White County Medical Center in Searcy has signed an agreement to purchase the 133-bed Harris Hospital in Newport, Ray Montgomery, White County Medical Center's chief executive officer, said Thursday.
Montgomery did not disclose the price paid for Harris Hospital.
The deal is expected to close Feb. 1, Montgomery said.
Community Health Systems Inc. of Franklin, Tenn., one of the largest publicly traded hospital companies in the country, is selling Harris Hospital.
Changes in health care played into White County Medical's decision to expand into Newport, Montgomery said.
"We know that we're going to have to take care of more covered lives and we're going to have to do it much more cost effectively," Montgomery said. "We're going to have to improve quality."
White County Medical will provide specialty services to Harris Hospital which it doesn't now have, Montgomery said. The Newport hospital will be known as Harris Medical Center after the deal closes.
Hospitals are consolidating not just in Arkansas but elsewhere, said Paul Cunningham, executive vice president of the Arkansas Hospital Association.
The consolidation isn't necessarily because of the Affordable Care Act passed in 2010, Cunningham said.
"But there have been a series of Medicare cuts that have come down the line, beginning in 2010," Cunningham said. "When you look at a shrinking revenue stream, particularly on the Medicare side, it is making hospitals look a bit closer at their bottom line, their finances. That may have something to do with the consolidation."
Tomi Galin, spokesman for Community Health System, did not respond to an email including questions about the transaction.
There will be no changes in employment at Harris Hospital, Montgomery said.
Harris Hospital is the first hospital acquisition for White County Medical Center, Montgomery said.
"This is a progressive step forward for us to move out of the county," Montgomery said. "Historically we've served about a six-county region, but we've not been in other markets in terms of properties and clinics. We see this as an avenue for us to reach a greater population."
White County Medical Center, a not-for-profit hospital with 438 beds, includes two campuses in Searcy and multiple physician clinics and centers. It has more than 1,750 employees and 150 physicians and is the largest employer in a six-county area.
Harris Hospital has more than 225 healthcare professionals. In addition to the hospital, Harris Hospital's network includes 13 physician clinics.
In an unrelated deal, White County Medical Center also has agreed to purchase the physician clinic of Dr. Ryan Buffalo in Heber Springs, Montgomery said.
With the sale of the Newport hospital, Community Health Systems still owns nine hospitals in Arkansas: Forrest City Medical Center, Helena Regional Medical Center, Medical Center of South Arkansas in El Dorado, Northwest Medical Center hospitals in Bentonville and Springdale, Siloam Springs Regional Hospital, Sparks Regional Medical Center in Fort Smith, Summit Medical Center in Van Buren, and Willow Creek Women's Hospital in Johnson.
The largest Arkansas hospital that Community Health owns is Sparks Regional, which has 492 beds.
Community Health owns 207 hospitals in 29 states with about 31,100 beds.
Business on 12/12/2014