Bradley Beams About New Digs

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Bill Bradley, CEO of Northwest Health System Inc., has tried out the toys at his company’s new $63 million hospital in Bentonville. That’s not limited to the $1 million General Electric Light Speed CAT scan or a dozen other leading-edge gadgets that make Northwest Medical Center of Benton County seem more like the Mayo Clinic than a regional hospital.

He has even had fun in the children’s play areas that are incorporated into waiting rooms throughout the 221,000-SF, 128-bed facility.

“They work, too,” Bradley said, pointing at a multicolored bead maze and a stack of blocks during a recent tour. “I’ve played with all them all.”

Bradley, 50, has a reason to be giddy.

Northwest Health, through four acquisitions and mergers since 1996, has become the largest health care organization in Northwest Arkansas by annually serving 308,000 patients. With three hospitals, 17 clinics, more than 350 physicians and a partnership with group-coverage network PremierCare Northwest, the system appears to have moved from the “ICU” to the “t-o-p.”

The system’s hospitals had 2001 estimated annual revenue of $213 million, up 8 percent from $198 million in 2000. Its patient volume has grown 25 percent since Bradley arrived in January 2000, and the system has recruited 44 new physicians with another 15-20 slated for courtship in the next 18 months.

The growth has enabled Northwest Health to serve patients from 17 counties in the four-state area. But Bradley said the goal was to be the best care giver, and that becoming the biggest is just a byproduct.

Struggling in the shadow of highly profitable competitors Washington Regional Medical Center in Fayetteville and St. Mary’s Hospital in Rogers, the management changes of the late 1990s (see timeline) had apparently bruised morale at Northwest Health. Bradley said it was time for a different kind of transformation.

“We refocused from all the change to what we wanted the situation to be and how we would get there,” Bradley said. “Instead of worrying about what others were doing, we started asking, ‘How do we go about doing our business?’ For a lot of people the self esteem of the organization is much better than it was because our focus is more progressive and on ourselves and our patients.”

‘HIP’ Facilities

Northwest Medical Center of Washington County — Northwest Health’s 383,627-SF flagship hospital in Springdale with 222 beds — has long been a magnet for local acute care. But it was clear that sister hospital Bates Medical Center in Bentonville needed an upgrade.

Bradley said the decision was made to build a first-class medical facility in Bentonville, and a group of local community leaders and staff were consulted. Their input resulted in extensive natural lighting components and functional designs such as locating intensive care and surgery or the emergency room and diagnostics close together. Bates’ name was also changed to reflect its new status as a “regional” hospital after the move to its new site near Interstate 540.

The ICU waiting area has its own courtyard. Elaborate security systems, infrastructure designed for easy expansion and oversized rooms stand out.

Other nice touches include photos of former benefactor Jack Bates and board member Sam M. Walton, and a Yamaha baby-grand player-piano treats guests to music in the lobby for 10 hours per day.

But the biggest design element requested by focus groups — privacy — probably mitigated some of the splurges. Bradley said private admitting stations and rooms helped the hospital comply with the costly Health Insurance Portability Accountability Act of 1996. He estimated that HIPAA compliance probably cost Northwest Health $150,000 systemwide, a bargain compared to other companies.

“The bricks and mortar just make it a nice building,” Bradley said. “The equipment gives us the capability of being a hospital. But what makes us a hospital is our people. The technicians, nurses, doctors and office staff are all committed to this organization.”

Willow Creek Women’s Hospital, a 98,000-SF, 30-bed unit on I-540 in Johnson, became the system’s third hospital last year.

Triad Touch

Despite being owned by publicly traded Triad Hospitals Inc. of Dallas, Northwest Health paid $1.5 million in local taxes last year. Triad had 2002 revenue of $3.5 billion and net income of $141.5 million ($1.89 per share).

With 3.7 million annual patients nationwide, Triad has 8,700 licensed hospital beds in 49 hospitals and 14 ambulatory surgery centers in 17 states.

Nancy Weaver, an analyst at Stephens Inc. in Little Rock, said what’s going on at Northwest Health is a reflection of Triad’s financial brawn and brains for stewardship. With three other major hospitals already in the area, it would have been easy for Triad to save any investment in Bentonville for its bottom line.

“But they like to go into middle markets and use their balance sheet, which means applying capital to the market place,” Weaver said. “They work closely with doctors and employers to meet their needs in a way that takes very good care of patients, but in a way that also earns a good return. That hospital is going to be a formidable competitor in that market.”

Bill Anderson, a division president with Triad in Dallas, said Bradley and his team have helped make Northwest Health “a dynamic health care system.”

“Bradley’s focus has been on developing a full scope of services, from north to south along [Interstate] 540,” Anderson said. “His vision, like Triad’s, is very physician-focused in terms of bringing community physicians to the planning table as we develop and expand those services.”

Industry Obstacles

Bradley predicts that aging “Baby Boomers” will continue to drive the health care business in coming years. That plays into another Northwest Health strength, he said, since its senior health clinics have gained a national reputation with eight fellowship-trained geriatricians on staff. And that number will likely climb to 12.

The organization is also committed, he said, to growing its nursing base so that it won’t be so hard hit when by 2020, estimates predict a shortage of 1 million nurses nationwide. Bradley said close communication with nursing staffs has helped improve retention to the point that the system only has about 20 positions open. Many health care organizations average double that in nursing vacancies.

Northwest Health combats one of the industry’s biggest problems, bad debt and slow payment for services, by offering “early-pay” discounts. And perhaps the biggest local obstacle faced by the system are contracts Arkansas Blue Cross and Blue Shield has with Northwest Health’s competitors. He said joining the Blue Cross network may be a possibility, but for now offering choices in the market is working well.

“Many do decide to be cared for at Northwest anyway,” Bradley said. “Where employees have choice, Northwest has faired well.”

To read more about Bill Bradley, clickhere.