Dr. Bruce Murphy Leaves the Cath Lab to Become CEO of Arkansas Heart Hospital.

Dr. Bruce Murphy found himself at an unexpected crossroad after Medcath Corp. of Charlotte, N.C., announced its intention last year to exit the ownership picture at Arkansas Heart Hospital.

Several prospective buyers tracked through town contemplating a buyout of Medcath's 70.3 percent stake in the 112-bed facility in west Little Rock.

Murphy and the other local doctors/investors holding the remaining 29.7 percent didn't feel good about what might accompany a new majority partner.

"We had shivers it would change our culture and that we would become just a piece of property to them," he said. "The question boiled down to: Who do we really trust this to? A light went on: ‘Bruce, the only way you can do this is for you to do this.'"

The decision to lead a $65 million buyout of Medcath and personally take over management of the specialty hospital had dramatic professional consequences.

Murphy had to abruptly end a 30-year career as a respected cardiologist. To become the full-time CEO and administrator of the specialty hospital he helped launch with MedCath in 1997 meant relinquishing his medical license to comply with new federal laws regarding hospital ownership by doctors.

"This wasn't the first plan," Murphy said. "It wasn't even the third or fourth plan. Most doctors don't retire to become administrators."

But the move, which on Aug. 1 solidified local control and autonomy, made too much sense for him to get hung up on ending his medical practice. It still wasn't easy for Murphy, known for his technical ability in the catheter lab as well as his sparkling bedside manner.

To help close the books on 25 years of private practice at Little Rock Cardiology Clinic, he organized town meetings in communities such as Camden, El Dorado, Magnolia, Danville and Benton to help patients transition.

"Those have been extremely gratifying to me," Murphy said. "Many of these people I've taken care of are my friends. I couldn't just say goodbye to them all without trying to explain why I could no longer be their doctor."

While it was tough having to turn the medical care of his patients over to others, the idea of turning the hospital over to an outsider after he and others had invested so much time and emotional energy to make it successful became unbearable.

"Transitionwise, it has not been terribly difficult," Murphy said of the doctor -to-CEO shift. "I was making management decisions the last 10 years anyway."

Arkansas Heart Hospital reported patient revenue of $117.8 million during fiscal year 2010. For the 12 months that ended Sept. 30, 2010, the facility produced a nearly 9.3 percent return on revenue that yielded a $10.9 million profit.

Final figures from the fiscal year that ended last week should be even better.

"We expect to exceed last year's number by 10 percent, maybe more," Murphy said.

Coinciding with the Medcath buyout on Aug. 1, Little Rock Cardiology Clinic was integrated into the Arkansas Heart Hospital. The two facilities were merged operationally, not physically.

"We did two very, very complicated things on the same day," Murphy said. "The last 50 days have been simpler than the first 50 days (before the buyout)."

In his own way, Murphy has prepared himself to take on his new role at Arkansas Heart Hospital through his professional travels, which have taken him all over the nation and the globe.

"I was going to learn everything I could from anyone I could," he said. "I've visited in excess of 200 different hospitals around the world. I learned something in virtually every cath lab I visited. It may have been tiny, but I learned something."

Five years ago, Murphy guided the launch of Heart Hospital Partners of Japan to help develop a well-run cardiology program for Japanese hospitals that had a weak one or no program at all.

The overseas venture is in its second year of profitability. Bridging the cultural gap between America and Japan to build a successful medical consulting business is not for the faint of heart, Murphy said.

"This is not to be recommended unless you have prolonged determination," he said.

Murphy shrugs off the notion he might have emotional baggage on his life transition from being an arbiter in a court of last resort for many cardiac patients, a skilled doctor who routinely dealt with congenital heart disease.

"I was very honored to be a doctor," Murphy said. "After you do 100,000 procedures, what is your goal? It's easy for me to do two things.

"One, walk to a nurse's station and see if any of the patients are mine and go visit them. That gives me a lot of joy.

"Two, I'm a cath lab rat. Now, I go to the cath lab and see what the boys are up to. Now I have the best of both worlds. I'm a lucky guy."

 

Cardiac Wars

Murphy has remained among the most visible and outspoken Arkansas Heart Hospital advocates during its tumultuously competitive first decade of operation.

