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New NCMC Head Ready, Willing to Compete

July 27, 2008

By Nate Miller, Greeley Tribune, Colo.

Jul. 27–Rick Sutton is ready to compete — The 44-year-old who is in his third month as chief executive officer of North Colorado Medical Center assessed the region’s largest hospital and its market in the same blunt, driven style that brought him there.

“We are going to be the medical leader,” he said during an interview in a pristine office at NCMC on a bright July day. “We have the technology, we have the beds, we have the physicians, we are just going to have to orchestrate it.”

In Sutton’s vision, northern Colorado doesn’t mean just Weld and Larimer counties, it means the Front Range north of Longmont — in short, the northeast quadrant of Colorado and possibly parts of Wyoming, Nebraska and Kansas.

This drive is all part of an emerging trend in northern Colorado. For a variety of reasons, northern Colorado — like many communities in the U.S. — is becoming more competitive when it comes to health care.

“Competition in health care’s not new, just new here,” Sutton said. “But I love it because when you have a competitive environment, it causes you to sharpen your skills and become the best that you can possibly be, or fail. That’s really where it goes. That’s really your two options.”

Three trends contribute to the emerging competition between Phoenix-based Banner Health Systems — which runs NCMC and Loveland’s McKee Medical Center — and Fort Collins-based Poudre Valley Health Systems, said Keith Moore, chief executive officer of McManis Consulting, a Denver-based health care consulting firm.

“Your communities are coming closer together, and they’re acting more and more like one big market instead of several smaller markets,” Moore said. “That’s why competition is coming to you now.”

Moore said the construction by Poudre Valley Health System of Medical Center of the Rockies near Centerra in 2006 changed the competitive structure of the northern Colorado market. He said this move out of Poudre Valley Health System’s traditional territory of Fort Collins represented the growing regionalization of the northern Colorado market.

Additionally, two nationwide trends are driving health system competition. Hospitals are increasingly becoming affiliated with health systems. Such affiliations helps hospitals control rising expenses by allowing them to more efficiently process tasks such as information technology, human resources and billing, Moore said.

“Think about the consolidation you’re seeing in banks,” Moore said. “Both have substantial costs in movement of information.”

Physicians also are becoming more closely affiliated with health systems, Moore said. The health systems can provide investment capital for technology that physicians need to stay on the cutting edge. This helps the physicians provide better care, Moore said.

IS HEALTH SYSTEM COMPETITION HERE YET?

For Rulon Stacey, president and chief executive officer of Poudre Valley Health Systems, Banner Health and his organization are not engaged in a competition for patients.

He said that prior to Medical Center of the Rockies opening on Valentine’s Day in 2006, Poudre Valley Health Systems projected that the hospital would serve a clientele that was largely different from NCMC’s patients because demand in the area was increasing.

“We were faced with the decision when we grow Poudre Valley Hospital, do we grow in Fort Collins or do we grow somewhere else,” Stacey said. He said Poudre Valley Health Systems decided to expand in an area where patients from around the region could more easily access health care. This decision led to the construction of MCR.

Stacey said research conducted prior to the opening of MCR indicated that the hospital would not take patients away from NCMC, but it would instead treat a growing regional demand for patients. Since the hospital opened, that research has proved accurate, Stacey said.

“It has gone off almost exactly as the predictions expected,” Stacey said.

Stacey said the growth by all the hospitals in the northern Colorado region in recent years has been driven more by the population growth in the region than by an effort to compete for patients.

“If the growth in northern Colorado were to stay stagnant for the next two or three years, that is not what we project, and that would alter our plans.”

Moore, from McManis Consulting, said the age of full-fledged competition between health systems in northern Colorado has probably not yet arrived. He said patients don’t have a direct choice — the way car buyers can pick between Ford or Chevy — but full-fledged competition is on the horizon.

“I still think if you’re in Greeley, and you have something wrong, you’re going to go to the Greeley medical center,” he said. “It certainly looks more like a competitive market than it did five or 10 years ago.”

NCMC’s Sutton said the hospital is well-positioned to compete.

“North Colorado Medical Center is the largest facility in all of northern Colorado,” he said. “As a matter of fact, North Colorado Medical Center is larger than all of Poudre Valley Health System.”

WHAT WILL COMPETITION LOOK LIKE?

Competition among heath systems is a relatively new phenomenon nationwide.

Moore said competition began the 1980s largely as a result of government policy aimed at using the free-market system to drive down health care costs.

Trent Skaggs, vice president of planning for the Kansas City, Mo.-based Health Management Consulting, said competition among health systems generally benefits patients.

“Hospitals don’t work like fast-food restaurants and gas stations,” he said. Hospitals work more like a car dealership. Customer service is paramount.

