UPDATED: St. Vincent, UAMS End Strategic Alliance Talks

by Arkansas Business Staff  on Friday, Jul. 26, 2013 2:55 pm  

Dan Rahn, chancellor of the University of Arkansas for Medical Sciences.

The University of Arkansas for Medical Sciences and St. Vincent Health System said Friday that they have ended strategic alliance talks. 

"The University of Arkansas for Medical Sciences (UAMS) and St. Vincent Health System have reached the end of the exploration of a strategic alliance between our two institutions," the health systems said in a short statement Friday afternoon.

"Despite the good faith efforts of everyone involved, neither entity has been able to define a pathway that meets the goals of both institutions."

In the statement, UAMS Chancellor Dr. Dan Rahn said he would recommend to the UA Board of Trustees that UAMS end negotiations with St. Vincent. While ending the talks, the two said they would "keep the door open for other ways in which we might work together in the future."

Peter Banko, CEO of the St. Vincent Health System, issued a statement Friday in which he said a "statewide health network ... is the right thing to do for our community, health care in Arkansas, and economic development in our state."

Banko said the discussions with UAMS identified "more than $80 million" in nonspecific "operational improvements" and that St. Vincent's parent company, Catholic Health Initiatives, was willing to invest more than $200 million in the affiliation.

"Unfortunately, both parties were never able to come to agreement on how best to achieve the vision and value proposition," Banko said.

The two health systems, each with a major hospital in Little Rock, had begun exploring what was variously described as an affiliation or alliance in August 2012. But a joint operation between St. Vincent, privately held and affiliated with the Catholic Church, and state-owned UAMS was fraught with complications, as acknowledged in a document produced last week by St. Vincent (PDF) that broadly outlined two options.

"We fully understand and respect the current challenges (constitutional, statutory, regulatory, political, and others) for UAMS related to an affiliation with St. Vincent," the document said.

St. Vincent made two proposals for the strategic alliance: a close affiliation that would "face ourselves and the market as 'one'" and an option similar to a joint operating agreement for newspapers, where each health system would offer services under its own brand, with some shared functions to be run by St. Vincent.

St. Vincent also proposed selling UAMS up to half of the Arkansas Health Network, which is a group of doctors affiliated with St. Vincent.

The Full Statement



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