After improving CARTI’s financial health, Adam Head said, he has turned his attention to expanding the Little Rock cancer treatment provider’s reach across the state.
CARTI announced last month that it had formed an alliance with Ashley County Medical Center in Crossett and will offer infusion services, including chemotherapy.
It also has recently formed alliances with Johnson Regional Medical Center in Clarksville and Magnolia Regional Medical Center. It will begin providing services in Clarksville next month and in Magnolia in October.
“It is our desire to push world-class, onsite oncology services out to as many areas of the state as we can, especially those who have not historically had oncology services,” said Head, CARTI’s president and CEO. “We want to be close to patients’ homes.”
The CARTI Foundation also is raising money to build a 17,000- to 18,000-SF CARTI Cancer Center South Arkansas that will serve the El Dorado area. Head said he doesn’t have a final estimate on what the project will cost or when construction will start. He said the fundraising “could take some time.”
The nonprofit’s services include medical oncology, radiation oncology, imaging and lab services.
CARTI’s footprint has been growing lately. CARTI will open CARTI Center Russellville next month, and in the spring, CARTI Cancer Center North Little Rock is expected to open. CARTI Cancer Center Conway opened in November, giving it 13 locations around the state. And during the fiscal year that ended in June, CARTI started two specialty clinics, The Breast Center at CARTI and the Cancer Genetics & Risk Management Clinic.
After its finances improved, CARTI decided “to push out and … create other cancer center hubs,” said Head, who came to the health care provider in September 2017.
For its fiscal year that ended June 30, CARTI reported a $3.5 million operating income before depreciation; the previous year CARTI had reported an operating income before depreciation of $529,000. It reported an operating loss of $5.8 million before depreciation for its fiscal year that ended June 30, 2017. CARTI also saw its total net revenue rise 31% to $217.9 million for the fiscal year that ended June 30 compared with June 30, 2017.
“We’re very aggressively reinvesting those dollars into bringing those services to patients all around the state,” he said.
Meanwhile, CARTI is seeing more patients and has hired more doctors. In the last 12 months, it has grown from 25 physicians to 33.
CARTI’s financial numbers for the end of the year are “a marked improvement from recent years,” George Stimola, associate director for the bond-rating service Fitch Ratings Inc. of Chicago, told Arkansas Business. The financial improvement, however, was what Fitch expected.
Stimola said CARTI’s main expenses are oncology drugs. CARTI spent $131.8 million on cancer drugs for its fiscal year that ended June 30, up 18.7% from the previous year.
CARTI managed to work around the increase in drug costs as its revenue increased.
Fitch Ratings said in a news release last month that CARTI’s rating outlook is stable.
It also affirmed the rating of BB+ on CARTI’s $48.2 million in revenue bonds, which are secured by a pledge of revenue, a first-mortgage lien and a debt service reserve fund.
Fitch on its website said a BB rating indicates “an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists that supports the servicing of financial commitments.”
The Fitch news release said that “CARTI’s leading market position, prudent affiliation with partnering inpatient providers, and stable service area characteristics have resulted in consistent, healthy volume growth in recent years.”
The initiatives CARTI put in place during the fiscal year that ended June 30, 2018, “have resulted in financial improvement,” the news release said.
Head said that what helped transform the organization was CARTI’s vision statement, which commits CARTI to being the cancer treatment destination.
CARTI’s physicians worked with the executive leadership team to improve CARTI’s operations. “If you’ve broken down all walls and barriers and can work together effectively and communicate, you can get things done in pretty short order,” Head said. “And that’s what we’ve been able to do.”