Great Falls Hospital Merger

At the request of counsel for the Montana Department of Justice (the "Department"), National Economic Research Associates, Inc. (NERA) has reviewed the public record relating to the application of two Great Falls hospitals to receive a Certificate of Public Advantage (COPA) from the State of Montana. This record generally includes the materials, dated October 2, 1995, that were submitted by the applicants (Columbus Hospital and Montana Deaconess Medical Center), various supplemental materials requested of the parties by NERA and the Department, numerous written public comments submitted to the Department, and oral testimony presented during public hearings held on January 24, 1996, in Great Falls. NERA was asked by the Department to report on two broad issues. First, NERA was asked to evaluate the projected cost savings claimed by applicants and, in particular, to examine the following specific issues: (1) whether the cost savings that the applicants claimed would result from the consolidation are, in fact, realistic; (2) whether those cost savings are achievable only through consolidation; (3) whether the merger-specific cost savings exceed any managed care cost savings that may be lost as a result of the consolidation; and (4) whether the projected cost savings will negatively impact operating room capacity.