Murphy and the other Little Rock Cardiology Clinic doctors battled the state's largest health care insurer, Arkansas Blue Cross & Blue Shield. Less than two years after the Arkansas Heart Hospital opened, Blue Cross expelled the state's largest cardiology clinic from two of its managed-care networks: Arkansas FirstSource, a preferred provider organization, and Health Advantage, a health maintenance organization. The PPO and HMO are owned jointly by Arkansas Blue Cross and hospital and clinic operator Baptist Health.

"The goal was to put us out of business," Murphy said. "Blue Cross and Baptist have a unique relationship. It's the sweetest word I can use.

"Blue Cross deselected our cardiology group, costing us patients and leaving us largely with Medicare and Medicaid patients. Those were not fat years.

"To overcome that, we developed a plan to go out into the state to get patients in areas that weren't served."

The outreach program helped Little Rock Cardiology Clinic and Arkansas Heart Hospital survive until the Patient Protection Act of 1995, popularly known as "any willing provider," was finally enforced in 2005. The legislation forced insurers to work with all health care providers willing to accept their fee reimbursement schedule.

"Then, there was the economic credentialing dispute," Murphy said. "You know you're in court too much when the Pulaski County Courthouse deputy in charge of security knows you by name."

The Arkansas Heart Hospital doctors/investors also weathered a long-running legal battle to maintain hospital privileges at Baptist Health hospitals.

The Little Rock Cardiology Clinic doctors won temporary relief through a 2004 injunction on Baptist's economic credentialing policy. The policy barred doctors from serving on staffs or having hospital privileges if they or a family member had a financial stake in a competing facility.

A 2009 order by Pulaski County Circuit Judge Collins Kilgore, upheld by the Arkansas Supreme Court last year, struck down economic credentialing. Kilgore noted that Baptist Health acknowledged the policy was adopted to suppress competition from specialty hospitals.

The case, which drew national attention, inspired Kilgore to note the importance of protecting the patient-physician relationship.

Murphy considered going into medical research, but it was too far removed from patient interaction to suit him. "I like people and being around people," he said.

What attracted him to cardiology?

"Seeing a problem and fixing the problem right before your eye, and it's full of all sorts of gadgets," Murphy said. "But cardiology is a very physically demanding sub-specialty. You basically have to sacrifice a lot of your personal life."

Peers of Murphy aren't surprised that he can step out of the cath lab and into the corporate boardroom with such apparent ease. Fellow med students at UAMS remember him as a pseudo-CEO during his residency years.

"I was so poor in medical school I lived in a dorm for five years," Murphy said. "When I finally got a medical license, I wanted to buy a house, but I didn't have any money."

To boost his income, he organized a staffing venture with 50 other residents to supply ER doctors at hospitals in Benton, Conway, Morrilton and Searcy.

Murphy declined to describe the operations he oversaw for several years as a real business and agreed with its portrayal as a loosely run confederation of residents.

"I always cherish my time in the emergency room," Murphy said. "I spent 10,000 hours in the ER, and there's virtually nothing I have never seen."

His most memorable ER story? Two Code Blues showed up at Searcy's White County Medical Center within a few minutes of each other. One of the patients requiring immediate resuscitation had an allergic reaction to penicillin and the other suffered an acute heart attack.

Both Code Blues ended as a "favorable outcome." That innocuous FO label, a benchmark often denoting life or death, is a badge of honor for health care professionals.

Murphy intends to step up the marketing war to highlight the FO achievements that have attracted awards for the Arkansas Heart Hospital. He also promises to unveil some new things after the end of the fiscal year last week.

"We live in a competitive world, so I can't tell you just yet," Murphy said.

 

Who Owns Arkansas Heart Hospital?

AR-Med LLC, sole owner Bruce E.

Murphy, 70 percent

 

Combined ownership of 16 percent

Dr. Larry W. Weathers

Dr. Brian E. Barlow

Dr. James J. Kane

Dr. D. Andrew Henry

Dr. Bruce E. Murphy

 

Little Rock Cardiology Clinic, 14 percent

Dr. David Bauman

Dr. Scott Beau

Dr. Charles Caldwell

Dr. P.J. Flaherty

Dr. D. Andrew Henry

Dr. Carl Leding

Dr. David Mego

Dr. Bruce E. Murphy

Dr. Paulo Ribeiro

Dr. William Rollefson

Dr. Jeffrey Stewart

Dr. Wilson Wong