Central Arkansas Medical Centers Collaborate, Compete in Tight Health Care Market

by Mark Friedman  on Monday, Apr. 21, 2014 12:00 am  

Hospitals in central Arkansas must collaborate to survive, according to St. Vincent Health System President and CEO Peter Banko, who says he doesn’t think Little Rock can support three hospitals.

“I think it’s a two-hospital market,” Banko told Arkansas Business in a recent interview. “At the end of the day, if you look at the financials, we all lost money. And to what point? Three of us are beating up on each other and none of us are benefitting.”

Reinforcing Banko’s further assertions about the need to collaborate, Dr. Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, revealed last week that while partnership talks between the two systems have officially ended, the negotiations aren’t dead.

“We’re very interested in exploring beneficial partnerships of all kinds,” Rahn told Arkansas Business last week.

He said he “fully expects” to be working with St. Vincent and some of the areas that are being discussed involve collaborating on cancer services.

“I’m not prepared to discuss conversations right now,” he said. But “we’re continuing to talk with each other about ways … to partner … that are beneficial to the public and patients as well as to our organizations.”

That partnership strategy fits into St. Vincent’s plans for growth.

For the past several years, Banko has been operating under the premise that one day Arkansas will have only two or maybe three statewide health networks. And he wants to be sure St. Vincent is one of the systems.

And he sees partnerships with hospitals and physician groups as keys to St. Vincent’s success, Banko said in a recent interview in his Little Rock office.

“Just having a presence in Little Rock is not enough,” he said.

On April 1, St. Vincent began operating the 282-bed hospital in Hot Springs that had been run by Mercy Health of Chesterfield, Mo. Catholic Health Initiatives of Englewood, Colo., and St. Vincent, an affiliate of CHI, completed their purchase on April 1 of Mercy’s Hot Springs hospital and physician clinic. The purchase price wasn’t publicly disclosed.

The Hot Springs acquisition gives St. Vincent four hospitals in the state, with other locations in Sherwood, Morrilton and Little Rock. It also has a rehabilitation hospital in Sherwood. Baptist Health of Little Rock is the state’s largest health care organization. It operates eight hospitals and is building a 100-bed hospital in Conway.



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