Medicine Students in WWAMI Program

Dr. Colette Kirchhoff, center, instructs students Evan Decan, center left, and Aaron Koster during a WWAMI foundations of clinical medicine class at Bozeman Health Deaconess Hospital on Thursday.

Montana hospitals lead the state in wages and jobs, according to a study released Tuesday.

The Bureau of Business and Economic Research study showed Montana hospitals employed more than 24,500 people in 2017.

Those jobs came with larger paychecks than what’s typical in Montana. The average private sector wage in Montana is $40,981. For hospitals, that number is $61,444.

“Health care in general, and hospitals in particular, are at the heart of every regional economy in Montana,” said Patrick Barkey, director of the Bureau of Business and Economic Research.

Boiled down, Montana hospitals created the second largest number of jobs in the state and came out on top for total annual wages out of 84 sectors.

The data came from the Montana Hospital Association and the 2017 American Hospital Association Annual Survey.

Barkey said the hospital association reached out to the bureau to ask for the update to a 2013 study.

Like in the past, hospitals’ impact goes beyond their walls and paychecks.

The ripple from the business of hospitals led to nearly 61,000 private sector jobs economy-wide. Montana’s hospitals are responsible for almost $10 billion in total output — $4.7 billion in gross domestic product and $5.9 billion in value funneled into Montana’s economy.

Rich Rasmussen, president and CEO of the Montana Hospital Association, said the study shows hospitals serve as a backbone industry especially in rural Montana.

The study defined the state’s “extremely rural economies” as fewer than 3,000 private sector workers.

Eighty-two percent of Montana counties that fall into that statistic have a hospital. The study estimated most account for almost 10% of the private employment base.

“Our community hospitals support more jobs and more wages than any other sector in Montana, and are a major factor in their town’s ability to attract and retain businesses and residents,” Rasmussen said.

He said while there are high-paying jobs in hospitals — positions like surgeons or top administrators — that’s not the area the industry has seen the most growth. As hospitals have expanded to meet the state’s needs, Rasmussen said that’s typically created more positions in direct-care like nurses or assistant personnel.

Report author Gregg Davis said hospitals’ overall growth in employment and payroll was the biggest change he charted since the last study.

He said some pieces, like “the pretty good bang for the buck” from Medicaid dollars, stayed consistent.

Medicaid funds to Montana hospitals alone account for 12,000 jobs statewide.

His work also looked at how the math plays out when government dollars toward the hospital sector slips.

For every $100 million in Medicaid funding received or foregone, 1,366 jobs are added or lost from the Montana economy along with $69.1 million in personal income.

Davis said there are challenges for hospitals when it comes to payments, both from government and private sources.

In November 2017, Montana lawmakers were called back to Helena to balance the state’s budget.

That led to $22.6 million cut from the state’s reimbursement rates for hospitals and other health centers providing care to Medicaid patients. A chunk of that funding was eventually restored, though the wave shows the inconsistency that can come with government dollars.

The federal match for Medicaid can also change.

Rasmussen said challenges include patients who can’t pay bills and the resulting care hospitals provide without collecting money.

That uncompensated care dropped across the state when Montana expanded its Medicaid program that qualified more people for the government-supported coverage.

Rasmussen said hospitals aren’t counting on Medicaid expansion as a certainty. Earlier this year, lawmakers reauthorized the program, adding new requirements for participants and setting an end date of 2025.

Katheryn Houghton can be reached at khoughton@dailychronicle.com or at 582-2628. Follow her on Twitter @K_Hought.

Katheryn Houghton is the city government and health reporter for the Bozeman Daily Chronicle.

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