Nashville Health Industry Has Strong Vital Signs
Published Apr 07, 2002
Matthew Gallivan, left, president of the Nashville Health Care Council, meets with Martin Rash, chairman and CEO of Province Healthcare.
When it comes to a venue for health-care business success, Nashville is just what the doctor ordered.
The capital city’s roots in health care run deep, established nearly four decades ago with the founding of Hospital Corporation of America and Hospital Affiliates, two entrepreneurial hospital-management companies.
“Nashville is where the for-profit hospital sector was born,” explains Matthew Gallivan, president of the Nashville Health Care Council, an association of health-care industry leaders founded to nurture Nashville’s reputation as the Silicon Valley of Health Care. “These early companies were very successful and generated a wealth of health-care management expertise over the next 30 years with a number of managers either creating spinoffs or alumni of those companies leaving to form companies on their own. Nashville was a very strong entrepreneurial center already, with strong venture capital available, so the rest, as they say, is history.”
In addition to hospital management, the sectors of free-standing outpatient ambulatory surgery and physician-practice management were founded in Nashville, too. Today, more than 220 health-care companies call the Nashville area home, and the nature of those companies includes diagnostics and clinical research, disease management, rehabilitation, health-information technology, and emerging biotechnology.
Nashville-based companies own more than 50 percent of investor-owned hospital beds nationwide. Those players include HCA and its spinoff LifePoint Hospitals, Province Healthcare, Community Health Systems, Essent Healthcare, IASIS Healthcare and the newly launched Symphony Healthcare. Symphony’s founder, Ken Perry, founded IASIS in 1996, and his move is one of the most recent examples of the cross-pollination that makes Nashville such fertile health-care ground.
“While there’s strong growth in health care, there are also increasing cost pressures,” adds Gallivan. “That creates opportunity for entrepreneurial health-care companies that can better deliver services, improve quality and/or lower costs. That’s the hallmark of the entrepreneurial companies and is the recipe for success in the sector.”
There’s more, says Gallivan. Nashville is home to more than 160 professional support firms – law, accounting, banking, architecture, public relations and others – with a specialization in the health-care arena.
“There are so many support businesses here. You can literally walk across the street and say, ‘We need help,’ and get it immediately,” declares Martin S. Rash, 2001-2002 chairman of the Health Care Council and chairman and chief executive officer of Province. Province, like several other Nashville companies, specializes in the ownership and/or management of nonurban hospitals.
“Nashville is such an extraordinary place for health care because, first of all, there’s so much talent here to draw from. Province started six years ago literally from the kitchen table, and we needed to be in a place where you could readily find the kind of talent pool that Nashville has. That’s not true anywhere else in the country for health care,” says Rash. “Of course, from a quality-of-life standpoint, I don’t know how it gets much better.”
Nashville’s wealth of health-care talent offers industry leaders “the opportunity to share thoughts, frustrations, concerns and opportunities,” adds Rash. “There’s a collegial atmosphere here, where the CEOs of competing companies tend to be, at least, friendly. There’s certainly the opportunity to network and talk about issues.”
That Nashville networking also includes medical researchers at world-class institutions like Vanderbilt University Medical Center and Meharry Medical College. Vanderbilt’s Office of Technology Transfer works to place promising technologies spawned by Vanderbilt scientists into the hands of eager entrepreneurs with the capital and know-how to get the products to market.
In particular, information technology is a strong focus in health care today and, therefore, in Nashville. “Health care has typically been a slow adopter of newer information technologies,” Gallivan says. “But given the pressure on health-care costs and the desire to improve outcomes, companies are increasingly relying on integrating data and driving better solutions that way. What you’ve seen is a growth in the number of information technology companies here in Nashville that are focused on health care. Again, it’s the presence of the health-care management expertise here.”
Health care is a growing sector in the U.S. economy, approaching 14 percent of gross domestic product. Over the next decade, that number is expected to rise to more than 17 percent. Gallivan calls the industry “recession-resistant. Many economists point to health care as the main engine for economic growth over the near term,” he says. That means opportunities for Nashville nationwide and globally.
In 2000, the Nashville Health Care Council led its second international trade mission, focused on France and Spain, and is set to lead a third trade mission to Brussels, Milan and Rome in June 2002. The first trade mission, in 1999, was to Germany and the United Kingdom. All have allowed health-care leaders to showcase Nashville on a global basis and point to the many advantages that make Nashville a health-care Mecca.
Story by Sharon H. Fitzgerald
Photo by David Mudd
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