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

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

Hot Springs Plans

Mercy’s hospital in Hot Springs was struggling financially when it announced in 2012 that it was selling to Capella Healthcare of Franklin, Tenn., which operates National Park Medical Center in Hot Springs. Some members of Mercy’s board and others opposed the sale because they feared it would limit health care options in the city. Both parties, though, ended the sales talks in 2013 when the Federal Trade Commission said it didn’t support the transaction.

St. Vincent then stepped in. In October, Mercy signed a non-binding letter of intent with Catholic Health Initiatives. Banko said he had had his eyes on Mercy Hot Springs since 2012. The Hot Springs hospital was considered “a gem” because it’s a hub for all of southwest Arkansas.

“So we thought there were some tremendous upside growth opportunities,” Banko said. “And there’s also some cost synergies they could get by joining our system.”

He estimated St. Vincent Hot Springs could see between a $20 million and $30 million improvement in income from slashing expenses and growing revenue.

St. Vincent’s plan to grow its Hot Springs hospital includes “vigorously competing with National Park and being a regional referral center,” Banko said.

He plans to try to attract patients from the surrounding cities such as Arkadelphia, Malvern and Mena. The specialties St. Vincent will focus on in Hot Springs include orthopedics, cancer, cardiovascular, neurosurgery and behavioral health.

He will also target the doctor groups in the area.

“Our model is a combination of employment and relationships,” Banko said. “So the private medical staff that aren’t affiliated with the hospital, we view [them] as our potential partners.”

He said patients typically follow their doctors to the hospital for treatment.

Looking Toward Conway

St. Vincent also is looking at expanding in Conway. In October, Conway Regional Health System said it was exploring “potential strategic affiliation options,” including partnering with another health care provider or system.

 

 

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