CARTI's New Plan Upsets Decades-long Relationship

by Mark Friedman  on Monday, Apr. 30, 2012 12:00 am  

(Editor’s Note: This is the latest in a series of business history feature stories. Suggestions for future “Fifth Monday” articles are welcome. Please contact Gwen Moritz at (501) 372-1443 or by email at GMoritz@ABPG.com.)

For more than three decades, it was a perfect partnership.

Four central Arkansas hospitals had set aside their competitive differences and banded together to create the nonprofit Central Arkansas Radiation Therapy Institute Inc., which opened in 1976 to provide radiation therapy treatments.

But when CARTI announced in August that it had bought the for-profit Little Rock Hematology Oncology group and was planning on building its own comprehensive cancer treatment center, the University of Arkansas for Medical Sciences had had enough of the cooperative it helped to create.

UAMS officials saw the acquisition as a threat to its own cancer treatment center and severed ties with CARTI at a cost of approximately $20 million, which includes buying out CARTI’s lease agreement with UAMS for $9.5 million and replacing CARTI’s machines.

UAMS’ and CARTI’s missions “don’t jibe with each other anymore,” Dr. Peter Emanuel, the executive director of UAMS’ Winthrop P. Rockefeller Cancer Institute, told the University of Arkansas Board of Trustees board members on March 29.

Emanuel told the board members that UAMS relies on cancer patients coming to its center, which it spent about $130 million to expand to 12 floors, in order to improve care through research and education.

“But if we have a direct competitor … it significantly impedes our ability to attract patients into the Cancer Institute to practice in clinical protocols to advance the research mission to improve the quality of cancer care,” he said. “And so it’s a detriment to this whole operation for them to establish and build a comprehensive cancer center.”

Jan Burford, president and CEO of CARTI, told Arkansas Business recently that the move to build its own center wasn’t designed to compete with UAMS.

“CARTI has a history of collaborating, not competing,” she said in her office, which is on the campus of Baptist Health’s Higginbotham Outpatient Cen-ter in Little Rock. “We didn’t go into it thinking it would be competing with, let’s say, UAMS.”

But these days, radiation therapy is one more of the profitable medical procedures.

For the fiscal year that ended June 30, 2010, the most recent numbers available, CARTI reported net income of $5.7 million on revenue of $139.8 million.

 

 

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