UA Board meets today on UAMS-CARTI breakup | Arkansas Blog

Thursday, April 19, 2012

UA Board meets today on UAMS-CARTI breakup

Posted By on Thu, Apr 19, 2012 at 10:29 AM

The University of Arkansas Board of Trustees will meet this afternoon in a called telephone meeting on an important matter — no, not the contract for a new football coach.

They'll be considering a deal to buy the UAMS out of its joint operation with the Central Arkansas Radiation Therapy Institute. A previous price of $10 million may have been bargained down a bit. I expect documents after a while. The campus will then have to spend perhaps $10 million to buy its own radiation equipment to go it alone in that business.

This is viewed a touch nervously in some quarters. $20 million or so isn't small change. The hospital is also talking about $87 million in IT improvements. Nine months into the fiscal year, the hospital remains in the red for the year, though recent months reportedly have edged into the black. If a bond issue is contemplated to pay for these new costs, there'll be questions about the revenue stream to back the bonds. The hospital spent $13 million on a consultant last year who was to map a path to profitability. Critics of the effort believe it has produced no meaningful reduction in payroll. These are potential talking points in today's session.

UPDATE: Here's the proposed deal for UAMS and CARTI to separate, with UAMS paying $9.5 million. It was approved at the evening meeting unanimously. UAMS faculty received this description:

Dear UAMS Family,

At a meeting this evening, the University of Arkansas Board of Trustees approved a nonbinding Memorandum of Understanding between UAMS and CARTI and authorized UAMS to purchase for $9.5 million all assets associated with the CARTI clinic located on our campus. The transaction is set to close June 29.

Following the sale, radiation therapy at UAMS will be provided solely by UAMS faculty physicians, physicists and other employees. Many of the employees who formerly worked for CARTI on the UAMS campus will become UAMS employees and we are pleased to welcome them to our family.

UAMS and CARTI have had a long association dating back more than 40 years. Over the years, CARTI has opened seven separate facilities across the state. In 2001, they began operating a radiation therapy center on our campus. That center was constructed by UAMS and leased to CARTI.

Last August, CARTI, Little Rock Hematology Oncology and Radiation Oncology Associates announced that they were partnering to form the state’s largest private practice multi-specialty cancer group with plans to build a new cancer treatment center in Little Rock. Owned by CARTI, that organization will include radiation oncologists, medical and surgical oncologists and diagnostic radiologists with the possibility of adding other cancer specialists.

UAMS subsequently determined that we wanted to conclude the relationship with CARTI and began negotiating with them to purchase equipment and other assets and terminate our lease agreement. By operating the radiation therapy center solely as a UAMS program, we feel we will be better able to reach our overarching goal of achieving National Cancer Institute designation for the Rockefeller Cancer Institute in the future and ensure the high level of academics, service and research innovations that designation requires.

We wish CARTI well in its new endeavor and look forward to our increased ability to provide comprehensive cancer care for our patients in the future.

Sincerely,
Dan Rahn, M.D.
UAMS Chancellor

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