A new report prepared for the Washington state Office of Trade and Economic Development concludes that the Spokane area has the potential to become the Northwest version of the Mayo Clinic, and that its a competitive site for biotech and biomedical manufacturing.


The report, released last month, was prepared for the state by the University of Washingtons Northwest Policy Center, and was in response to a recommendation from the Washington Competitiveness Council convened by Gov. Gary Locke. It looks at how various industries tend to cluster in different parts of the state, what advantages those clusters create for those geographic areas, and what might be done to strengthen them for the sake of economic development.


Though a host of industries were examined, six were chosen for detailed analysis, including health care, for which the report says Spokane, representing northeast Washington, stands out for its density and competitive proficiencies.


To identify such clusters, the study uses something called a location coefficient, which measures the relative concentration of an industry cluster in a region compared with its concentration nationally. The Spokane area was the only region in the state in which that coefficient indicated a greater density than that of the nation, which may signify a competitive advantage here, the report says.


It is great positive reinforcement that Spokane is indeed a biotech and health-care center, says Robin Pollard, assistant director of the Office of Trade and Economic Development (OTED). It is positive reinforcement to businesses and potential businesses locating in the Spokane area.


Adds Lewis Rumpler, director of biomedical technology at the Inland Northwest Technology Education Center (Intec), It upped the ante in terms of the importance of the health-care community as an economic engine here.


Rich Hadley, president and CEO of the Spokane Regional Chamber of Commerce, says, What they (OTED) analyzed is what weve known for a long time but sometimes as a community we dont pay enough attention to taking advantage of.


According to the report, health care accounts for one in 10 jobs in the northeast part of the state, which includes five counties but is dominated by the Spokane area. Though more specific figures werent included for the northeast region, the report shows that statewide, employment in the health-care sector grew about 28 percent over the past decade, to nearly 217,000 people, and that gross income from the sector totaled more than $13 billion in 2000, up 34 percent from a decade earlier. An aging population is a key factor in those advances, the report says.


It also says that despite significant financial pressures on the industry, there is more than $360 million worth of health-care capital projects under way in the Spokane area. Further, it says that as profit margins continue to make it difficult for health-care providers to maintain services in smaller communities, greater advantage will fall to regional centers such as Spokane, which will have to find effective ways to extend services into smaller communities using telemedicine, rapid movement of patients, and other strategies.


Spokane, the report says, is developing a regional competence in what is called informatics, a field involving the storage, retrieval, sharing, and optimal use of biomedical information, data, and knowledge for problem solving and decision making. Organizations in the Spokane area have been pioneers in linking the databases of hospitals and other health-care providers, which reduces data-entry costs, enhances sharing of information, and improves overall efficiencies, the report says. The collaboration among health-care providers here is noted as a strength by the report.


The Spokane area also has become a popular home for clinical trials of new pharmaceutical products developed elsewhere. Currently, several hundred such trials are under way here, a relatively large number for a city the size of Spokane, and reflects favorable demographics for this process as well as a deliberate strategy the area is using to build up a biotechnology industry, the report says.


The combination of those clinical trials, the informatics competency, and research centers such as the Heart Institute of Spokane and Washington State University at Spokane could aid the area in building a biotechnology cluster to complement the health-care cluster, it says. Though it doesnt mention them by name, the report also refers to the presence of such biotech manufacturers here as Hollister-Stier Laboratories Inc. and Biomedex Inc. as being factors in that strategy.


Still, Spokane falls well short of being nationally prominent on the score of medical research, says Tom Fritz, CEO of Inland Northwest Health Services, which oversees the collaborative efforts of Spokanes two main hospital groups, Providence Services Eastern Washington and Empire Health Services. He and other health-care executives and educational leaders here have begun studying what it will take to create the size of medical research institute will be required to attract significant research dollars and gain the reputation that research brings.


Fritz adds that proponents of such an institute arent satisfied with the community just doing clinical tests on discoveries made elsewhere, rather, they want some of those discoveries to be made here. A study is under way and expected to be completed this spring that will help research-institute proponents develop an action plan to achieve that goal, he says.


