Baptist Health Plans for Growth with New Hospitals in Conway, Malvern

by Mark Friedman  on Monday, Jan. 6, 2014 12:00 am  

Despite hospitals facing millions of dollars in lower health care reimbursements, Baptist Health of Little Rock is pushing ahead with ambitious expansion plans.

Last week, Baptist began operating a 72-bed hospital in Malvern. And this year, the health care system will start construction on a 100-bed hospital in Conway, which will be its ninth hospital in the state.

Baptist Health President and CEO Russell Harrington Jr. recently told Arkansas Business that while the Affordable Care Act “creates a lot of uncertainty … we decided we’re not going to hunker down and stick our head in the sand. We’re going to be proactive and position our organization for the future regardless of the law.”

Baptist also is considering adding more primary care clinics and working with other hospitals in Arkansas to “enhance quality and reduce costs,” he said.

Harrington declined to name the hospitals he’s talking with.

“Our idea of expansion is not always bricks and mortar,” he said. “We believe one of the keys to our success in the future is working with an increasing number of physicians and hospitals in a clinically integrated relationship.”

Medicaid Option Critical

Baptist’s moves, though, come at time when hospitals across the country are facing the loss of billions of dollars due to lower reimbursements per patient. To help pay for the Affordable Care Act, the rate of growth in Medicare reimbursements took a hit. For Arkansas hospitals, that means missing out on $2 billion to $2.5 billion in Medicare revenue during the next decade.

Harrington said the lower payments have already stung Baptist. “2013 has not been an easy year financially for us, as well as most hospitals,” he said.

In addition, hospitals also are bracing for somewhat lower payments for procedures performed for patients newly insured by the ACA health care exchange as participating private insurers have adopted hardball pricing tactics.

The federal budget sequestration cost Baptist $5 million in 2013 and is projected to cost $6 million in 2014. In July, Baptist Health laid off 170 of its workers across its network of about 7,300 employees.

Baptist blamed the layoffs on a “difficult and challenging environment of substantially less government reimbursement, burdensome government regulations, rapidly rising costs of supplies, increasing charity care and bad debt, and the need for technology and medical innovations.”



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