PVHC takes step toward affiliation with Billings Clinic

Posted 11/8/18

Powell Valley Healthcare has taken a preliminary step toward becoming an affiliate of Billings Clinic.

At a brief, special meeting Monday night, the Powell Valley Healthcare Board of Trustees …

This item is available in full to subscribers.

Please log in to continue

Log in

PVHC takes step toward affiliation with Billings Clinic


Powell Valley Healthcare has taken a preliminary step toward becoming an affiliate of Billings Clinic.

At a brief, special meeting Monday night, the Powell Valley Healthcare Board of Trustees voted unanimously to explore an affiliation with the Billings-based nonprofit.

“I think this gives us an opportunity to start looking at some things that could open some exciting new ventures in the future,” said PVHC Board President R.J. Kost.

No immediate changes are in store. Leaders from the two healthcare organizations said it will likely take a year to fully explore the potential partnership and what it might look like, and no final decisions have been made.

But PVHC board leaders seemed enthused by the possibilities.

“I’m excited,” said Dr. Nathaniel Rieb, a board member and surgeon at PVHC, “because I think it will provide opportunities for growth and services that Powell hasn’t had, or that we’ve had sporadically, that will allow for patients to get more of their care closer to home.”

Further, because of the way it would integrate health records and protocols, Rieb said an affiliation with Billings would also streamline local patients’ care when they need to see a subspecialist — “whether that’s as a visiting doctor here, or they have to make the trip to Billings.”

PVHC CEO Terry Odom described the board’s decision to explore the affiliation with Billings Clinic as forward-looking and aimed at positioning the organization “for the long haul.”

Odom said the dwindling number of small community hospitals like PVHC — which are known as critical access hospitals — are finding it harder to compete in the ever-changing field of healthcare.

“I think an affiliation with someone will be a prudent move moving forward,” Odom said, adding, “I think even bigger community hospitals are affiliating with other community hospitals for different reasons — buying power, provider relationships.”

Added Kost, “I think everybody’s realizing that by hooking up with a larger entity, we’ve got a strong support system.”

Powell Valley Healthcare parted ways with its longtime management company, Healthtech Management Services, in June 2017 and has been looking at possible replacements in earnest since then.

PVHC’s partnership with Billings Clinic could be much broader than the one with Healthtech, a company that primarily offers consulting services and manages smaller hospitals.

In contrast, “a Billings Clinic is a whole healthcare organization, so partnering with them gives us more opportunities,” Odom said. “So even if we start with a simple management services agreement, there’s still opportunity for them to send more visiting physicians [for example]. … It sets a path for more collaboration.”

Billings Clinic employs more than 4,000 people — including more than 400 doctors and advanced practitioners, according to the organization’s website. It operates a 304-bed hospital, a trauma center, surgery center and 44-bed inpatient psychiatric unit in Billings, along with other facilities that include clinics in Cody and Red Lodge, Montana.

Cody Regional Health — which includes West Park Hospital — recently partnered with Billings Clinic to open a cardiology center in Cody.

Beyond its own medical facilities, Billings Clinic also manages 11 critical access hospitals across Montana and Wyoming. Among them is North Big Horn County Hospital in Lovell.

When longtime North Big Horn County Hospital District trustee Don Minchow left their board in early 2017, he praised the affiliation with Billings Clinic.

“They’ve helped us a lot,” Minchow told the Lovell Chronicle at the time. “They’ve given us an opportunity to maintain our position and grow what we have to offer.”

Billings Clinic is led by a physician CEO, who sits on a governing board with nine community members and two physicians.

In a Monday news release about the possible affiliation with PVHC, Billings Clinic said it is “focused on helping organizations enhance services to help them provide as much care as possible in the local community.”

Billings Clinic officials said they can provide an integrated electronic health record system and operational support in finance, human resources, compliance services, quality and patient safety work, physician recruiting and group purchasing.

Because of Billings Clinic’s size — the organization brought in $753 million in revenue in fiscal year 2016-17 — it can often negotiate lower prices for items and services than what a smaller organization like PVHC — which had roughly one-tenth of that in revenue in 2017 — would pay.

For instance, through an affiliation with Billings Clinic, Odom said PVHC would be able to get a significant discount on more robust electronic medical record software.

Monday’s decision to sign a letter of intent to explore an affiliation with Billings Clinic does not commit PVHC to ultimately move forward with the plans.

As for why a formal expression of interest was necessary, “that’s a lot of manpower, which is time and money,” Tracy Copenhaver, an attorney for PVHC, said of the process, “and I think everybody wants to know the other side’s serious — committed to, in good faith, exploring a relationship that’s beneficial to both.”

While the search for a new management services company took on new urgency after the contract with Healthtech ended in mid-2017, PVHC leaders had been considering a switch for years.

Kost said those discussions had to be put on hold when PVHC entered and worked through Chapter 11 bankruptcy to deal with a series of malpractice lawsuits brought against former PVHC surgeon Dr. Jeff Hansen. However, PVHC leaders stressed that the decision to pursue an affiliation with Billings Clinic was not a result of the bankruptcy case, which ended in March.

“This was looked at long before the bankruptcy, and it just got stalled,” Kost said.

PVHC considered managing itself, but “that really was not a good idea,” he said, “because trying to do it yourself is just so limited — out there on an island.”

Before Monday’s vote, PVHC leaders met with their counterparts at Billings Clinic — and Rieb said PVHC also had serious discussions with SCL Health, which owns St. Vincent Healthcare in Billings.

“This was not a snap decision that the board made,” Rieb said. “This was a decision that was deliberated on for quite some time — and it was a decision that was made in the best interests of our hospital and, by extension our community.”

“We know that this is the best direction for our hospital to go,” he added. “We see it as opportunity, not as giving up or anything like that. This is opportunity.”

Powell Valley Healthcare is governed by a 10-member board — the seven publicly elected members of the separate Powell Hospital District board and three members of the PVHC medical staff.