In McMinnville, it's been like a fairy tale.

Byline: Diane Dietz The Register-Guard

THE CORPORATE hospital story in McMinnville is one of starting low and aiming high - and apparently exceeding the town's expectations.

By the early 1970s when the first outside owner bought McMinnville's 40-bed community hospital, it was a sprawling mess: a patchwork of additions, some seven decades old.

The hospital's reputation had sagged so much that 65 percent of McMinnville residents headed for Salem or Portland when they needed hospital care, according to the hospital's own estimates.

"It was an ugly old hospital," said Dr. Craig Thornton, chief of staff for the past two years. "It was like, `I ain't going to go to the McMinnville hospital. It looks like you could die there.' '

In 1994, CEO Rosemari Davis - who had just arrived from Oklahoma - got approval from parent company, then Columbia/HCA Healthcare Corp., to build a new hospital for McMinnville.

She found a 35-acre chunk of grass seed farm straddling the urban growth boundary in southeast McMinnville and began planning the $45 million Willamette Valley Medical Center.

Davis, a nurse-turned-CEO, had a major hand in designing the McMinnville hospital, which the Triad Hospitals chain bought in 1999.

She placed the emergency room next to the intensive care center so critically ill patients don't have far to go when they're admitted - and emergency room doctors are close at hand when an intensive care patient needs life-saving measures.

The birthing center features 500-square-foot labor rooms with hardwood floors, sleeper sofas for family members and full tub-and-shower bathrooms. Three out of four rooms have Jacuzzis for mothers in hard labor.

"The water is kind of a comfort measure," said Chloe Dixon, who recently gave birth to 5-pound Sofia Elena at the hospital.

Designing a hospital from scratch was a luxury, Davis said, and it's one McKenzie-Willamette Hospital in Springfield will enjoy if the Triad deal, announced a week and a half ago, closes this summer as expected. It would create a joint venture for-profit hospital, with Triad as the major partner.

McMinnville doctors and technicians say that Triad buys decent equipment, if not the latest and greatest devices.

In October, for instance, the hospital opened a $5.5 million, 8,000-square-foot cancer center with a Clinac 21EX linear accelerator that can pinpoint and zap a tumor while damaging very little of the surrounding tissue.

The hospital has to keep its equipment updated, Davis said. "If you want the best doctors you've got to provide them with the best tools," she said. "We're constantly looking at and staging when we'll do replacement."

Healthy profit as market grows

McMinnville is growing and so is Triad's market share. The population has increased 3 percent a year while the elderly segment is growing at 7 percent, census figures show.

And now that the hospital is a handsome mauve brick building, 77 percent of community members choose to stay in McMinnville for hospitalization, Davis said. "We're real proud of that," she said.

The hospital - the only player in town - also has been a good moneymaker for Triad.

Since it opened, it has generated annual profits as high as 12 percent of revenues. That compares in recent years with 3 percent at McKenzie-Willamette and 6 percent at PeaceHealth, which owns Sacred Heart Medical Center in Eugene.

Triad has made itself a thoroughgoing member of the community in McMinnville.

Davis concentrates on external relations, serving as chairwoman of the town's nonprofit after-school activity effort and is a perennial member of the McMinnville Chamber of Commerce board.

The hospital put out $85,561 in cash contributions last year for community activities, with roughly half going to nursing scholarships and the other half going to civic projects from tourism promotion to the annual Turkey Rama Turkey Trot 8K Run.

The hospital also supplies charity care and opened a clinic to handle overflow of uninsured patients who were seeking primary care in the emergency room.

The hospital wrote off $2.9 million in charity care and bad debt last year - amounting to 5 percent of the hospital's net revenue, hospital records show.

It hired a doctor and nurse practitioner for the new clinic and is looking for a second nurse practitioner.

The operation, which opened in July, can treat 65 patients a day, said clinic doctor Jim Molloy.

"I don't know how many hospitals, period, that would go to this extreme," Molloy said. "The hospital didn't have to do anything."

Triad also has gotten along with city hall. Although it's part of a national operation, Willamette Valley has never thrown its weight around with local city staff, McMinnville Planning Director Doug Montgomery said.

"They followed through with what they said they would do and have been a great citizen ever since," he said.

Good workplace atmosphere

Triad management in McMinnville also has been stable. Davis, who talks in the Southern cadences born of her years in Missouri, Alabama and Oklahoma, has been on board since 1994. Both of her grandchildren were born at Willamette Valley. "We'll definitely retire here," she said.

Employees and doctors credit Davis for creating a good workplace atmosphere.

Overall satisfaction among hospital employees is 97 percent, according to the latest annual survey by Data Management and Research, a firm hired by Triad.

Job fulfillment and optimism ratings are high, but the hospital falls down a bit when it comes to pay and benefits, with 76 percent approving of their pay and 65 percent satisfied with their benefits.

Davis knows the names of almost all the 450 employees, and she strolls through the hospital greeting them easily.

"This person cares a lot whether people are happy here - that's the truth," said birthing center nurse Lynn Stark.

Doctors who practice at the medical center seem equally enthused. Their overall satisfaction level, measured by the same firm, is 99 percent.

If pressed, the only criticism that doctors seem to have is the cost of care. "Prices are probably on average a bit higher than other facilities," Thornton said.

"They're experts at maximizing their return. There's not much to say. You've got to make a profit. If you don't make a profit you're gone."

Davis, however, disputes the doctors' claim.

"If you ask anybody, they'll say health care is expensive. And you know what? They're right. It is expensive," she said.

But Davis said she is constantly comparing the McMinnville hospital's prices with those charged by hospitals in Salem and Portland, and "we're right there in the middle," she said.

Predictions for Springfield

So, what kind of experience will Eugene-Springfield have with Triad? Will it be easy like McMinnville or tough like Roseburg, where Triad closed Douglas Community Medical Center. Will the hospital profit or fail?

Triad plans to spend $80 million to replace McKenzie-Willamette with a new hospital somewhere in Eugene/Springfield and then allow it to start its existence debt-free.

Triad CEO Denny Shelton said the new hospital will have every treatment or service necessary to keep it competitive with Sacred Heart and any other medical provider in the area.

Davis said the new venture should prosper.

"As best as I can determine, in Eugene, people desire two hospitals," she said.

"They believe competition is good and there's plenty of population to support two hospitals and have them be viable, and choice is important to folks."

That wasn't the situation in Roseburg, she said.

"Triad came to Roseburg at the very end of its struggle. I'm a Pollyanna. I like to think it's never too late if you try hard enough you can make it happen. We tried hard, but we couldn't make it happen."

Success depends on local managers, she said. That's McKenzie-Willamette CEO Roy Orr, who will run the new hospital.

"Local autonomy is very real. I can't stress that enough, especially given Eugene's anxiety - if that's the right word - about corporations," Davis said.

"I would urge Eugene to not think in terms of Dallas, which just happens to be the corporate headquarters, but look to the local management as truly Triad."

Dr. Gordon Banks, a McMinnville neurologist, said Eugene-Springfield has nothing to fear from the for-profit hospital company.

"Triad is fine. The key is finding somebody like Rosemari," he said.

"If Triad has somebody good down there, you'll have a great hospital."

CAPTION(S):

Kelly Easterday of McMinnville takes advantage of the walking path that is open to the public on Willamette Valley Medical Center property. "A whole group of us come here from work," said Easterday. "It's lit and it feels safe." The hospital received $250,000 from Triad Hospitals Inc. for being named top hospital and used some of the money for the employee-requested path. Please turn to TRIAD, Page A8