Hospital Vendors Earn Millions for Range of Contract Services

by Mark Friedman  on Monday, Jan. 13, 2014 12:00 am  

Nabholz was paid $11.9 million by Conway Regional Medical Center in 2011 and $863,376 in 2010; $9.3 million by St. Bernards Hospital in Jonesboro in the year that ended Sept. 30, 2012, and $1.9 million for the previous year; $4.6 million by St. Vincent Infirmary Medical Center in Little Rock in the year that ended June 30, 2012; and $5 million by White River Health System in Batesville for the year that ended Sept. 30, 2011, and another $3.4 million the following fiscal year.

The List

Every nonprofit hospital that is required to file a Form 990 only has to list the top five contractors that were paid at least $100,000 during the hospital’s fiscal year. That means the Form 990 doesn’t list all of the hospital’s vendors that received more than $100,000.

The hospital, though, is required to report the total number of independent contractors that received more than $100,000. Eighteen hospitals on the list had more than five vendors. At 98 contractors, St. Bernards Hospital and St. Vincent had the highest number of contractors that received more than $100,000.

The tax filings are available online at, a nonprofit organization that compiles nonprofit IRS reports and publishes them online. Some of the hospitals may have filed more recent 990s that are not yet available from GuideStar.

The list of the highest-paid independent contractors would be useful to several groups, GuideStar spokeswoman Lindsay J.K. Nichols told Arkansas Business last week.

“There’s two ways to look at it,” she said. “If you’re selling your business to nonprofits, it’s really nice to see who’s buying what. But then separately, if you are curious about how a nonprofit is spending its money, it’s nice to see which groups are” getting the contracts.

The vendors that provide the most services to hospitals are, as expected, tied to physician coverage.

“That’s why we’ve got to try and fix the physician shortage issue,” said Ron Peterson, the president and CEO of Baxter Regional Medical Center. He said that the independent contractors plug the holes left by a lack of staff doctors, but it is “every expensive.”

In 2011, the most recent year available, Baxter Regional paid Mercy Health System $562,406 for physicians for its intensive care unit.

Peterson said the contracts are critical for the hospital. “It is very important to us to be able to make sure that we’re able to provide the continuity of care,” he said. “What we find is it’s really invaluable to us.”

Still, Peterson said, the contract costs have been rising in recent years. “What I’m finding is we’re working very hard to try and reduce our costs with all our vendors,” he said. “We’ve been able to negotiate with several of them, but when it comes to that contract-labor category, it’s a supply-and-demand issue.



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