Billings Health care a pillar of regional economy

When health care was young in Billings, a wooden plank over a muddy ditch led to the
new hospital.

By JAMES HAGENGRUBER
Of The Gazette Staff

Not that landscaping mattered to a typical patient – a poker cheat on the receiving end of
a Colt Peacemaker, a mother carrying her mule-kicked son, a railroad switchman with a
mangled arm. It was 1899 and the 3,000 people of Billings were happy to finally have a real
hospital.
The sick and hurt approaching the new brick building could smell wood smoke from the sheets boiling in
black cauldrons outside. They could hear clucking from the hospital’s hen house. They could see nuns clearing
brush from the yard.
They hoped to find cure and relief from pain.

Today, people visit hospitals in Billings for the
same reason. Nearly half the patients come from
outside the county, some driving hundreds of miles
hoping the best care will be found in a city with the
largest concentration of medical care in Montana,
Wyoming and the western part of the Dakotas.
They enter the medical corridor, which sits on 18
city blocks, with two hospitals, 450 beds, about 6,000
health care workers and life-saving technology that
ranges from three-dimensional fetal scanners to
helicopters capable of rushing over windswept prairie
at 150 mph.
There’s no more wooden plank in front of St.
Vincent Hospital. The hospital now spends $10,000
each month on landscaping for its 53-acre downtown
campus.

As the hospitals have grown in Billings, so to has
their importance to the regional economy.
One out of every 10 workers in Yellowstone
County is now employed in health care – a sizable
difference from the 6.6 percent statewide and 6.9 percent of the labor force nationwide, according to 2002
estimates prepared by Scott Rickard, an economist for the Center of Applied Economic Research at
MSU-Billings.
The jobs pay well, too. The county’s estimated 7,118 health care workers earned an average $27,400 in
annual salaries, well above the $20,172 earned by the average Montanan.
Health care, which include everyone from brain surgeons to nursing home assistants, now contributes
about $190 million in wages to the local economy. About 80 percent of those health care workers are employed
in the corridor, placing Deaconess and St. V., among the top employers in the county.
Local job growth is expected to continue in the health care sector at a rate of 2.25 percent per year,
according to Rickard’s analysis.
As health care continues its trend toward specialization, both hospitals in Billings also expect to capture
more business. This means more office space, operating rooms and parking areas will be needed.
"Within the existing corridor there will be significant new development," predicted Dr. Nick Wolter, chief
executive officer of Deaconess Billings Clinic.
This year’s construction projects include an expansion of the Yellowstone Medical Center, a new
Deaconess research facility and the Yellowstone Surgery Center. The projects are worth about $20 million and
will add 121,000 square feet of medical office space to the corridor.
The city created a special zoning district for the medical corridor in 1986. Both hospitals helped write the
regulations, which require an extensive city approval process for any new development and the most strict
landscaping standards in the city.
"This has been a good thing," said Rod Schaffer, director of facility services for Deaconess. "It keeps the
integrity of the district intact. It avoids shoddy zoning."
Both hospitals have tidy, well-landscaped campuses. The high standards not only protect the value of the
property, but also play a role in healing, Wolter said.
"There’s a fairly strong movement in health care that looks at the relationship between health and beauty,"
Wolter said.
The three-block-wide corridor runs from Seventh Avenue North to MSU-Billings. Eleventh Avenue North
serves as an informal boundary between Deaconess and St. Vincent Healthcare. Some jokingly refer to the
competition between the hospitals by calling this street the demilitarized zone.
The hospitals long ago began buying up land from residents in the once-quiet neighborhood. A good
portion of the land is now devoted to more than 3,000 parking spaces. Although both hospitals have more than
enough parking spots to meet city codes, a lack of easily accessibly parking is typically the top complaint by
patients and employees, officials from both hospitals said.
"It’s more a question of having adequate parking in the proper location," said Dan Poling, facility
development coordinator for St. Vincent. "You could have 2,000 parking spots, but they need to be right where
the patient needs to be."
Valet parking is one way hospitals are trying to make parking more convenient. There have been
preliminary discussions between hospitals over building a 600-space multi-level parking garage for
employees, Schaffer said. This garage would cost about $7.5 million, but would free up additional prime
parking spots for patients.
Because most of the land is already taken, future development in the corridor will likely be vertical, Schaffer
said. Billings Clinic, for example, was engineered with the ability to add four floors.
"We’ve used all of the surfaces up that we can," Schaffer said.

