Community vs. community

Locals wonder why hospital sale avoids public input



Margie Hendricks sits at a table in the Missoula Public Library and sifts through stacks of documents labeled with slender green, pink and blue sticky notes. Each note is dated in the 75-year-old Hendricks’ tidy cursive to mark milestones in Community Medical Center’s history.

“Don’t let it intimidate you. It’s just stuff,” Hendricks says, as she shuffles through the hospital’s 1976 articles of incorporation and letters from the 1950s detailing how Community acquired its 40-acre parcel at Fort Missoula by way of the county from the federal government.

In the months leading up to the impending sale of Missoula’s Community Medical Center, Hendricks, a soft-spoken mother of six, has spent days digging through the hospital’s founding and guiding documents. She’s trying to understand how a nonprofit entity built by local donations and taxpayer-supported bonds could be converted into a for-profit operation benefiting out-of-state investors. She’s especially troubled by the fact that Community has yet to invite any public discussion of the deal.

“Citizens have contributed to this nonprofit entity for years,” Hendricks says. “They didn’t even give us an opportunity to know.”

In March, Community Medical Center’s Board of Directors announced its intention to sell the local nonprofit hospital to Billings Clinic and the for-profit RegionalCare Hospital Partners of Brentwood, Tenn. RegionalCare is funded by global private equity firm Warburg Pincus. According to the firm’s website, it has invested $50 billion in 35 countries since 1966. Warburg Pincus employs former U.S. Treasury Secretary Tim Geithner and has committed $300 million to RegionalCare, which owns eight hospitals nationwide.

Hendricks has a personal connection to Community. As part of a decades-long bottom-up effort to grow and sustain the hospital, her mother went door-to-door raising money to help build Community in the 1970s. Hendricks notes that fundraising drives such as that, in addition to low-interest industrial bonds backed by Missoula County, built Community Medical Center into what it is today—a health care facility dedicated to serving the public.

Community Medical Center admits nearly 6,000 patients each year and employs more than 1,100 people, and its annual payroll totals more than $38 million.
  • Cathrine L. Walters
  • Community Medical Center admits nearly 6,000 patients each year and employs more than 1,100 people, and its annual payroll totals more than $38 million.

Now, her primary concern is who gets the money from Community’s sale. While state law mandates that proceeds generated from the dissolution of a public benefit corporation such as Community remain dedicated to charity, the board has said nothing about its future plans for sale revenue.

Community CEO Steve Carlson tells the Independent the hospital board convened on Aug. 28 to deliberate where to invest sale proceeds and its decision could come as soon as this week.

“We continue to work on finalizing the agreement, but we have a few things yet to complete,” Carlson says. “We’re working to clarify and resolve some issues.”

As the board continues its quiet deliberations, Hendricks isn’t the only one critical of the process. Dr. Philip Barney, who worked at Community Medical Center for nearly 25 years, including as vice president for medical affairs, says the deal has far-reaching implications. The hospital admits nearly 6,000 patients each year and employs more than 1,100 people, and its annual payroll totals more than $38 million. Barney worries that locals could lose out without a seat at the table.

“I think the for-profit motive is going to result in the owners looking at the services a little bit differently. They’re going to be looking at the services more from the standpoint of whether they can make a profit or not, more the bottom line,” Barney says. “There also is more of an element of charitable care in a nonprofit than there is in a for-profit corporation.”

In response, Carlson notes first that RegionalCare has a solid philanthropic track record. “Their historic performance shows that their charity care rates are on average higher than ours,” he says. In 2013, Community donated $17.7 million in total charity care, including $8.85 million in direct health services.

Carlson says secondly that RegionalCare’s deep pockets will help improve care, not limit it, by funding services and encouraging top-notch staff recruitment.

In response to criticisms about transparency, Carlson says public input has impacted board decisions. In fact, he says residents who contacted the board in support of preserving Missoula as a two-hospital town contributed to the decision to partner with RegionalCare.

“I think they would respectfully say that input that they receive is very important in helping them shape—perhaps not make, but helping them shape—what they believe is the right decision for Community Medical Center on behalf of the community,” Carlson says.

Carlson encourages anyone with opinions on the sale to email the board through Community’s website, and notes that once the board decides where it intends to place sale proceeds, the Montana Attorney General is by law committed to vetting the deal.

“Just because we’re for-profit, paying taxes, doesn’t mean we’re any less interested or less engaged in this community,” Carlson says. “When we look back at this process, I think we will be able to say, ‘You know, that was transparent. That was open.’”

Attorney General Tim Fox intends to hire an appraiser to ensure Community is sold at fair market value, says Anastasia Burton, the AG’s deputy communications director, in a statement to the Independent. The state will also “undertake other investigative inquiries to ensure … sales proceeds will be devoted to non-profit purposes. As part of these inquiries, the Attorney General will seek public input, which may include a public forum,” she says.

Hendricks, for her part, says extending an invitation for public comment after the board decides what action it intends to take sounds like putting the cart before the horse. “I think there should have been a lot more public information,” she says.

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