by Dan McFadden, APR
Health care choices are bountiful in Arkansas. From knee surgery to heart surgery, neurosurgery to neonatal intensive care, Little Rock offers a wealth of hospitals from which to choose. While many Arkansas hospitals may provide the same procedure, no two hospitals are alike. How hospitals are operated, owned and led can be vastly different.
Navigating the waters of private, non-profit, corporate or physician-owned hospitals may seem a daunting task, but knowing the distinct differences and similarities provides a healthy advantage for Arkansas health care consumers.
For perspective, the Arkansas Hospital Association website reports on 103 of its member hospitals. Of these member hospitals, 56 percent are charitable, not-for-profit organizations with 30 percent operated by private, for-profit companies. The remaining 14 percent are public hospitals run by a city, county, state or federal governments. Furthermore, the variety of Arkansas hospitals is broad and includes Catholic-based, Baptist-based, behavioral health, children’s and a university medical center.
In general terms, physician-owned hospitals are smaller than their counterparts and are focused on a smaller group of subspecialties. The traditional large, private, non-profit hospitals are comprehensive in the care that they provide and tend to be spiritually oriented and mission-driven. There are benefits to both hospital operation approaches, says one Arkansas hospital authority with experience in both physician-owned and private, non-profit hospitals.
“From the patient standpoint, people may go to the larger hospital and get a lot of diagnostic testing and procedures done,” says the hospital authority who requested anonymity. “If they are struggling financially, they may find one of these same hospitals willing and able to care for them because they are mission-driven. On the other hand, because physician-owned hospitals tend to be focused on one service line, they can be operated more efficiently with more attention to details.”
Efficiency contributes to the overall patient experience according to Dr. Scott Bowen of Bowen Hefley Orthopedics in Little Rock. Bowen, one of 17 physician owners of Arkansas Surgical Hospital (ASH) in North Little Rock, says ASH was built for and continues to operate with patient experience at its core.
“Controlling processes is normally associated with standardization, which allows you to eliminate deviations that could cause errors,” Bowen explains. “What makes Arkansas Surgical Hospital go from good to great is that we standardize processes while taking into account the individual uniqueness of each patient and their specific needs. This is validated by 95.1 percent of our patients being willing to recommend Arkansas Surgical Hospital.”
According to Bowen, physicians’ input and recommendations are at the center of every decision. It is one of the key benefits of physician ownership. “Physicians are involved in every aspect of patient care, from the nurses and staff to the processes and equipment — even down to the food and the overall hospital environment. This, too, is validated by our continued recognition of high patient quality and safety standards, as well as our overall patient satisfaction.”
ASH has seen significant growth on its North Little Rock campus, with the addition of two orthopedic clinics in Conway and White Hall, and an Urgent Care center, also in North Little Rock. Bowen says the hospital’s physician partners are reviewing communities that would “benefit from our vision of care.” That vision includes thoughtful and strategic planning to ensure delivery of the same level of care and service that is provided at ASH can be delivered elsewhere.
Another Central Arkansas hospital leader agrees that physician leadership is at the heart of his hospital’s success. Drew Jackson is president and chief operating officer at Arkansas Heart Hospital (AHH), a former physician-owned hospital now corporately owned by ARK-MED, LLC in Little Rock, which continues to be physician-led.
“Physicians are so intimately bought into our mission here at Arkansas Heart Hospital,” Jackson says. “Going from physician-owned to being a physician-led hospital has probably helped position us as the leader in the area. I don’t know of anybody else in the area that has so much physician engagement as far as leadership models here in the hospital itself or input when it comes to how we operate the hospital.”
Expansion continues for AHH. In addition to the hospital’s 30 community clinics across the state, a groundbreaking was held this past November for the new Arkansas Heart Hospital Encore, a 24-bed hospital, which will also be corporately owned and located in Bryant.
Jackson believes that many misconceptions surround the physician-owned model. “I think the general public tends to think that physicians are only after financial gain. Do the physicians make money in a physician-owned hospital? If it’s successful, yes, of course, they would. Just from the simple fact that someone owns something, there seems to be more of an interest to see success. You can look closely locally with the only physician-owned hospital (ASH), and their quality outcomes are unbelievable.”
Ongoing transition in the health care industry generates some consolidation and innovative partnerships. This can be welcome news to both hospital providers and patients as it may increase patient access to high-quality, affordable and advanced medical care. Such was the case when Little Rock Diagnostic Clinic recently joined the CHI St. Vincent Medical Group.
CHI St. Vincent CEO Chad Aduddell says the transition has been characterized by a great deal of uncertainty surrounding trends toward rising costs for providers throughout the health care industry and lower reimbursements. “To help address that trend, organizations like CHI St. Vincent and the Little Rock Diagnostic Clinic have chosen to invest in people and networks to ensure they can still provide the highest quality care while also better managing their supply spend and associated costs.”
Aduddell adds that the providers who came from the Little Rock Diagnostic Clinic are also still very much involved in the day-to-day decision-making of clinic operations. “The CHI St. Vincent-Little Rock Diagnostic Clinic has created a joint operating committee between CHI St. Vincent and its members to guide the operation of the clinic.”
Another innovative partnership good for the future of medicine in Arkansas has been established between AHH and the University of Arkansas for Medical Sciences (UAMS). Not surprisingly, it involves teaching the next generation of heart specialists. Jackson says UAMS Interventional Cardiologist and Electrophysiologist Fellows rotate through service at AHH’s catheterization labs. According to the UAMS Interventional Cardiology Fellowship, “Each fellow rotates through service at UAMS, Central Arkansas Veterans Healthcare System and AHH in one-month blocks.”
In a demonstration of its commitment to teaching, AHH compensates the UAMS program for the opportunity to teach fellows in Arkansas. “We see the ability for us to pour into these younger physicians that are going through their course of education to make them better,” Jackson explains. “I think that at the base of medicine there is the innate feeling that teaching is really part of the profession.”
Jackson notes that AHH heart surgeons perform procedures at UAMS, as well.
Remaining profitable is critical to a hospital and affects its abilities to support its mission. The profitability of some service lines makes it possible for hospitals to support less profitable service lines.
Cardiac and orthopedic services, neurosurgery, neonatal intensive care units are generally considered by hospitals to be strong service lines from a profitability standpoint. Whether those services are being provided in a physician-owned, corporately-owned, or private, non-profit hospital, they help a hospital maintain a positive bottom line.
The Arkansas Hospital Association reports that in 2016 alone $371 million in uncompensated care was provided in Arkansas for patients who were uninsured. This uncompensated care can chip away at the hospital’s bottom line. Due to the provision of a comprehensive scope of service lines, private, non-profit hospitals typically have a higher percentage of uncompensated care. Yet, all hospitals are faced with uncompensated care.
Jackson says the Heart Hospital “gives millions of dollars in uncompensated care each year and we gladly do that. We take care of our patients.”
On the Medicare/Medicaid front, there are some differences for providers of corporately-owned or physician-owned hospitals and private, non-profit hospitals.
Bowen says that when ASH opened, one of their goals was to provide a high-quality facility for orthopedic Medicare patients. “We’ve traditionally found that we are a more cost-effective choice for both patients and insurers.” Regarding private-pay co-insurance amounts, he says those tend to be less than at other local hospitals because of the lower allowable amounts. “We also save insurers—specifically, Centers for Medicare & Medicaid Services—money due to their lower cost structure and lower complication rates.”
Whether it is a private, non-profit, physician-owned, state or corporately owned hospital, they all share one thing in common: exceptional physicians, nurses and technicians committed to providing quality care. That is a true win for the Arkansas health care consumer.