McGrath Decision Upholds DOJ Monitoring of Benefis Healthcare
HELENA – In a decision released today, Montana Attorney General Mike McGrath upheld Department of Justice oversight and monitoring of inpatient hospital services at Benefis Healthcare in Great Falls. In the decision, McGrath found that “there is not sufficient evidence to conclude that increases in competition have eliminated the need for regulation over inpatient hospital services.”
In 1996, the Department of Justice approved the merger of Columbus Hospital and the Montana Deaconess Hospital to form Benefis Healthcare, finding that consolidation was likely to result in lower health care costs or improved access to health care or higher quality health care without any undue increase in health care costs.
The department’s approval of the Benefis merger came with extensive conditions including regulations to ensure that savings from the merger were passed on to consumers, and that both the scope and quality of services previously offered by the two hospitals were maintained.
McGrath’s decision noted that the Certificate of Public Advantage (COPA) issued to Benefis in 1996 was designed to control health care costs and improve both the quality of and access to health care.
The COPA also contained a provision that the Department of Justice conduct a review within 10 years of the effective date of the COPA to determine the extent to which the terms and conditions should be maintained, modified, amended or repealed.
In April 2006, Benefis proposed dissolving the COPA and ending the attorney general’s oversight, citing the increase of providers in competition with Benefis in the market for medical care in north-central Montana. The Department of Justice held a public hearing June 27 in Great Falls, and a public comment period closed in July.
Statistics provided to the DOJ by Blue Cross Blue Shield confirm that, during the nine-year period following implementation of the COPA, Benefis’ net prices have been consistently lower than the prices charged by the three other large hospitals in Montana. During that same time, Benefis has maintained healthy profit margins.
“That solid financial performance (and the substantial capital renovations and technological improvements made by Benefis during the past nine years) demonstrates that the COPA has not prevented Benefis from successfully responding to increased competition in the past,” McGrath wrote.
McGrath agreed with the hospital’s assertion that there have been “significant increases in competition for certain health care services provided by Benefis” and noted that the DOJ will continue to monitor competitive developments that may justify the modification, amendment or repeal of the COPA.
“Such action may be necessary in the future due to the rapidly changing health care services market in Great Falls,” he wrote.