BILLINGS - Despite big budget cuts at Billings Clinic, Montana's largest hospital is still moving forward with two major initiatives: designation as a Level 1 trauma center and a merger with Kalispell-based Logan Health, a hospital spokesman said Monday.
The Level 1 trauma designation was announced a year ago by former hospital CEO Scott Ellner. The $30 million plan would increase care for trauma patients across the region along with revenue opportunities for the hospital.
The merger was announced in February with the goal to complete it this summer.
Questions about both moves arose on Friday when a memo sent to Billings Clinic employees from interim CEO Clint Seger stated the hospital is losing money in an unsustainable way. To get back in the black, Billings Clinic leadership will be aiming for cuts of $4.55 million a month.
Outside of confirming the authenticity of the memo and clarifying the Level 1 trauma designation and Logan Health merger will move forward, the hospital has declined interview requests from MTN News.
The memo shows a dire financial situation for Billings Clinic and outlines the hospital's plans to cut pay for doctors up to 5%, suspend company contribution to employee retirement plans, and freeze hiring company-wide, among other cost-saving measures.
Looking around the United States, Billings Clinic isn't the only hospital facing financial hardship.
“I think right now hospitals are really enduring the worst of the labor shortage," said Pat Barkey, director of the Bureau of Business and Economic Research at the University of Montana.
Barkey says two big drivers of financial struggles in hospitals are the demand for non-emergency care and the labor shortage.
“You put those together and it’s been a very challenging environment and by the way, it’s fairly unique for healthcare and hospitals to have this kind of challenge," Barkey said.
Becker's Healthcare, a nationwide hospital magazine, counts 33 hospital and health systems cutting jobs as of March 31, with many in Pennsylvania, North Carolina, Ohio, California, and beyond.
Billings Clinic is not on the list and has not yet spoken publicly about the cuts.
Barkey says he senses a greater conversation about the state of U.S. healthcare on the horizon.
“Healthcare has long had the reputation of being the recession-proof part of the economy, but things have really changed," Barkey said. "The go-go growth of healthcare, especially recently, has not been there.”
