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Thursday, August 30, 2012

UAMS, St. Vincent plan affiliation: Update 2

Posted By on Thu, Aug 30, 2012 at 10:33 AM



The University of Arkansas for Medical Sciences released this morning a Letter of Intent to be signed by UAMS and St. Vincent Health System to affiliate "to better serve the health care needs of the State of Arkansas."

The letter says UAMS and St. Vincent would form a "jointly owned and governed network," with sharing of "infrastructure services," "clinical support services," jointly operate "important and costly clinical service" and a "clinically-integrated network" that would include joint contracts with doctors. There may be joint services at St. Vincent West "and possibly other locations."

The affiliation would apparently combine adminstrative functions, according to a consulting contract with Deloitte drafted Aug. 28.

The governor's office has the plan under review and would have to sign off on any merger of the state-owned hospital and the Catholic Health Initiatives-owned St. Vincent.

This will be updated as the Times gets more information.


Chancellor Dan Rahn said in a brief interview just concluded that UAMS is "just at the very beginning of this process," and he declined to be specific about the benefits of the affiliation or exactly what form it might take. The Legislative Council will have to approve the contract with Deloitte. UAMS has informed the attorney general's office of its negotiations with St. Vincent as well as the governor's office, and depending on the form the affiliation takes, Rahn said, the legislature could be involved at some point.

It seems that one of the most important questions — besides the issue of women's health care given the restrictions a Catholic hospital puts on reproductive services — is how can UAMS make sure that taxpayer dollars it receives don't go to support a private hospital if it were to affiliate with St. Vincent? Rahn: "That's one of the many questions that we have to work through." Would the affiliation satisfy anti-trust laws? What other legal obstacles are there? "Quite frankly, we do not know right now."

"We're not talking about a merger. We're not talking about either organization acquiring the assets of the other," Rahn said.

The letter of intent's refers to a "jointly owned and governed network," but Rahn said that would concern "clinically integrated networks. We need to do that to be able to function effectively in a bundled payment environment."

In a draft document "Questions about the UAMS-St. Vincent Partnership" released today, the introduction states that:

Generating the resources necessary to fund current operations and secure funding for strategic investments for the future is becoming increasingly challenging due to the finances of health care, the increasing numbers of uninsured individuals, flat or dwindling state support, concerns about tudent debt that constrain tuition increases and flat or decreasing federal research budgets. ...

The burning platform for UAMS is whether our clinical program will be able to thrive and continue to support all aspects of our mission in the future given the challenges above. Partnership with SVI could offer much to ensure that stability of our clinical platform if we have shared goals and shared vision for the future. As health systems at present we have complementary strengths in many areas.

UPDATE 2: St. Vincent Health System CEO Peter Banko tells us that the proposed affiliation between his hospital and UAMS has yet to take shape, though he can envision “superficially” collaboration at, for instance, UAMS’ Rockefeller Cancer Institute, which he called a “gem in Arkansas,” and St. Vincent’s Jack Stephens Heart Institute at St. Vincent.

Banko also characterized the conflict between how the Catholic hospital handles women's reproductive health care (no insurance coverage for contraceptives or abortions for employees, no contraceptives or abortions available to patients) and UAMS policy as a "non-issue." He said the hospitals will study “what the magnitude of benefit” for an association would be, “what the business case for this is.” Banko said his hospital’s “guiding principal” is to increase access to care, with better quality, lower cost and enhanced by research. “Anything that compromises their [UAMS] public identity and our Catholic identity … if it does it’s not worth doing.”

If the governor expands Medicaid and if the Affordable Care health reform is allowed to stand, hundreds of thousands of Arkansans not now insured or adequately insured will be added to Medicaid or insurance exchange rolls. “Anywhere you can partner with somebody” to handle the increased access would be wise, he said.

Other savings could come in technology. UAMS has the only 3 tesla MRI in Little Rock; "do you really need two?" he asked.

Banko cited the collaboration between the University of Iowa and Mercy Medical Center, which is jointly owned by Catholic Health Initiatives (St. Vincent’s owner) and Trinity Health as an example of how the UAMS-St. Vincent collaboration might work.

If there are savings to be had, won’t they come in the form of jobs lost? Banko said he and Chancellor Rahn had talked about that possibility. “You may see some contraction in some areas. The goal would be to add jobs,” including doctors and researchers.

One job of the consultants is to determine where public dollars flow into UAMS, but Banko said "we're not looking into that in this phase." What happens on the campus of UAMS is subject to FOIA; will St. Vincent answer to the FOIA as well in its activities there?

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