Shot in the arm

Northwest Health Care breathes life into local economy

Northwest Health Care, the parent company of Kalispell Regional Medical Center, provides more than lifesaving services in the Flathead Valley. It transfuses millions of dollars into the economy that multiply into more jobs and businesses.

"KRMC is one of only two Class 9 employers, which means they have over a thousand employees, said Gregg Davis, an economics instructor at Flathead Valley Community College.

Plum Creek Timber Co. is the other payroll kingpin of the county.

As director of the Center for Business and Information Research, Davis keeps tabs on the area's economic underpinning. He said the hospital accounts for 5 percent of the private workforce in the county with wages 129 percent of the state average.

Of the 80 economic sectors Davis studies, health care ranks 14th in economic contributions.

"For every job the hospitals create, six-tenths of another job is created," he said.

Hospitals in general, and Kalispell Regional Medical Center in particular, also serve as magnets, drawing in patients from rural areas well beyond the county borders. As people come, they leave dollars in motels, restaurants and stores such Costco, Home Depot and Lowe's.

"They have a major impact on the area as a trading center," Davis said.

He added that cutting-edge medical facilities provide another less tangible but significant economic impact by making the area more attractive for relocation.

It holds particular significance for the nearly 78 million baby boomers who begin retiring next year.

"The two things baby boomers want are a university town and hospitals," Davis said.

With North Valley Hospital's new facility and the medical center's open-heart and cancer facilities, Davis sees the area well-positioned for a share of that market. He said this group now makes up a significant portion of the county's population.

"One-quarter of all the people in the valley are baby boomers," he said.

Jim Oliverson, spokesman for the medical center, makes presentations that shine a light on the long reach of Northwest Health Care including the medical center, The Summit and Brendan House.

"The hospital is a key driver in every community, kind of like the schools," he said.

OVER THE last several years, the medical center has shifted into high gear. Since 1998, the hospital grew from 682 employees to 1,317 today employed in 91 departments. They earned a payroll of more than $76 million in 2006.

"We're told that every payroll dollar expands three to five times in the economy," Oliverson said.

With all Northwest Healthcare facilities included, the number of employees jumps to more than 1,800, with projected payrolls over $86 million this year and in excess of $94 million in 2008. Oliverson said this number would easily double by adding support specialists (i.e. physical therapists) in the health-care sector.

Although organized as a nonprofit, Northwest Health Care contributed $428,409 in county property taxes in 2006 for various facilities.

For materials, supplies and miscellaneous services, the hospital spent $158.7 million in 2006. As a reflection of expected growth, officials have budgeted almost $177 million for this year and close to $191 million in 2008.

According to Oliverson, growth in specialists and procedures provides the most shock-and-awe during his community presentations.

From 1995 to 2006, 150 new physicians relocated to the community, bringing new specialties such as open-heart surgery and expanding areas like neurosurgery. As a result, the hospital performed 117 heart surgeries and 459 neurosurgeries in 2006.

According to Oliverson, patient referrals from Libby, Troy, Eureka, Cutbank and Browning helped make growth in high-tech programs possible. On any given day, 20 to 30 percent of patients have zip codes outside the county.

"If we were just Kalispell General Hospital, we wouldn't have a heart program," he said.

During orientations, Oliverson tells new employees that they serve an estimated population of 130,000 people. He emphasizes the importance of referrals to the medical center's economic health.

"Health care is not that mysterious," he said. "No matter what you do, you have fixed overhead that you have to offset."

The hospital needs to keep the volume of patients up to decrease the cost of fixed overhead for everyone.

Referral patients coming to the medical center set off a ripple-effect across the economy. Oliverson said each person coming to town spends locally about $70 during a one-day visit and $125 on an overnight stay .

Like other businesses, the medical center needs to attract new sources of revenue to grow and invest in technology. In the medical field, disease research changes technology at a dizzying speed, demanding new equipment and facilities to keep pace.

Since fiscal 2001, Northwest Health Care has invested more than $90 million in facilities and strategic partnerships (including $19 million from physicians). A new 3.0 magnet MRI represents a recent big-ticket outlay.

Keeping up-to-date with such technology helps the medical center recruit top specialists who have their choice of hospitals. Oliverson said a high-quality hospital combined with the Flathead's natural assets provides a powerful attraction.

It's the same formula that motivates other people to relocate here.

Oliverson recalled a representative from Iron Horse subdivision dropping by his office for brochures five to seven years ago as the high-end community was developing on Big Mountain.

"He said that, usually, the second question from people considering moving here is about health care," Oliverson said.

As an employee of Northwest Health Care for 25 years, Oliverson has seen the medical center's evolution during that time. He said the administration always has spent considerable time "future gazing" for areas of need in the community.

FROM HUMBLE beginnings in 1895, the hospital evolved from a two-story building on the corner of Fourth Avenue East and Center Street to a modern medical center on Buffalo Hill with emergency helicopter and fixed-wing air service.

Over the years, the medical center added Brendan House long-term care, The Summit fitness center, Pathways psychiatric care, the cancer treatment center, home health care, open-heart surgery and a cardiac cath lab.

A new modular medical/surgical wing represents the latest addition to cope with a greater than projected demand for beds in the Flathead.

"Our crystal ball was a little clouded," Oliverson said. "But, really, it's a good problem to have."

To divine the future, the administration taps Woods and Poole, a county forecasting firm in Washington, D.C., for population growth projections with demographic breakouts such as age and gender. Officials also gather information and growth estimates from many local sources, from schools to the airport.

"That data is critical as we are looking down the street 25 to 35 years trying to determine who will need what type of health care," Oliverson said.

He added that new drugs from the pharmaceutical industry represent another decision-making wild card that could revolutionize disease management and thus change facility needs down the road.

But in the near future, rocketing emergency-room demand and high bed occupancies make for good odds that Kalispell Regional Medical Center will continue helping grow the economy of the Flathead for years to come.

Reporter Candace Chase may be reached at 758-4436 or by e-mail at cchase@dailyinterlake.com