Health care has long been recognized as an important part of Billings’ economy. When the Sisters of
Charity of Leavenworth opened the city’s first hospital in 1899, The Gazette editorialized "the hospital will be the
pride of the city and its people."
The original hospital was located near the present-day Billings Central Catholic High School. St. Vincent
moved into its new five-story building Nov. 6, 1923. Photos from the period show a graceful building with the
Rims in the background and, in front, a long swath of grass stretching toward the railroad tracks.
When the 67-bed, Deaconess Hospital opened June 30, 1927, The Gazette hailed it as an aid in making
Billings the "medical center for the Midland Empire." An accompanying story detailed every feature of the
modern hospital, including its "automatic elevator" and special areas outside of operating rooms where a
surgeon could "smoke a cigarette and take a shower bath after the task is completed."
The hospitals expanded with the city. But the growth seemed to spurt beginning in the 1970s. Radical new
procedures were being performed in Billings, including open heart surgeries. Rural hospitals couldn’t afford all
the technology and staff needed for the increasingly specialized world of medicine.
Even with the oil bust of the early 1980s, the hospitals in Billings kept growing. There has been some
temporary slowdowns, but the growth is likely to speed up in coming years as the baby boom goes gray, Wolter
said.
"We’re starting to read a number of trends that suggests we might need to add to the number of beds," he
said.

Although most of the state is suffering from a shortage of nurses, both hospitals say their size allows them
to pay relatively high wages. St. Vincent, for example, has less than a 10 percent vacancy rate for nurses, said
Hal Anderson, vice president of human resources.
"We’re drawing in nurses from all over the nation," he said. "We’re not hearing any squawking about
wages."
With strong health care organizations, Billings will be better able to weather economic swings, said Mike
Wagner, senior director of The Health Care Advisory Board, a Washington, D.C. consulting firm that tracks
economic trends for 2,500 hospitals across the nation.
Health care "is actually an excellent source of economic development," Wagner said. "It’s very stable. It’s
very good for an economy. It’s relatively recession free."
Wagner was in Billings recently to discuss growth patterns with Deaconess. Although large challenges lay
ahead for hospitals in Billings – at the top are Montana’s high rate of people without health insurance coupled
with a continued rise in health care prices – the future looks bright for regional medical centers, Wagner said.
"There’s been a resurgence in demand for hospital services," Wagner said. "We think that’s going to
continue."
The bottom line, though, is still about hospitals being a place to find cure and relief from pain. People in
Montana are willing to travel long distances to find specialty medical care in Billings.
And, distance is part of life in Montana, said 64-year-old Doris Hastig. Although the Baker widow depends
on her local physician for primary care, she had both of her hips replaced at St. Vincent Healthcare. The most
recent operation was on Feb. 6. She spent 16 days in Billings at the hospital and the rehabilitation facility.
"I just feel fortunate that we have the medical facilities," Hastig said. "I know it’s 230 miles. I feel fortunate to
have it this close."

A brief explanation of the city’s medical corridor

Why does Billings have two hospitals?

Because diseases and injuries in Montana’s Big Open are twice as bad as anywhere else. Just
kidding. Actually, many towns have two or more hospitals – Fargo, Boise, Bismarck and Missoula, to
name a few nearby. Some say competition raises quality by motivating the hospitals to attract patients
by being the best for the least money. Others say it causes costly duplication of services (air
ambulances, CT scanners and maternity wards aren’t cheap). Apart from issues of cost and quality,
most people like the thought of having a choice.

How good is the health care in Billings?

Would you rather have a surgeon who has done 12 open-heart surgeries or one who has done
75? Billings is a major medical center – easily the biggest on the High Plains – and the 417 doctors in
Yellowstone County get a lot of practice. That must mean something. Every day, there’s an average of
3,000 "patient contacts" at Billings’ hospitals. Some of the nation’s best medical minds have come to
Billings because of the quality of life. On the other hand, the most innovative medical care usually
comes out of teaching hospitals.

