order to survive, but it’s also important to serve local needs that may not be money makers. The Sisters of Providence have had that as their mission for 130 years. How well that mission will be continued if the merger goes through is the question that people in Missoula at least need to ask.
Providence Health Systems, the Seattle based organization, has won praise from Wall Street bond analysts for being "proactive at divesting under performing assets." The most recent – and most widely praised - was the sale to a for-profit corporation of their only hospital located in a poverty community, Yakima, Washington. This is a community whose health care needs the Providence Sisters had served since the 19th century. Providence Health System is also one of several not-for-profit hospital systems to be sued recently for allegedly overcharging uninsured patients. These facts are not very reassuring.
Our two big hospitals, Benefis and Saint Patrick appear to be making completely different decisions about their future. Benefis is going for local control and independent management of local resources. There will no longer be an affiliation with a mission driven organization, the Sisters of Providence, who have served that community’s needs for well over a century. St Patrick may join a very large corporate organization that will provide it with a large pool of resources, but might lead to a compromise of the mission through profit based management.
These are real issues. The outcomes will affect our system of health care for many years. Which approach will be best might be different in Great Falls and Missoula. We’ll probably get a chance to see. What doesn’t seem to be happening is any kind of a discussion outside of the corporate boardrooms. Apparently, the mushrooms don’t get to vote.
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