Billings (Mont.) Clinic-Logan Health does not measure its growth in acquisitions. Over several decades, the system has built 25 affiliate relationships across Montana, most without taking ownership of another organization. Clint Seger, MD, the system’s CEO, describes the operating philosophy simply.
“We’re not here to build an empire,” Dr. Seger told Becker’s. “We’re trying to grow the villages.”
The latest village: Helena, Mont.-based St. Peter’s Health. St. Peter’s, which operates a 123-bed acute care hospital alongside physician clinics, urgent care clinics, home health and hospice care and other services, reached out to Billings Clinic-Logan Health to explore ways to expand clinical access.
The two systems announced July 14 they were exploring a collaboration covering clinical services, workforce development, operational efficiencies, technology and purchasing, without a merger or acquisition. An assessment period is expected to take six to nine months before the organizations formalize a letter of intent.
Billings Clinic-Logan Health, which has more than 9,000 employees, was a natural partner for St. Peter’s to approach. The system completed a merger of its own in September 2023 when Billings Clinic and Kalispell, Mont.-based Logan Health officially combined. Those two organizations were located roughly 400 miles apart, and that experience gave Dr. Seger a close look at what large-scale collaboration at Montana’s scale actually demands.
“Putting two organizations together the size of a Billings Clinic, Logan Health, that are 400 miles away, takes a lot of communication, collaboration,” Dr. Seger said. “It takes time to make sure that there’s clarity on what we’re trying to accomplish. If you have people who are just behind the scenes creating the plan and rolling it out, that never works well. You have to bring the teams together to make sure we do it right.”
The announcement is one of several health system partnership deals Becker’s has reported in July. Three of those deals cite financial pressure as a primary driver, including St. Christopher’s Hospital for Children in Philadelphia, which is exploring a pediatric alliance with three other systems, and Minot, N.D.-based Trinity Health, which is seeking a strategic integration with a larger organization. The Montana announcement stands apart: neither system cited financial distress as the driver.
The financial backdrop driving those other deals is not abstract. Delayed insurer payments and rising workforce and pharmacy costs are already squeezing margins, pressures set to compound as HR 1 is expected to cut federal Medicaid spending by $90.9 billion in 2029 alone and by a projected $911 billion by 2034.
The driver for the Montana systems instead is geography. St. Peter’s Health CEO Wade Johnson described the calculus that prompted him to reach out to Billings Clinic-Logan Health: in Helena, the system sometimes needs a fraction of a physician’s time in a given specialty, a half, three-quarters or seven-eighths of a position, too little to recruit independently but potentially fillable through resource-sharing with a larger partner.
“In today’s healthcare environment, partnering is essential for improving access to care when there’s limited clinical resources,” Mr. Johnson said in the announcement. “We believe Montana’s independent health systems can be stronger by working together for our patients.”
Conversations regarding the collaboration have started with physicians, not accountants, the CEOs said.
“We didn’t have two accountants get together and say, ‘Oh, can we do this, that, or the other for this relationship?'” Mr. Johnson told Becker’s. “It really stems out of doctors coming together and having conversations about how they can increase the access to care and improve the care for their patients.”
Mr. Johnson offered his own illustration of what distance means in the state. When his children played high school sports, a 150-mile drive to an away game was unremarkable. “Could be 180 or 200 miles,” he said. “It’s just different.”
That context shapes what the six-to-nine-month assessment will look like. Both systems plan to bring clinicians together, focused on areas where recruiting has been most challenging. The leaders will also explore administrative and supply chain opportunities, which will inform any formal agreement.
For both leaders, local governance is not a procedural detail but the point. Billings Clinic-Logan Health’s affiliate model has long preserved community members on local governing boards. Dr. Seger said the ability to keep local community members involved, whether in philanthropy or as champions of community health needs, is central to why the organization partners rather than acquires.
Mr. Johnson framed the balance between shared and local decision making in a phrase: “Interdependence is the key to independence.” Collaborating on clinical resources and administrative functions does not require giving up community control, he said.
Both leaders said finding the right partner requires getting cultural alignment right first. Mr. Johnson argued that shared values are the precondition for any partnership to last.
“In looking for a partner, I think the most critical step is finding a partner who shares your values. If you have cultural alignment, then I think all sorts of different clinical models and business models become possible,” he said. “Whereas if it’s the other way around, I don’t think they last. Not only are we seeing a lot of M&A activity across the country, we’re seeing those coming together and coming apart. And I think sometimes those coming apart are because there was not good cultural alignment.”
Mr. Johnson, who has worked in healthcare markets across the country, said the approach merits consideration elsewhere, even as he acknowledged that every situation is unique. Whether that model spreads beyond Montana is something both leaders say they hope for.
Dr. Seger said collaboration rather than consolidation is what makes healthcare strong, particularly in a strained environment, and that it is his hope non-acquisition partnerships become more commonplace across the industry. Mr. Johnson put the argument in terms of what patients want.
“I don’t think that mergers and acquisitions are always the best answer,” he said. “I don’t think that the majority of the patients really want to see medicine get corporatized more and more, and I think they want to be able to connect locally and see how the decisions that are being made locally are impacting and improving the health of their communities.”
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