Inland Northwest Health Services, the big Spokane-based nonprofit, kept its strong recent growth trend intact in 2010, posting projected record revenue of about $167 million and adding more employees to boost its total work force to nearly 1,100.

Its revenue was up about 7 percent from $156 million in 2009, and it says it brought on about 30 additional workers last year, with expectations to add more this year, partly in connection with some looming projects it isn't yet able to discuss.

"Overall, we did well. All of our divisions ended up in the black," says CEO Tom Fritz, adding that the organization met its targeted budget goals.

INHS expects to show a 2010 net margin—equivalent to a for-profit business' net income—of about 3 percent, which is decent for a nonprofit and enables it to make needed expenditures to further improve operations, Fritz says.

"We've really been able to manage our expenses and do things to cut our costs," including scaling back to a much leaner management structure while also dramatically reducing the organization's accounts receivable through tight fiscal oversight, he says.

While pursuing a range of projects, INHS also has been able to slash its debt—to $4.4 million in 2008, down from $16.3 million in 2004 and $31.7 million in 1999, shortly after Fritz took over as its top executive. Its debt grew back to $12.2 million in 2009, when it spent $10.1 million to buy 60,000 square feet of space in the 17-story Wells Fargo Center, at 601 W. First, where it now has its headquarters, but it had reduced that figure back to $8.1 million by late last year.

Last quarter, it made a lump sum $3.5 million final payment on the purchase of St Luke's Rehabilitation Institute here, which it operates, and now owns the once-failing, specialized therapy facility free and clear, he says.

Formed collaboratively in 1994 by Spokane's two major hospital operators to merge a group of formerly competitive, but often money-losing health services, INHS operates a nationally recognized electronic medical records network and the Northwest MedStar air ambulance service, along with St. Luke's.

It also operates the Northwest TeleHealth video-conferencing network, the Community Health Education & Resources (CHER) information and screening resource center, and the Children's Miracle Network.

INHS is an independent entity, but has two members—nonprofit Providence Health Care, Spokane's largest health-care provider, and Empire Health Services, which in turn is owned and controlled by for-profit hospital chain Community Health Systems Inc. (CHS), of Franklin, Tenn.

The Providence Heath Care network includes Providence Sacred Heart Medical Center & Children's Hospital and Providence Holy Family Hospital here; hospitals in Chewelah and Colville, Wash.; and a number of other health-care organizations and services. It's part of the much larger Providence Health & Services network, based in Renton, Wash., that employs about 49,000 people and includes 27 hospitals, more than 35 non-acute facilities, and physicians clinics, plus numerous other health, housing, and educational services.

CHS indirectly owns and controls the two other largest hospitals here, Deaconess Medical Center and Valley Hospital, along with more than 120 other hospitals in 29 states that its website says its affiliates own, operate, or lease.

INHS seeks to simplify the structure by saying its four member hospitals are Sacred Heart, Deaconess, Holy Family, and Valley Hospital.

Federal pilot program

In a recent noteworthy development, the U.S. Department of Veterans Affairs announced in September that the Spokane VA Medical Center and Fairchild Air Force Base will join forces with INHS on a pilot project aimed at simplifying the sharing of electronic health-related information between federal and private networks.

The intent of the program is to improve the "portability" and exchange of veterans' and active-duty military personnel's health information on a voluntary basis. The pilot program here will run through 2012, with the goal of expanding its availability after that, and Fritz says he's optimistic about its long-term potential and INHS' role in its future expansion.

Nationally, he says, "There definitely is a focus on IT, which is good for us."

Through its current medical records network, INHS connects 38 hospitals and health-care facilities, enabling physicians and providers to securely access patient information using wired and wireless technologies. Its network includes more than 4,000 physicians, 450 clinics and physician offices, and 3.5 million electronic medical records.

Last quarter, it added six new facilities to its network—three each in Idaho and Montana—which Fritz says "really is a good shot in the arm," and he says the system is continuing to grow incrementally.

Despite post-election uncertainty swirling around the federal health-care reform act, Fritz says he remains bullish about INHS' outlook because of a continuing federal government push to expand greatly the use of electronic medical records as a way to improve the nation's health-care system.

That push should translate into additional opportunities for the Spokane organization, he says, adding, "Our growth, we anticipate, will be on the technology side."

That belief notwithstanding, INHS is continuing to see gains in other areas, such as its Northwest MedStar service, through which it provides helicopter, fixed-wing, and ground transport to more than 3,500 critically ill and injured patients a year. It recently added critical-care ground ambulance service to its helicopter and airplane in the Tri-Cities, and expects that service to be a strong added revenue generator, Fritz says.

"We used to have to put our (critical-care) crews in somebody else's ambulances," but no longer have to do that, he says.

Also last year, it began employing registered nurses at its Felts Field dispatch center to help assess situations and evaluate patients' status to decide which mode of transport is most appropriate, and it installed cameras at hospital helipads that its helicopters use, as an added safety precaution, he says.

Meanwhile, at St. Luke's, which INHS says is the largest freestanding medical rehabilitation facility in the Northwest and the only Level 1 trauma rehabilitation hospital in the region, it has been doing extensive patient room remodeling, adding new equipment, and making other upgrades.

Late last year, it opened St. Luke's Community, a 2,200-square-foot therapy area that provides modules of real-life community settings, from a store, bank, library, and restaurant, to a bus, car, and even part of an airplane fuselage, to help patients relearn and practice basic tasks.

One bit of lingering uncertainty in INHS' future has involved a lawsuit it brought a little over a year ago against the Washington companies that operate Deaconess and Valley Hospital, accusing them of breach of contract and failure to pay more than $5 million it claimed they owed it.

Fritz declines to talk in detail about the status of that litigation, other than to say that negotiations have been progressing andhe's hopeful the dispute can be resolved in the coming months.