Logan Health CEO flags rising health care costs as a top challenge

Finding efficiencies will be a key component to the success of the new Logan Health-Billings Clinic hospital system as the cost of health care rises and Montana reconsiders its Medicaid expansion program, Logan Health’s CEO said at a public forum last week.

Administrators and doctors at Logan Health spoke about integration efforts and challenges in the health care industry at their Healthy Communities event on Friday. The event aimed to provide insights to the public about how the industry operates and where its heading. 

The event began with conferences focusing on local health care trends and statewide health initiatives, and ended with two panel discussions featuring executives, doctors and community members. 

The last panel provided a look into why the health care system started the process to integrate with Billings Clinic earlier this year. Logan Health President and CEO Craig Lambrecht joked with the audience that they have “a lot of ‘splainin to do.”

“The reality of health care now is if you don't have a real strategy and if you don't figure out ways to find efficiencies, everything from the billing to delivery, specialty care, coordinated care, throughout a large area, you're going to have a heck of a time being successful,” Lambrecht said. 

The two hospital systems officially became one at the beginning of September. 

Lambrecht said health care systems across the country are either losing money on an annual basis or operating in slim profit margins, which has led to increased consolidation. Testimony given to a U.S. House of Representatives subcommittee by the Rand Corporation this May stated there were 1,887 hospital mergers between 1998 and 2021.

Lambrecht said Logan Health has been operating on a 2 percent profit margin in recent years, not uncommon for nonprofit hospitals of their size, he said. But given price increases from inflation, he said patients are struggling to keep up with increasing health care costs. 

This particularly comes into play when talking about the reauthorization of Medicaid expansion, Lambrecht noted, which is up for discussion during the 2025 legislative session.

He said the combined Logan Health, Billings Clinic organization is financially stable, but losing Medicaid expansion could cause big changes in services.

“Medicaid expansion is probably the biggest thing on the forefront. We have to have a relationship with the Legislature, and we've got to have a relationship with our communities, because in the event that that goes away, it's going to be a very different world  providing services,” Lambrecht said.

LAMBRECHT ALSO spoke often about his goals for coordinated care under the new integrated health care system. He referenced how the Mayo Clinic coordinates care within their own system and with other hospitals around the country, and how he sees their operations as aspirational.

“You have to be able to coordinate every step. That doesn't mean just seeing the doctor, because those days are gone. I mean, health care is a team sport, and you have to be in all facets of that in the geographic distribution that we have. We've got to use all anchors of technology to accomplish that,” Lambrecht said. 

Consolidation is happening across many other industries. Glacier Bank President Mike Smith spoke on the panel about his experiences integrating with other businesses. Glacier Bank’s parent company Glacier Bancorp has acquired many other banks throughout the Northwest over the past decade.

 “With our business model being 17 banks with different names, 17 different boards of directors — we really focus on the community. Customers, employees and the community, we don't fall back on that,” Smith said. 

As Smith spoke about the initiative Glacier Bank employees take to volunteer in their communities, the conversation shifted to community engagement. As a nonprofit hospital, Logan Health is required to put part of its profit toward community benefit, and after a bill passed in this year’s legislative session, nonprofit hospitals in Montana will have to provide more specifics on how they spend that money.

According to its website, Logan Health put $80 million toward community benefit in 2022, which is divided among charity care, uncompensated care, subsidized health services and community building activities, among other categories.

Logan Health Foundation President Joe McClafferty spoke about different initiatives this hospital system supports, including a shoe giveaway as winter arrives and scholarships for schools to incorporate aspects of healthy living into their classrooms. 

“It's our duty to take care of our community. I believe that it's a duty we take with open arms and love — it’s not something we dread doing. And I believe that community benefit line and that philanthropic support line are becoming more aligned,” McClafferty said. 

Logan Health’s Medical Director and Lead Neurological Surgeon Dr. Thomas Origitano wrapped up the panel discussion by playing a clip of a patient at the hospital who benefitted from their deep brain stimulation program, where patients are treated for functional issues they have from conditions like Parkinson’s and Tourette’s. 

The clip shows a woman who has received an electrode implant to ease her tremors caused by Parkinson’s. Her doctor slowly turns off the implant, giving way to her tremors.

The demonstration shows how big of a difference the technology has provided for her quality of life, and Origitano said watching the clip always makes him emotional.

“I appreciate the health system for providing the eclectic environment that allows us to do these extraordinary things every single day. As a clinician, that's an amazing place to work,” Origitano said. 

Origitano also led the first panel discussion, which featured Primary Care and Women and Children’s Service Line Executive Director Rhonda Tallman and Pediatric Specialist Dr. Courtney Paterson. They tackled topics like how doctor compensation is calculated and what it means to be a level 3 trauma center, among others. 

McClafferty said Logan Health officials would like to hold more public events where people can learn about health care. 

Reporter Taylor Inman can be reached at 406-758-4433 or by emailing tinman@dailyinterlake.com