Banking on health care

Bank of Clark County targets hospitals and clinics with unique approach

Vancouver-based Bank of Clark County has designated two men, Robert Johnson and John Ludwig, as its new health care banking team. Johnson is a banking veteran with more than 20 years of experience but Ludwig isn’t a banker at all.

For the past 30 years, Ludwig has specialized in medical equipment sales as an independent representative. And he comes to the bank with a contact network and knowledge of the health care industry that can’t be replicated, said Senior Vice President Hunt Coracci.

"He’s not a banker – that’s why we hired him," he said.

Virtually all banks have medical clients, but BOCC is using the team as strategic business development and, in turn, recognizing the area’s tremendous growth in health care, he said.

In terms of the bank’s loan portfolio, health care is its second largest industry and the team aims to provide specific banking products to all ranges of medical professionals in the Clark County and the Vancouver-Portland metro area.

"What we’re doing is creating products and services particular to various layers of health care industries, Coracci said. "The more a banker knows about the particular nuances of an industry, the better he or she can serve a client, so we’re saying come and bank with us because we understand your business and what it takes to handle your business."

The team

Johnson, who lives in Beaverton, worked for a number of years at First Interstate Bank then Wells Fargo and was with Bank of the West in Portland for the last 10 years. Last year, he graduated from the Seattle-based Pacific Coast Banking School, a three-year banking graduate school.

The banking team presented an opportunity to create something new, Johnson said.

Ludwig specialized in surgical devices sales as an independent rep. When he was first approached by BOCC, he questioned why they wanted someone who possessed no discernable banking skills.

But after careful consideration, he presented Coracci with a business plan and embraced the idea of staying connected to the medical field, just approaching it from another angle. "We really liked John immediately and he brought a whole different background," Coracci said. "We thought, shoot, we have to hire both and make them a team. We’re not trying to make a banker out of him."

Ludwig, who lives in Portland, has worked with doctors and medical groups for years and comes with a built-in network that would take Johnson years to replicate. The pair resemble Butch Cassidy and the Sundance Kid – Ludwig finding potential clients then turning them over to Johnson when it’s time to talk banking services.

The bank has provided Ludwig with "Banking 101" to give him a general understanding of banking and familiarize him with the lingo.

"I’m going to be learning until I retire," Ludwig said, laughing.

Time, relationships and flexibility are precious to health care providers, and Johnson and Ludwig are developing products such as an express loan application process that guarantees providers an answer within hours of faxing the application to the bank to cater to these needs.

Many medical providers, especially smaller clinics, need startup financing, which banks don’t typically provide. However, medical providers have the potential to do well early on, and can be a good risk.

"In general they’re very good risks," Johnson said. "We’re finding out how to manage that risk so it is profitable for them and us."

"We knew no one else is going public about catering to this industry," Coracci said. "Other banks have medical clients, but we’re making this a specialty."

It really is all about relationships

While the personal relationship-building that comes with working closely with clients is essential in community banking, Pam Vukovich, chief financial officer for Portland-based Legacy Health System, said she doesn’t see much difference between banking medical providers and commercial banking in any other field.

"Money is money and banks are banks," she said.

Legacy banks solely with U.S. Bank and its needs are primarily transactionary, with project financing done through bonding.

Dan Clark, vice president branch manager for Banner Bank in East Vancouver, said in general there isn’t much of a difference but allowed that there is a certain background bankers should have when handling health care clients.

Federal HIPAA regulations and the pitfalls of dealing with insurance billing are among them.

Clark recognized the marketing strategy imbedded in the banking team but said community banking is a field that is built upon one-on-one service, and specialties in market segments are becoming commonplace for this reason.

When a banker is familiar with a client’s work and experiences related to banking, he or she is able to share knowledge gained from those experiences with other clients.

"By and large, medical professionals are trying to accomplish the same thing that most other businesses are trying to do – be more efficient, more effective, offer better service and be more profitable," Clark said. "My role as a banker is to try and marry their needs with products and services and make them aware of things that can improve their finances."

Legacy switched to U.S. Bank about 10 years ago because of its customer service and competitive fees. It also has a number of attractive products such as positive pay confirmation, an electronic system that screens for fraudulent checks, Vukovich said.

Chiropractor Karis Cooper, who runs Vancouver-based BC Chiropractic with her husband Matt, recently joined BOCC for the personal attention she has received there. Because the Coopers are practicing out of Bauman Chiropractic Center, 202 E. McLoughlin Blvd., they haven’t had much need for capital financing.

"I appreciate that they provide an option specific to health care," Cooper said. "Knowing they’re taking care of you gives such peace of mind, especially when we already have loan after loan to worry about from chiropractic school. Personability is really important."

That relationship, paired with knowledge of medical-specific issues, such as insurance billing and assessing financials that may look differently than those from another field, means less of an uphill climb for health care clients, said Michele Smith, CFO of Vancouver-based Northwest Surgical Specialists.

"You’re not jumping through hoops every time you need a loan," she said. "The (health care) industry is growing and the bank is growing; this is giving them an edge"