UAMS, St. Vincent get OK to pay for alliance study
The University of Arkansas for Medical Sciences will sign a contract with consultants to explore how it could partner with St. Vincent Health Systems, after a panel of lawmakers reviewed the plan Monday.
The Arkansas Legislative Council previously stalled approval of the contract, sending it back to its review committee so that lawmakers could ask additional questions about how a potential alliance with a private Catholic hospital would affect services, patients and employees at the state’s public teaching hospital.
Those questions largely centered on whether Catholic health directives related to pregnancy and contraception would limit UAMS treatment options and how any jointly operated entity would respect UAMS’ responsibilities as a public agency.
“It’s not going to be St.
UAMS, for sure,” said Rep. Larry Cowling, D-Little Rock, after hospital leaders answered his questions. “We can go from there.”
The committee’s affirmative vote Monday means the two hospitals will each pay $600,000 for a contract with Deloitte consultants and $120,000 for related expenses, such as lodging.
The consulting firm will explore both hospitals’ assets and policies to explore how they might partner in operations, technology, purchasing or an array of clinical services, with a focus on cardiac, orthopedic and cancer treatments, UAMS Chancellor Dr. Dan Rahn said.
After the analysis, expected to take until the end of the December, the hospitals may decide they can’t feasibly partner at all, he said.
“We’ve cast a rather broad net to determine what the potential value might be,” Rahn said.
He said the two hospitals are not considering a merger and that any partnership would not involve women’s health or contraception services at UAMS.
“The key issues that are not on the table would be anything that would restrict our mission in any way,” Rahn said, adding that research and education programs will not be limited by any agreement by the two hospitals.
Lawmakers reviewed the agreement despite some concerns that both hospitals hiring the same consultants to work on their behalf might present a conflict of interest.
Sen. Jeremy Hutchinson, R-Little Rock, said that, as an attorney, he couldn’t imagine being hired to represent two clients on different sides of an issue.
“There does seem to be some kind of inherent conflict, even if it’s just perception,” Hutchinson said.
Rahn said UAMS consulted outside anti-trust counsel before agreeing to work with the consultants. Both parties will sign a nondisclosure agreement, creating a “firewall” that protects competitive information, before UAMS will sign the consultant contract, he said.
The hospitals could not explore an agreement without one third-party organization to review both of their finances and determine whether it is feasible, Rahn said.
Joann Coleman — an attorney who has launched petition drives and public efforts to stop the partnership talks — told the committee she is concerned that the consultants, originally hired by St. Vincent, would produce a report favorable to partnering with the Catholic hospital no matter what.
“I’m gravely concerned that you’re letting a contract go through that is going to be a foregone conclusion,” she said.
Coleman read e-mails from UAMS leaders she obtained through the Arkansas Freedom of Information Act that showed the hospitals’ leaders had discussed trading information as far back as January and that an attorney contracted by UAMS said it may have to “pressure test” Deloitte’s results by hiring another consulting firm later.
St. Vincent is owned by Colorado-based Catholic Health Initiatives, which has initiated partnerships, mergers and joint operating agreements with hospitals around the country.
Rahn said St. Vincent originally planned to pay for the entire consultant contract, but UAMS agreed to proceed only if the two hospitals could each pay an equal share to ensure that both parties’ interests were represented in the analysis.
Rahn and St. Vincent President and Chief Executive Officer Peter Banko signed a letter of intent in August, agreeing to pursue a “a jointly owned and governed network” that will treat patients in both hospitals’ service areas.
A partnership could create economies of scale and help the two organizations weather changes in Medicaid compensation models and other great changes in the healthcare industry, leaders said.
Neither hospital’s officials will answer questions about how the hospitals would handle any differences in pay and benefits if they share employees or share governance of a cooperative entity.
Representatives of UAMS and St. Vincent said recently that their hospitals would not have answers to such questions until consultants can begin their analysis.
With more than 10,000 employees in its hospital, clinics and Northwest Arkansas campus, UAMS is the state’s largest public employer.
Any partnership plan would have to be approved by the UA trustees and the Catholic Church before it could be implemented, Banko and Rahn have said.