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Update on BDHS Planning & Feasibility Analysis for Big Sky Medical Facility

February 19, 2013

Graphic: Big Sky Health Park Concept Plan - digital rendering of schematic design

Planning Activities from 2003-2013
For the past 10 years Bozeman Deaconess Health Services (BDHS) has facilitated discussions with various resort managers, key business leaders, and health care providers as well as conducted periodic market research as part of an ongoing feasibility analysis and assessment for expanding healthcare services in Big Sky.

2003
  • BDHS conducted a market survey of Big Sky residents to determine healthcare needs.
  • The primary need identified by residents was a pharmacy, as the community had been without a one for a few years. In addition, residents responded that their medical needs were sufficiently being met by the Big Sky Medical Clinic operated by Dr. Daniels and Bozeman Deaconess as their local community hospital.
2004-05
  • In response, BDHS developed and opened a retail pharmacy in Meadow Village Center in the winter of 2004-05. BDHS continues to operate the Big Sky Pharmacy and subsidizes its operation for the benefit of community residents and visitors. 
  • In 2005, BDHS conducted meetings with Fire Department, EMS, and ski patrol personnel and management from Big Sky's five resorts (Big Sky Resort, Moonlight Basin Resort, The Yellowstone Club, Spanish Peaks Club, and Lone Mountain Ranch) and submitted proposals for joint collaboration on development of a centralized medical facility that would provide 24/7 emergency medical care at a higher level than urgent care. At that time Big Sky had experienced a 17% growth rate with continued growth projections and forecast resort build out at an aggressive pace. The permanent resident occupancy rate had grown from 32.7% in 2000 to 35.0% in 2005. The population was 2630. 
2006-07
  • Due to this growth as well as data from periodic physician needs assessments, Bozeman Deaconess began planning for ways to meet future healthcare needs and began searching for an appropriate location for a future medical facility that was anticipated to be needed sometime within the next 10 years. 
  • Consensus among resort representatives was Big Sky Town Center was a practical location as it was centrally located and in the direction of typical emergency service traffic flow from the resorts toward Bozeman. BDHS also met with Dr. Daniels on a regular basis, as he is a long standing medical provider in the community so that his perspectives were included as part of this planning effort. 
  • Bozeman Deaconess worked with the Big Sky Town Center owners and Gallatin County planning staff to classify land uses and zoning for commercial and public/quasi-public uses for a future emergency and medical facility in Town Center. 
2007
  • In August, BDHS purchased a parcel in Big Sky Town Center for a facility. 
  • Following acquisition of the land, BDHS began the planning process for providing a model facility that would be viable and sustainable for Big Sky that would include emergency medical and related ancillary and support services. 
  • The Big Sky Health Park concept plan was based on a freestanding Emergency Department model that would fit within the Montana licensing category of a Critical Access Hospital. 
  • The objective was not to replace or duplicate the urgent care practice of the Big Sky Medical Clinic, but to provide a higher level of service that was uniquely designed to serve the needs of rural resort communities such as Big Sky. 
  • A key consideration was to address opportunities to enhance and support the existing coordinated mutual aid system of medical control and provide support service to the independent first aid stations within the resort areas, ski patrols, and EMS/paramedic services. 
  • BDHS had developed a collaborative plan for funding the construction of a building and developing an operating endowment to offset operational shortfalls until such time that the medical facility would become self-sustaining. BDHS sent proposal requests to all resorts and key investors in the community seeking support and financial commitment for this endeavor. 
  • BDHS conducted a survey to measure the support throughout the community for a philanthropic campaign to launch the medical facility project. Response was lukewarm, since at least four other fund raising campaigns were underway in the community at that time. The general public felt that for this to succeed it would need support from the resort community. 
2008
  • The financial collapse of 2008 affected everyone. Population declined in Big Sky, construction ceased, employers reduced programs and workforce, and capital investments were delayed. 
2009
  • BDHS engaged a national consulting firm specializing in startup, turn around, and financial management of rural and Critical Access Hospitals as an independent objective third party to evaluate the market, critique and further develop the financial proforma that had been developed by BDHS, review and test the operational model, and generally address the question if not now, when might a medical facility be a viable option for Big Sky?
  • The analysis and financial proforma concluded that viability of a freestanding medical facility in Big Sky was driven by full-time resident population, even when considering tourist and seasonal activity fluctuations. For example: growth of year-round residents to 3500 population improves the operating performance of a medical facility by approximately $1M annually, however still only reached financial break even. 
  • Financial projections are based on assumptions of the services offered and operating model. No local tax support was assumed in the forecast. It is estimated that with current resident and visitor population, a medical facility would likely take five to seven years to be fully sustainable from operations. 
  • Viability and sustainability are critical considerations, as maintaining quality healthcare services with fully trained and certified health professionals is the goal. 
Further Market Developments since 2010
  • Big Sky now has three established medical providers with Drs. Daniels, Coil, and Dunn.
  • Summit Air Ambulance is now operating and providing helicopter transports in the regional service area. 
Next Steps
  • BDHS is updating the Feasibility Analysis and Financial Proforma for 2013 (anticipated to be concluded later this spring) to incorporate market changes that have occurred since 2010 and to validate reimbursement assumptions given anticipated healthcare reform impact. 
  • This will include updated market analysis and revised financial projections as well as interviews conducted with medical providers and key stakeholders in Big Sky to assess changes in the past three years and to what extent those changes may impact healthcare development. 
  • Bozeman Deaconess has invested its efforts on behalf of the Big Sky community and will continue to do so. 
  • BDHS has purposely been cautious about premature development hoping the community would grow into the size needed for viability and sustainability. We've not moved ahead as our concern is that a freestanding facility is not yet sustainable and to do so would consume community resources unnecessarily and impede future opportunities for success. 
  • However, a Big Sky medical facility will require a community collaboration and charitable partnership, and Bozeman Deaconess Foundation is well positioned to begin that effort at whatever time is deemed appropriate. 
  • Bozeman Deaconess recommends a balanced approach. With pooled resources and access to the bench strength of Bozeman Deaconess Health Services, we could work together to bring high quality healthcare services to the residents and guests of Big Sky without huge financial drain from any one source.
  • By investing together we can accomplish more in a viable way, and achieve consistent sustainable services for the Big Sky community.

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