Freeman Health CEO highlights strategy after 4-hospital acquisition - Talk Business & Politics
Matthew Fry, president and CEO of Joplin, Mo. -based Freeman Health System, said through the acquisition of Springdale-based Northwest Health, the nonprofit health system has doubled its hospital bed count. But. . .
Matthew Fry, president and CEO of Joplin, Mo. -based Freeman Health System, said throughthe acquisitionof Springdale-based Northwest Health, the nonprofit health system has doubled its hospital bed count. But this wasn’t its first significant acquisition. Freeman Health System added four hospitals, totaling 487 beds, and associated outpatient centers and practices and about 2,200 employees in Northwest Arkansas when the $110 million transaction was completed June 1. The health system has been working to ensure that patient care continues without disruption, integrate staff and systems, and develop a five-year plan for the area. “It was a fairly big deal for us,” Fry said. “It’s a transformative move, and we’re really excited about it. We have had a large acquisition in the past in the ‘90s. We acquired Oak Hill Hospital here in Joplin, and that was the last really transformative acquisition that Freeman had endeavored upon. ”He said the health system’s board “enthusiastically leaned into” the Northwest Health acquisition, “and we’re excited to see what ends up developing as a result. ”“Northwest Arkansas is a really interesting market for a lot of reasons,” Fry said. “There’s really steady population growth down there. ”He said Arkansas, Kansas, Missouri and Oklahoma have many health needs and access gaps. “Freeman, as a locally owned, locally governed health system, we feel like we can step into that space and provide very high-quality contemporary healthcare to the communities that we serve,” Fry said. “We saw this as a call to action, and we’re excited to do it, excited to be a part of the Northwest Arkansas market. ”From initial discussions to completion of the deal took about a year. The health system had a non-binding letter of intent in December and a binding asset purchase agreement, or definitive agreement, by late February or early March. Fry said Freeman Health System sought the acquisition of Northwest Health, owned and operated by Franklin, Tenn. -based Community Health Systems. “They were good partners to us throughout the acquisition process, the due diligence process, the finalization process, and the integration process,” he said. “They for their own reasons were looking at this as a good opportunity as well, and I think it was mutually beneficial for both parties. And ultimately it allows for us to continue to operate those hospitals in Northwest Arkansas and hopefully enhance the services that we provide down there. ”Fry said the staff integration “is going really well. The Freeman Health System team members in Northwest Arkansas are really excited to be a part of the team, and that always helps. “Cultural integration and operational integration is always the most difficult challenge with any acquisition, particularly one of this size and magnitude,” he said. “We’ve effectively doubled the size of Freeman Health System with this acquisition, from a hospital bed perspective. But everyone’s engaged. Everyone’s focused. Yes, there is a tremendous amount of work that lays ahead of us. But the teams have already collectively done an amazing job of working through the integration in a very positive and a very constructive manner. ”He said he expects some natural attrition because of the transaction, but there are no plans for layoffs or service line closures. ‘CONTINUITY OF CARE’With any health system integration, Fry said the greatest concern is “ensuring that we can maintain continuity of care for our patients and provide safe healthcare to our patients, and hopefully limit any disruptions to access. And I think we’ve done that very well in Northwest Arkansas. ”From the start, the health system has worked to ensure that the inpatient and outpatient facilities in Northwest Arkansas “are functioning effectively, that we’re able to maintain access to our patients, and that we’re able to provide exceptional care to everyone we serve,” Fry said. “We’ve already begun strategic planning of developing a five-year strategic plan for the Northwest Arkansas market. ”The plan’s structure comprises five points. This includes excellence in care, with a focus on the quality of care the health system provides. People first, looking at what the health system can do to support its staff, demonstrating how much they mean to the organization and helping them flourish in their careers, personally and professionally. Strategic growth is another point, and it is taking shape through this acquisition. “There are a number of other considerations of the strategic growth action plan for Northwest Arkansas, and really for Missouri and Kansas, that are in various stages of discovery that, as they come to fruition, we’ll be able to talk more publicly about,” he said. Another point in the plan is community engagement: “really leaning into the community in a purposeful way and being good stewards, not only of the resources that we have but really helping to carry the community along with us,” he said. The fifth point is operational integrity. “It’s all about being really good, efficient operators and good stewards of the resources that we have within the organization,” Fry said. He said Freeman Health System and Community Health Systems have a transitional services agreement that has allowed the health system to maintain continuity in insurance, billing and collections. “We have a lot of work to do in that space,” he said. “And we’re going to continue to optimize, but so far things have been going well. ”The hospitals, outpatient clinics, and practices formerly affiliated with Northwest Health transitioned to a nonprofit as part of the transaction. However, Fry said some aspects of nonprofit operations will take time to change. Property tax abatement, for example, will take some time to be recognized in Arkansas for those facilities. “As a nonprofit, and given the disproportionate share status of at least a few of those hospitals in Northwest Arkansas, we will be eligible for 340B drug pricing,” Fry said. “And that also will take some time because we need to file, I believe, two cost reports before we can actually get 340B recognized and fully functional. So that will take about 18 months, but that’s in process, and we’re going to continue to work through that. ”‘ACCESS GAPS’The health system’s acquisition of Northwest Health is its first in Arkansas. Asked about plans to expand further into Arkansas, Fry said it’s partnering with other organizations in Northwest Arkansas and the four-state region to help “in shoring up access gaps and serving the needs of our patients. ”He said this might “look different in different areas, but honestly, we’ll need to explore those opportunities as they come to light, and when we do decide to pursue something, or once it’s to a point where we can publicly disclose that and talk about those kind of things in more detail, then we’ll be sure to do that as quickly and as transparently as possible. ”Some of the health system’s previously released long-term goals for the newly expanded system focused on addressing various healthcare needs, including the growing need for behavioral healthcare, maternal care and specialty care. Fry said the health system has a comprehensive behavioral healthcare provider, Ozark Center, and “we intend to bring all of the great resources and programs that our CEO of Ozark Center, Vicky Mieseler, has developed over the last decade into Northwest Arkansas so we can hopefully provide additional resources to the communities in Benton County and Washington County. ”He expects this work can initially be done within the health system’s existing footprint here but over time might need to expand into new space. The health system also intends to increase access to maternal care and expand specialty care services, including cardiology, oncology and orthopedics. Fry said he expects the health system will do this through a combination of using existing facilities and expanding to meet area demand and growth. Another goal included the health system’s plans to strengthen recruitment and retention efforts to educate, train and hire the next generation of providers. Fry said he’s seeing a lot of interest from providers who want to work with the health system here. “We have four interviews this week alone of physicians that are interested in joining Freeman Health System,” he said. “I think this goes back to our philosophical belief that we really want to partner with our physicians. We want to partner with our staff, our colleagues, we want to partner with internal and external stakeholders. And I think that provides an exciting environment where people feel like they’re a part of the process, and they’re a part of the solution. ”The health system is working to change the lettering on the buildings and signs at the acquired facilities in Northwest Arkansas. The health system is also working with the Arkansas Department of Transportation to update highway signs. Fry said he’s hoping the work is completed within two to three months. Related