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Hospitals to pool management units

by Jessica Seaman | August 12, 2015 at 2:12 a.m.

CHI St. Vincent and Conway Regional Health System on Tuesday announced they have entered into a five-year "management agreement," the result of more than a year of discussions.

Under the deal, which starts Monday, each health system will retain its name, governance and autonomy. Matt Troup, vice president of Ancillary and Support Services for CHI St. Vincent, will replace Jim Lambert as chief executive officer of Conway Regional Health System.

"Conway Regional has asked us to step in in a management role and bring our knowledge and our expertise and our experience together with their team to work on their operations at Conway Regional," said CHI St. Vincent Chief Executive Officer Chad Aduddell.

He said the partnership will improve quality of care and lower costs associated with providing health care. It will not involve patient referrals and is more focused on management operations, Aduddell said.

With the partnership, Conway Regional's Chief Operating Officer Alan Finley, Chief Financial Officer Steve Rose, and Chief Nursing Officer Jacquelyn Wilkerson will become CHI St. Vincent employees. Their offices will remain in Conway. Troup will remain a CHI St. Vincent employee, but his office will be in Conway.

Other than with management, there are no other employment changes at either CHI St. Vincent or Conway Regional, representatives with the facilities said.

The formation of the partnership comes after Conway Regional's board announced in 2013 that it was seeking such affiliations. And then last year, Conway Regional and CHI St. Vincent said they would hold exclusive strategic affiliation discussions.

Lori Ross Scroggin, spokesman for Conway Regional, said it has teamed up with CHI St. Vincent because "their mission and their care model is very similar to how ours is designed."

"This partnership will provide our community with expanded services and specialties while working to reduce health care costs," said Barbara Williams, chairman of the Conway Regional Board, in a prepared statement. "Both Conway Regional and CHI St. Vincent have the benefit of retaining our individual autonomy, meaning we can still respond to our markets in the way that is best for each of our organizations and the patients we serve."

Conway Regional includes a 154-bed acute medical center, various outpatient centers, Conway Regional Rehabilitation Hospital, several primary-care clinics and a fitness center.

CHI St. Vincent includes the 615-bed CHI St. Vincent Infirmary in Little Rock, 282-bed CHI St. Vincent Hot Springs, and other facilities in Sherwood and Morrilton.

Despite the management changes, the partnership between the two entities is not a merger, Aduddell said.

CHI St. Vincent and Conway Regional remain technically and legally separated, he said, adding that Conway Regional "signed an agreement for us to manage the operations but they stay independent and we stay independent."

Such collaborations between health care facilities are becoming more common in the industry, said Daniel J. Marino, senior vice president of The Camden Group, a health care consulting firm.

The partnerships help bring down cost structures, while assuring that the facilities are providing the right quality of care, he said, adding that for patients the benefit is increase access to care and possibly cheaper services.

"This type of collaborative is a great way to get involved with one another without getting married and tying the knot," Marino said.

While such partnerships are similar to mergers in that they combine common visions, cultures and operations, they are less expensive and provide an easier out if the union fails, he said.

Aduddell said the five-year term of the deal "was a good and appropriate amount of time to work together." The partnership has the potential to be renewed and extended, he said.

Lambert, with Conway Regional, will leave his role as chief executive officer to become president of the Arkansas Health Alliance, a new corporate entity.

The formation of The Arkansas Health Alliance was also announced Tuesday. The group will work with independent community hospitals and health care systems to lower costs while providing higher quality and lower priced care for communities, according to the news release.

The organization will provide a way for hospitals and health care systems to work together without mergers and acquisitions, Aduddell said.

Business on 08/12/2015

Print Headline: Hospitals to pool management units

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