What don’t we have here?

Scores of fumbling, tired medical residents roaming hospital corridors eager to practice
blood-letting techniques they learned only the week before. Billings also lacks a burn unit, highly
specialized neonatal surgeons and a transplant center.

Which hospital is better?

Can you hear the newspaper crackle as the hospital administrators read this? On the record,
executives and doctors gently smile and reply by saying both hospitals are excellent and, combined, the
community gets great care. When the notebook is put away, a slightly different answer is usually given
and the smile begins to look more like a smirk. Perhaps the only accurate answer comes from
patients. Medicine is still based on a special relationship between physician and patient. Almost
without fail, each patient thinks their hospital and their doctor is the best. They’re right.

Are the hospitals any different?

Each claims to have a philosophy/mission/mandate that makes it distinct. Both are non-profit. St.
Vincent is run by the Kansas-based Sisters of Charity of Leavenworth and a local board of directors.
Deaconess has roots with the Methodist Church, but is independent and run by a local board of
directors. St. Vincent forms affiliations with independent physician groups. Deaconess is a
wholly-integrated model and employs about 175 doctors. With its new research facility, Deaconess
likens itself to a Montana version of the Mayo Clinic. St. Vincent officials like to stress their timeless
mission to provide the best health care to all regardless of the bottom-line. In reality, both are full of
amazing technology and each spends more than $4 million a year on charity care.

Is there much competition?

It might not be obvious, but it’s definitely there. It shows between hospital administrators up in the
weekly drag races in dark parking lots and occasional cage wrestling matches in the cafeteria. That
was a joke. In all honesty, the competition is real. There’s a limited number of patients, less federal
funding and tight operating margins. Watch for competition to get stronger in areas of heart care,
orthopedics and outpatient surgery.

So, how do they compete?

Both organizations have large advertising and promotional budgets. Both compete for scarce
nurses, doctors and other skilled medical staff. Their foundations also compete for scarce
philanthropic dollars and federal grants. Most of the competition is behind the scenes. Both hospitals
depend on referrals from outlying physicians and both are busy developing affiliations and partnerships
with regional clinics. It’s illegal to buy referrals, but that doesn’t mean hospitals can’t be nice. The
hospitals also compete for business from insurance carriers by negotiating price rates for certain
procedures.

Which hospital is cheaper?

Hard to say. There are hundreds of procedures, each with a different price. A Montana-based
insurance business claims both hospitals in Billings are among the most expensive in the state and
prices keep going up. This same company likes to point out that procedures in Great Falls are usually
less expensive than Billings.

What’s significant about Great Falls?

The 1996 merger of Great Falls’ two hospitals was meant to cut costly duplication, administrators
of both hospitals promised at the time. The cost of having two of everything added $10 million a year to
patients’ medical bills and amounted to a "two-hospital tax" on local residents. Shortly after the merger,
operating costs were lowered by $4.3 million, prices were reduced an average of 17 percent and jobs
were cut, including one-third of top management.

Was this a good thing?

Depends who you ask. It would take volumes to explain the intricacies of the merger. Some say it
created a monopoly and stifled competition. Others say it brought sanity to a medium-sized medical
market. Benefis Healthcare is now asking the state to relax some of its oversight regulations.

Could a merger happen here?

Don’t expect a St. Deacontent anytime soon. The hospitals have very different cultures and styles,
which would be difficult to combine. Both hospitals are also doing fairly well financially. That being said,
both are scrambling to deal with rising health care costs, a large number of uninsured patients and
increasing demand for services. If the hospitals don’t find a solution, the government might lend a
hand. Watch for more collaboration and joint-ventures to save costs. One thing is certain: Health care
and medicine is changing fast. Extremely fast. Only a fool would try to predict the future of health care in
Billings, or anywhere else.
— James Hagengruber

http://www.billingsgazette.com/index.php?tts=1&display=rednews/2002/03/24/build/local/55-corridor.inc