Sparks Health System Merges Clinic with Hospital

The deal between Fort Smith’s Sparks Regional Medical Center and Holt-Krock Clinic is final. Sparks president Michael Helm announced on Aug. 2 the completion of the deal and the resulting creation of Sparks Health System.

Sparks now has more than 2,800 employees, including the 85 physicians who previously were part of Holt-Krock.

Holt-Krock made national news in the medical world after the relationship between the clinic’s physicians and its owner, PhyCor Inc., soured. PhyCor, a Nashville,-Tenn.-based physician practice management company, purchased the clinic in 1994. At that time, the clinic had 145 physicians. As part of the arrangement, PhyCor paid $47 million.

But the physicians contended PhyCor’s billing and computer system was inadequate. They were also unhappy about non-compete clauses in their contracts that prevented them from opening competing practices within a 30-mile radius of the clinic for 18 months.

By late last year, more than four dozen doctors had left the clinic.

On Jan. 26 this year, Sparks announced it had reached an agreement with PhyCor to buy the clinic. Terms of the sale included PhyCor assuming responsibility for a $1.7 million operating loss incurred at the clinic during the fourth quarter of 1998. Sparks got the 300,000-SF building that had been Holt-Krock’s. The sale effectively ended all litigation between the various parties.

Sparks officials had said the deal gave it the right to use the Holt-Krock name, but they apparently decided to instead use the Sparks name. The Holt-Krock building was renamed Sparks Medical Plaza.

The newly christened Sparks Health System now includes, in addition to the hospital and the clinic, three rural clinics, Booneville Community Hospital, a home-health program, the Sparks Development Foundation, the Marvin Altman Fitness Center and Sparks Athletic Club. In addition, there’s PremierCare, a provider-sponsored managed care organization.