“You sell your first car to them, and then you sell your second car to them when they come back for the service,” he said.

Skaggs said hospitals nationwide also are finding it more difficult to attract the amount and type of doctors they need. He said cutting-edge technology is a large part of what drives the decision for doctors about where they work. According to an American Medical Association survey of doctors, there were two primary factors, Skaggs said.

“The first thing was, was their spouse happy,” he said. “The No. 2 thing is the facility. They want to be working somewhere where they are working with new technology.”

Sutton said he is aware that attracting top doctors is important for the hospital. He has made being physician-friendly one of NCMC’s top priorities.

“We want to make it easy for them, and efficient for them, to deliver health care,” he said. “They are delivering health care as the physician, but they’re counting on us to do a lot of these other things as far as, you know, actually carrying out their orders, and providing some of the tests and getting the results to them in order for them to be able to deliver the health care to this patient.”

Sutton said having a happy, committed work force is an important part of delivering top-notch care for patients.

“It’s a service,” he said. “Patients have choices.”

Quality care will ultimately determine where patients go, Sutton said. For this reason, he has set a lofty goal when it comes to quality.

“We don’t want to be just above national and state averages,” he said. “We want to be leading the country.”

Sutton said NCMC’s relationship with McKee Medical Center also is a competitive asset.

“We are going to work very, very closely with McKee Medical Center,” he said. “What we want to do is work collaboratively between the two hospitals in order to drive health care of northern Colorado to the next level.”

ENOUGH TO GO AROUND?

In the emerging environment of competition, it is important for NCMC to achieve and maintain high standards, or patients will go elsewhere, Sutton said.

“Either you’re going to succeed, and you’re going to sharpen your skills and become better, or you’re not,” he said.

For Sutton, competition is already a real factor in northern Colorado.

“It used to be Poudre Valley stayed in Fort Collins, McKee was Loveland, we took care of Greeley and there was kind of gentleman’s agreements and everybody stayed in their area, and we were all happy,” he said. “Then MCR came online in Loveland and, obviously, the gentlemen’s agreement lines are now gone.”

This changed the market in northern Colorado, which is now defined by full-fledged competition, Sutton said.

“Is there enough business for four hospitals in this northern Colorado area for everybody to be full? The answer to that is no,” Sutton said. “We are over-bedded in this area.”

Moore, from McManis Consulting, said while health system competition is emerging in northern Colorado, experience from markets that have been competitive for a long time indicates life can be difficult for health systems that aren’t successful.

“The distinction between winning and losing in hospitals is getting larger,” Moore said. “At a certain point, you want to get your health care from the winner.”

Moore said hospitals that struggle find it more difficult to get access to capital, while the successful health system gets better access. However, that is not a problem in northern Colorado.

“Your two major players are both highly regarded in the financial markets,” he said.

Sutton said he knows how to find success in a competitive environment.

“If you are not able to focus, and I mean focus like a laser, that this is the direction, that we’re not going to deviate, that we’re going down this path of excellence, you’ve got a problem,” he said. “A lot of times when you get in these competitive environments is you lose focus.”

Sutton said NCMC will focus on five priorities: employee engagement, high quality standards, patient satisfaction, being physician-friendly and being financially strong.

“If you have those five priorities locked and loaded, and you’re hitting home runs on those five things, where can you not be successful? Here, Loveland, Denver, Phoenix, you name it, you will be successful. You will lead the pack.”

Rick Sutton’s vision

North Colorado Medical Center has long had the vision of providing the best patient experience anywhere, Sutton said.

“I want to take the facility and it’s people to that level,” he said. “We’ve come up with what we call five priorities. They are five areas that we are going to hit home runs in no matter what.”

Sutton’s five priorities:

— Employee engagement

“I want 100 percent psychologically committed employees,” he said. “That’s what I want working here.”

— Patient satisfaction

“When we benchmark ourselves across the other hospitals in the United States, we want to be in the top 10 percent when it comes to patient satisfaction.”

— Quality

“At the end of the day, quality matters,” he said. “I can go to any hospital, but what I’m looking for is who has the best outcomes.”

— Physician friendly

“We want docs to say, when it’s all said and done, why would I go anywhere else to practice medicine other than North Colorado Medical Center?”

— Financial strength

“At the end of the day, we have got to be able to deliver a bottom line,” he said. “We have got to be able to continually re-invest in the organization.”

He said when all five priorities are accomplished, NCMC will be the pre-eminent hospital in northern Colorado.

“If you take those five priorities and are successful in all five of those, you can compete anywhere in the country,” he said.

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Copyright (c) 2008, Greeley Tribune, Colo.

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