The ongoing changes in the healthcare industry could mean Arkansas will continue to see mergers and consolidations statewide, particularly hospital acquisition of physician clinics.
“Individuals are seeking to partner or collaborate as a result of a variety of factors such as the increased complexities of the regulatory environment, reimbursement changes, significant capital requirements, or the lack of ability to recruit top talent,” said Chris Barber, president and CEO, St. Bernards Healthcare, Jonesboro, which is currently undergoing a $130-million expansion. “We have certainly experienced tighter affiliations with physicians and clinics, particularly in Northeast Arkansas, but also in the state, as well. That seems to be the current trend in the state and the nation. We don’t anticipate this trend changing course in the foreseeable future.”
Recent research indicates there are now more physicians aligned with health systems than in independent practice.
“Individuals are exploring the benefits of economies of scale, efficiency, and attracting top talent,” he said. “That is needed not only for the clinical setting, but for all the various back office disciplines such as information technology, human resources, billing and compliance.”
Barber said partnerships between physicians and St. Bernards have been very positive for the overall delivery of patient care in the region.
“This allows us to provide a comprehensive, coordinated experience for our patients and the families they serve,” he said.
Conway Regional Health System has been affiliating with mostly primary care physicians for several years now, adding clinics in Vilonia in 2014 and earlier this year the Conway Regional Medical Clinic Prince St. in Conway. On Aug. 1, Conway cardiologist Don Steely came on board with the Conway Regional Cardiovascular Clinic. Steely has entered a partnership with the Jack Stephens Heart Institute at CHI St. Vincent and with Conway Regional.
“The cardiovascular clinic is a first for us, but still part of our ongoing efforts to form a stronger affiliation with our physicians,” said Conway Regional’s Chief Operating Officer Alan Finley. “The clinic provides a vehicle for us to work together closely. We are always looking for opportunities to help physicians deal with all the headaches of practice management, giving them more time and energy to focus on patient care. We will manage the business side of the practice so the doctors don’t have to worry about the role of being physician and practice manager.
It gives us a vehicle for growing cardiology services. When you’ve got a lot of your cardiologists interested in being in clinics that have a relationship with a larger entity, it helps us in recruitment, developing new services and just being more tightly affiliated with the physicians. It gives us an opportunity to bring more services to the community.”
Steely said it will be a very beneficial arrangement for him and his patients.
“I’ve just had a huge load lifted off my shoulders,” he said.
Troy Wells, president and CEO of Baptist Health, the largest healthcare system in the state, said they are steadily adding new medical practices and growing existing practices.
“It continues to be a steady growth,” Wells said. “The Central Arkansas community is, for the most part, independent physician practices. So the health system has to find out where there are still needs we can help fill. The overall goal is to create a comprehensive medical staff in Arkansas."
The trend of hospitals acquiring clinics continues.
Sometimes physicians want to work as employees instead of being independent practitioners,” said Paul Cunningham, senior vice president, Arkansas Hospital Association. “We have heard of cases where physician groups go out and seek to become a part of a hospital or a system. But the other part of it as we move from a fee-for-service world into value-based purchasing world, is the focus on aligning hospitals with physicians for better coordination of care leading to better overall quality and outcomes. I think sometimes that is easier to do when the hospital or systems actually own those clinics and those physicians work for the hospital, so you can have an overall game plan.”
Cunningham said the driving force behind hospital alliances, mergers and acquisitions has been the need for smaller hospitals to link with larger facilities for various purposes including capital, ancillary support and other resources.
“For example, in recent years we’ve seen Baptist Health acquire smaller community hospitals in Malvern and Stuttgart,” Cunningham said. “More recently Capella, which owns the National Park Medical Center in Hot Springs and St. Mary’s Regional Medical Center in Russellville, has taken over the operations of Saline Memorial Hospital at Benton. CHI St. Vincent acquired Mercy Hot Springs a couple of years ago, when the Mercy system moved out. That was the joining of two large hospitals, but it seemed to be a good fit for both groups. Mercy is a Catholic system, and CHI is a Catholic system.”
There have also been some divestments. Community Health Systems, based in Franklin, Tenn., operated as many as nine hospitals in the state at one time. Cunningham said it recently divested hospitals in Helena and Forrest City to a new organization, Quorum Health, which was a spinoff of Community Health Systems.
Cunningham said Arkansas is largely comprised of independent hospitals.
“As long as communities can continue to support their hospitals so they can stay independent, I think we will not see a lot of the merger activities,” he said. “Part of that reason is that communities like to have that local control of their local hospitals.”
Mercy Hospital Northwest Arkansas (NWA) is growing from within. Eric Pianalto, president of Mercy Hospital NWA, said their biggest challenge today is a comparatively good one to have: Their clinics and hospitals are full, and they are out of space.
Mercy Hospital NWA has begun a $247-million expansion that includes a new patient tower at Mercy Hospital Northwest Arkansas adding 100 beds to the current 200-bed hospital, with growth being allowed to add another 60 inpatient beds in the future. Four new primary care and specialty clinics will be constructed in Benton County and north Washington County.
The expansion will allow enhancements to the heart and vascular center, women’s services and children’s services.
Pianalto said the expansion offers the ability to bring new and needed services to the community.
“We have people from all over the world who have moved here to work for the three Fortune 500 companies located here,” Pianalto said, referring to Wal-Mart, Tyson and J.B. Hunt. “Doing this expansion allows us to have the space and time to be able to create the services this community needs.”
In August groundbreaking ceremonies were held for a new 13,500-square-foot Chaffee Crossing Clinic on property owned by the Arkansas Colleges of Health Education, which is collaborating with Mercy Clinic Fort Smith and Arkansas Colleges of Health Education. The Arkansas College of Osteopathic Medicine’s students and graduates will have clinical training at this facility. The clinic will feature 28 exam rooms, X-ray, triage, and laboratory and conference space to accommodate training requirements of the medical school’s residency program.
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