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Chamber Breakfast Focuses on “Current State of Healthcare in the Region”
Montage Health CEO Dr. Michael McDermott was the featured speaker at your Chamber’s Quarterly Business Insights Breakfast this morning (May 26, 2026). When applying to Montage in 2024 to replace retiring CEO Dr. Steven Packer, Dr. McDermott was deliberately seeking to lead an independent, community-based non-profit health system that is accountable to the community rather than outside investor shareholders or distant corporate executives.
Accountability to the community is idealistic and desirable but also challenging. Montage is expected to fulfill community demand for universal, high-quality, cutting-edge, safe, accessible, personal, and locally-provided health care. It is also expected to supply all of this to users at a low cost. It has a current operating margin of 1.4 percent, which means that any unexpected shocks eliminate surplus funds available for Montage to invest in improving health care.
For many reasons, Montage has limited ability to influence costs. Dr. McDermott mentioned some of them: (1) a legal requirement to provide care to all people regardless of circumstances, including ability to pay; (2) the high cost of living in Monterey County; (3) a disproportionately high ratio of Montage users whose reimbursements are covered by government programs (such as MediCal and Medicare) rather than commercial insurance; (3) a national labor shortage for health care professionals that is also experienced on the local level; (5) recent substantial federal cuts in health insurance expenditures combined with federal policies that increase the number of uninsured patients; (6) inflation that increases costs for labor, medicine, and materials; (7) integration with a broad-based health care system that also includes government, commercial insurance, pharmaceutical companies, and device manufacturers.
Montage has little ability to save money by bluntly cutting costs. What it tries to do is make the provision of health care more efficient through a variety of programs and partnerships. For example, Montage continues to expand its network of local services for primary care, speciality care, and urgent care. It has developed partnerships with academic institutions such as Monterey Peninsula College (MPC) and Cal State Monterey Bay (CSUMB). It has taken advantage of technologies that reduce time between testing and analyzing results. It recently established a partnership with an academic medical institution, University of California, San Francisco (UCSF), for neurological and neurosurgical care.
Dr. McDermott provided a perspective from Montage that supplements and sometimes outright rebuts claims made by other parties about how to provide high-quality health care at a low cost. Your Chamber is wary of politicians and academics who always seem to have the simple and easy answers to fulfilling a fundamental human need. Contact Monica Lal at monica@montereychamber.com or at (831) 648-5359. if you have any ideas or comments about local health care.
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