Community Medical Center is officially under new ownership.
At 12:01 a.m. Friday, the hospital was purchased by a partnership of Billings Clinic and RegionalCare Hospital Partners.
Montana Attorney General Tim Fox approved the $74.8 million sale Monday.
At a news conference at the hospital Friday, Jeff Egbert was announced as the interim CEO of Community Medical Center, following the resignation of former CEO Steve Carlson.
Egbert, a native of Havre, most recently served as the interim CEO for RegionalCare's hospital in Wilmington, Ohio. He described his role as transition management and communication until the hospital's leadership can find a permanent CEO, a process that Egbert expects to take anywhere from six to nine months.
“I’ll be spending the next three to four weeks just learning this hospital and what is unique about it,” he said. “Because they’re doing a lot of things very well, and we want to learn those and transfer that back into RegionalCare. There are a lot of other things throughout RegionalCare that we’ll be bringing here and ensuring best practices amongst our nine hospitals, 10 if you include our affiliation with Billings Clinic.”
Egbert said that the quality of patient care should increase with the new partnership. Billings Clinic and RegionalCare operate their hospitals under a physician-led model, which was first pioneered by the Mayo Clinic in Minnesota.
“We’ll have access to best practices in other hospitals that we own and we’ll be sharing those,” he said. “One of the things that we’ll be doing a lot more of in this joint venture relationship with the Billings Clinic is involving physicians, and having them at the table helping us develop strategy and prioritization of where we’re going to spend our capital, our community needs assessments, reviewing that, and having more open and inclusive dialogue with doctors.”
While Egbert himself isn't a physician, he expects that Community will eventually hire one to be the CEO.
“The desire at this point in time is to eventually recruit a physician executive to lead the organization,” Egbert explained. “My being here will afford them the opportunity to do a national search and get the final review and vetting of that individual so we get the right fit.”
Egbert has nearly 25 years of hospital executive experience, including stints as CEO in Texas, Oregon, Alaska and Arizona. His family still lives in Arizona, so he said he'll be balancing his role here with seeing them as much as possible.
Egbert is a member of the American College of Healthcare Executives and has a master's degree in health care administration and a bachelor's degree in chemistry and biology.
He said he frequently has served as interim CEO because he likes the challenge of transition.
"I've done a lot of turnaround management in my career, and I think am very good at communicating with communities and physicians and employees," he said. "That's when you really need to focus on communication, is when you're changing. And I have a calming effect by virtue of communicating."
Egbert had three back-to-back employee forums Friday morning.
"They were a lot of fun," he said. "Of course there's been a lot of questions, because people want to know what's going on. Because there's been so much speculation on what this is going to look like. I think they were somewhat relieved to find out that we don't just come in here with a plan that we're going to lay on you, we're coming here to learn from you, and then together we'll determine what the opportunities are to improve and make a stronger hospital and stronger bonds between the community and the staff. I'm excited."
People are always wary of change, Egbert admitted.
"Once we determine what the changes are going to be, then we'll start communicating that," he said. "As soon as you fill the vacuum, the void of communication, people begin to relax. And that's my role. There's a need for openness."
Dr. Nicholas Wolter, the CEO of Billings Clinic, said he is glad to have the long review process – it took five months for the AG's office to approve the sale – over with.
He said he's been familiar with Community for nearly two decades, which was part of the reason the opportunity to purchase the hospital was so appealing. And being in the joint venture with RegionalCare before Community's board of directors started looking for potential buyers helped.
"The partnership with RegionalCare gave us access to capital," Wolter explained. "They've got great experience with running hospitals and the clinic's experience with how physicians and hospitals work together and the focus on quality care and safety, it seemed like a good match."
Wolter, a physician, said there are some differences in how Billings Clinic and Community operate.
"We have physician leaders at all levels of the organization," he said. "We have an internal board that we call the leadership council and physicians elect seven of their practicing colleagues that have four-year terms. Pretty much, all of the decisions of the organization go there – budgets, capital, other things – before they go to our community board."
Community's board made the decision to sell the hospital after a period of financial hardship in the mid-2000s. They were advised by consultants that the hospital’s long-term viability as an independent, community-based hospital was uncertain because it would be increasingly difficult to generate the capital necessary for improvements, physician recruitment, technology upgrades and quality care based on the amount of revenue it was taking in.
Wolter said that despite the reasons that compelled the Community board to find a buyer, he thinks the hospital is in good shape, especially now that Billings/RCHP is in charge.
"I haven't been in detailed conversations with (the board members) about what they thought the key problems were, but what my perception is, Community has done really well the last six or seven years," he said. "They've made a lot of advances, financially they're in good shape, the facility is in good shape. I think the board there, and I'm a little reluctant to speak for them, but they were looking out over the next 10 to 20 years with health reform and noticing how many partnerships were forming around the country, so that the right kind of partnership allows you to be stronger with all the changes we're seeing, the way quality and safety measures are tied to reimbursement, the reductions in reimbursement. So I think it was more of a proactive, 'we're going to be stronger if we look ahead'."
Wolter said he understands that people might be wary of an out-of-town, for-profit entity taking over what was a local nonprofit hospital.
"The first thing I'd say is that's always a valid concern," he said. "But we have many not-for-profits in the country, including Sisters of Charity in Billings and Sisters of Providence here that in essence have headquarters out of state. And that's true all over the U.S., so this is not unique. I do think that the partnership with Billings Clinic is hopefully one of the things that will give people confidence that there's still going to be very much a state of Montana focus."
Wolter said a Missoula resident will join the Billings Clinic board of directors to provide a local voice in the hospital's plans.
"We're really here to meet the needs of the people who live here," he said.
Marty Rash, the CEO of RegionalCare, was also at the news conference.
“We look to partner with health care organizations that have similar visions and values to make sure we are the right fit for that hospital and community,” he said. “Working together with Billings Clinic, this is an excellent fit.”
Headquartered in Tennessee, RegionalCare was recently the recipient of $300 million in equity from Warburg Pincus, one of the world's largest health care investment firms.
The Montana Attorney General's Office has until Feb. 27 to decide whether or not to approve the CMC board's plan for the disbursement of proceeds from the sale. Its proposal is that $10 million will go to the University of Montana Foundation as a direct gift, another $1 million to $1.5 million will go to the CMC Reserve Fund and the bulk of the proceeds, $64.2 million, will be held by Community Medical Center until a new Community Hospital Legacy Foundation is created and receives tax-exempt status.
That independent private foundation will hold the money on an endowment basis. The foundation will have a health care-minded mission to serve people within the same geographical area currently served by the hospital.
The Attorney General's Office is still taking public comment on the proposal at doj.mt.gov/consumer/for-consumers/cmc-public-comments.