Economist weighs in on potential hospital merger, union contract affected


Economist weighs in on potential Missoula hospital merger

MISSOULA, Mont. - A newly formed union at Missoula's Community Medical Center was set to ratify its contract Thursday night, and we've learned hospital merger talks may have played into the deal.

Community Medical Center hired a consultant in 2013 to explore potential partnerships with a larger organization, but hospital officials won't say which organizations they are in talks with until an agreement is reached.

When the hospital notified a group of operating engineers -- who were already in the process of forming a union -- about a potential merger, union negotiators wrote succession language into the union contract.

"The language basically says that, in the event that there was a merger, a change of management, new ownership, or something of that sort, the hope would be that that new employer would honor the terms and conditions of the contract," said International Union of Operating Engineers negotiator Craig Davis.

Several local doctors NBC Montana has been in contact with say it is common knowledge that Providence Health Group, the owner of St. Patrick, Missoula's other hospital, is in the mix for merging with Community Medical Center.

University of Montana Economist Bryce Ward says if both local hospitals have the same owner, the care and quality of service they provide could change.

He says, from Community Medical's standpoint, a hypothetical merger with St. Patrick makes sense.

"You've got potential efficiency gains," said Ward. "With a merger with St. Pat's, you get a larger organization. You maybe don't have some duplicated things, and some cost savings.

But Ward says there are some downsides as well -- primarily, a loss of competition.

"When you do that, or potentially do that, that can give the provider the power to raise prices, and we know that they frequently do that in other markets," said Ward. "Not to say that will happen here. That's just what the research raises concerns about."

Ward says there are also other details and factors that could make such a merger difficult.

"Not to say that it can't occur, or that the benefits won't materialize for the community. It's just something that we have to be careful of, and that regulators will likely look at."

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