Adam Head
CARTI Inc. reported a loss before depreciation of $1.4 million in the first two months of its fiscal year that began July 1.
The loss continued the financial pain for the Little Rock cancer treatment provider, which had a loss before depreciation of $7.9 million in its fiscal year that ended June 30, 2016, and $5.8 million for the year that ended June 30 of this year.
Adam Head, Central Arkansas Radiation Therapy Institute’s president and CEO, attributed the loss in the first two months to lower than expected patient volume and to payments made to its management consultant Berkeley Research Group of Emeryville, California. In 2016, the nonprofit failed to maintain a required debt service ratio on the $49 million bond issue that was used to build CARTI’s four-story Little Rock Center, which triggered the hiring of BRG.
Head, who started in September, said CARTI had a “positive margin” for the month of October but declined to say what the amount was. “We’re making some real progress with a lot of our initiatives.”
Head said the leadership team at CARTI is “looking at everything with fresh eyes.”
It also is putting in place a number of initiatives that BRG suggested, as well as ones from CARTI’s new leadership team, which should cut costs or boost revenue, he said.
So far, the initiatives have resulted in $4.2 million worth of savings or improved revenue for CARTI, according to an Oct. 19 PowerPoint presentation titled “Investor Update” that was filed with the Municipal Securities Rulemaking Board. Other initiatives in progress could result in another $3.1 million benefit for CARTI.
Head said last week that CARTI had hired Jake Stover as chief financial officer. He had been at the University of Arkansas for Medical Sciences, serving as associate vice chancellor for finance and treasurer. He starts Dec. 11.
CARTI also recently hired Patti Moser as vice president of medical oncology and Jeremy Land as vice president of radiation oncology, which are two new positions.
The positions “provide an expert-like focus in leadership in those specialties,” Head said. “We’ve created a strong communication framework, working with physician leaders and the executive team … for decision-making.”
Physician Pay
CARTI oncologists ruled Arkansas Business’ most recent list of the state’s highest-paid nonprofit employees, occupying four of the top five positions with total compensation ranging from $1.57 million to $2.3 million in the fiscal year that ended June 30, 2016.
Head said that among the first things he did after starting his new position was to commission an independent study on the doctors’ pay, the second salary study CARTI has conducted in recent years.
“In looking at our physicians, based on the patient loads that they carry, … I saw that it was in line,” Head said. “I made sure that I had an independent, fair-market assessment by some health care firms.”
He said the doctors’ pay is tied to the number of patients they see. “We have some very busy physicians based on the amount of cancer in Arkansas,” he said. “Their pay is more of a reflection of how busy they are rather than just paying them a high salary.”
In fact, the monthly average for new patient visits was 649 for the first two months of the fiscal year, up 3.7 percent from the previous year, according to CARTI’s PowerPoint presentation. CARTI’s established patient visits were 7,025, up 3.5 percent in the first two months compared with the same period in the previous year.
Testing Increases
Meanwhile, CARTI’s monthly average for MRI scans was up 16.6 percent and positron emission tomography, or PET scans, were up 19.7 percent from the previous year.
Head said CARTI isn’t running more scans to increase patient revenue. He said that if CARTI orders a patient scan, it’s so doctors can “make the appropriate course of treatment. … You don’t want to make a misdiagnosis when you’re dealing with cancer.”
Some patients, though, require more testing, he said. “And whether that happens to drive up a little bit of the cost, well, that’s just more burden on us to do it in an efficient and effective way as we take care of patients while maintaining very high quality.”
Sign up for Daily E-news
