A consortium of groups, including entities tied to the Murphy family, have formed a nonprofit to buy the 112-bed Medical Center of South Arkansas of El Dorado.
The new nonprofit, called South Arkansas Regional Hospital, announced the deal yesterday. Financial terms of the deal, which includes related businesses, physician clinic operations and outpatient services, were not disclosed.
SARH is buying the hospital from Community Health Systems Inc. of Franklin, Tennessee, a publicly traded hospital network (NYSE: CYH). The deal is scheduled to close in September.
SARH is led by the Murphy USA Charitable Foundation, the Murphy Foundation, the SHARE Foundation and AR Health Ventures, which is tied to University of Arkansas for Medical Sciences. The Murphy groups are tied to the family that founded publicly traded Murphy Oil Corp. of Houston and Murphy USA Inc. of El Dorado.
"The partnership between UAMS, the flagship medical organization in Arkansas, and three local foundations is an extraordinary opportunity to provide essential, world class health care and hospital services to South Arkansas, a vital element for economic stability and growth," Madison Murphy, president of the Murphy Foundation, said in a news release.
In a statement, SARH said that once the transaction is complete, it will work with physicians on the medical staff and leadership to develop plans for the future, plans that include capital improvements at the facility over the next five years.
Dr. Brian Jones, president and CEO of the SHARE Foundation, said SARH intends to provide south Arkansas with more services and that the collaboration will build "on the quality care and services delivered by the physicians and employees of Medical Center of South Arkansas."
SARH said aligning with UAMS "will support enhanced delivery of services at the hospital by various specialists." The Little Rock medical school is already opening a regional campus in El Dorado, its ninth in the state. The Murphys and the SHARE Foundation have each contributed at least $1 million to the effort.
"The South Arkansas Regional Hospital collaboration further supports our commitment to this region and our plans to establish a primary care physician residency program in El Dorado," UAMS Chancellor Cam Patterson said. "Statistics show that doctors are more likely to practice where they completed their training, particularly their residencies. Working together, we look forward to creating a destination in El Dorado for our graduates to make a lasting impact on the community."
Medical Center of South Arkansas reported $76.2 million in net patient revenue for the fiscal year ended June 30, 2021, according to Arkansas Business' most recent list of the state's largest hospitals and medical centers, published in November.
Net income was $6.7 million, and total assets were $45.2 million. At the time, it claimed 112 beds at a 41% occupancy rate.
The hospital has seen leadership changes in the last two years. Former CEO Scott Street resigned in August 2021 following two no-confidence votes by hospital staff. CHS had hired Street in 2017, and during his tenure, the hospital invested millions in renovations, expanded clinical services and added specialists.
In March 2020, CHS named David Fox as CEO. Fox has more than 25 years of clinical and hospital and health systems operations experience, and previously served as chief operations officer for Baxter Regional Medical Center in Mountain Home.
According to a news release, the hospital cared for patients at more than 95,000 encounters last year, including emergency room visits, inpatient admissions, surgeries, physician clinic and outpatient services visits.
Hospital leaders have made more than $19 million in investments since 2019 to enhance the facility and expand services, including a remodel of the critical care unit, new surgical equipment, infrastructure upgrades, updates to the inpatient units, and a kitchen/café/community center renovation. Last fall the hospital opened a new $3.5 million dollar, 18-bed inpatient behavioral health unit.