I think its well on its way right now, says Dr. C. Harold Mielke, director of WSU-Spokanes Health Resource and Education Center, of the effort. The idea, Mielke says, is to take all the different areas of expertise (here) and put them under one roofmaybe a virtual roofand add in a research university, which would be WSU.


Meanwhile, in its comment about Spokanes potential to become a version of the Mayo Clinic, the big Rochester, Minn.-based destination medical center, the report explains that Spokane could become known for specialized but very well coordinated health care in such fields as heart disease, cancer treatment, and rehabilitation services that benefit from a health-care team approach consistent with the Mayo philosophy.


Such a strategy, it says, could include featuring the communitys competency in informatics as a cost-reducing element along with low-cost housing and telecommunications for the families of patients during extended treatments.


Thats an aggressive statement, warns Mielke. It would take a long time to achieve the stature of the Mayo Clinic, he says, but adds, We do have similar ingredients to what Rochester had when the Mayo Clinic got started.


What they (in Rochester) did was focus on those ingredients, Mielke says. We certainly could focus in that way, too.


The state, the report says, could help Spokane further develop the information-technology infrastructure needed for informatics, and perhaps provide funding to study the development of a research center here.


To be sure, Spokane has significant hurdles to overcome to become a destination medical center, the report says. Among them is dealing with work-force issues such as shortages of nursing personnel and the significant attrition of dentists here due to retirements. It also says that certain skill gaps caused by rapidly changing technologies must be dealt with here.


The report also pointed out that, unlike in the Seattle area, there is no hospital that specializes inand presumably could get financial help withproviding care to indigent populations. Pressure on rates under public programs make care for indigents unprofitable, and continued care by all hospitals is not viable under current rate structures, it says.


INHSs Fritz says hes made that very argument before on the state level, and says that efforts need to be made to tap government funding to help pay for indigent care in Spokane, where hospitals write off millions of dollars a year in unpaid medical bills.


As for worker shortages, Fritz says its a real problem, but a national one not unique to Spokane. He and Rumpler say Spokane will need to be aggressive in seeking funding that will allow schools here to prepare more students for health-care jobs.


We have people who want to be nurses and hospitals that want hire them, but not enough funded slots in nursing schools here to train them, says Rumpler. We need to find a way to meet those needs.


Patrick Jones, director of the Biotechnology Association of the Spokane Region, says the community needs to make its legislative and congressional delegations better aware of what Spokane needs to make the health-care and biotech industries prosper here, but adds that first the community must come up with concrete ideas of what we want.


He says that the report, at least, indicates that Spokane has gotten the attention of officials in Olympia.


What might be more important, says Mielke, is that the study might get the attention of people here. Its very important for us because we tend not to believe ourselves, he says. We spend a lot of money to bring people in to tell us because we dont have self-confidence.


Just what the state will do with the report isnt clear yet. OTEDs Pollard says the department is reorganizing itself around the clusters, to ensure that people with the right expertise are helping communities that have specific competencies.


We are now having some internal discussions as to what the next steps will be, she says. This is clearly a long-term strategy.


Pollard adds, The report was intended to help us build strategies to help those industries grow. It gave us that framework. It provides a good basic assessment of where there are clusters of industry around the state.


She says the office now will work with economic-development agencies around the state to capitalize on the reports findings.


Mark Turner, president of the Spokane Area Economic Development Council, says, It very definitely provides us with independent data to take to state and federal sources. Its a good evidentiary resources.


In addition to health care, the report included detailed findings on five other industry clustersagriculture and food processing, forest products, semiconductors, measuring devices and instrumentation, and biotechnologyand did coefficient analyses on a host of other industries.


In that latter analysis, Northeast Washington showed relatively high coefficients in such general industries as electronics and computers; wood products; aerospace; aluminum; concrete, cement and brick (highest in state); and food processing.


We should take advantage of the (health-care) study, but not forget that we have other clusters, says the chambers Hadley. The health-care cluster is highly important, but we dont ever put all of our eggs in one basket.