New foundation emerges from sale of Sparks Health System

The Fort Smith Regional Healthcare Foundation is the new name of the former Sparks Health System, but more is unknown than known with respect to what will emerge as a mission for the new foundation.

Foundation board members — all former members of the Sparks Health System board — held their “first” meeting Monday (Dec. 21) at the offices of John Taylor Financial-Sterne Agee. Taylor is a board member.

Naples, Fla.-based Health Management Associates formally acquired Sparks Health System Nov. 30 in a deal valued at $138 million. A definitive agreement to sell Sparks to HMA was signed Nov. 4. The two parties announced Aug. 14 their intent to seek the transaction.

HMA is a publicly held company that reported $104.05 million in net income on total revenue of $3.418 billion for the first nine months of 2009. The company operates 55 hospitals — including Sparks — in 15 states and employs about 34,000. HMA also operates Summit Medical Center in Van Buren and two Van Buren clinics — Cornerstone Family Clinic and Internal Medicine & Associates.

The deal will leave the new foundation with millions of dollars to potentially invest in an endowment that will then be used to support “health care initiatives” in the Fort Smith region, noted board chairman Judy Boreham. Those initiatives could include supporting scholarships for individuals seeking advanced medical training, the Community Dental Clinic in Fort Smith and health education programs in area schools.

Boreham and Tom Webb, recently hired as executive director of the foundation, met with media outlets Monday to discuss the process in seeking the new direction.

“We will start evolving after year one, and in year two we can start communicating to the community what we intend to do,” Webb explained, adding that the board has had only three weeks to “start unwinding the business.”

Webb was employed for 31 years by Fort Smith-based OK Industries, a regional poultry production company. He worked for about 12 years of that as president of the company. Webb has also served as the chairman of the Sparks Health System board and chair of the board’s finance committee.

The new foundation has several legal and paperwork obligations and hurdles, not the least of which is that a portion of the funds from the sale of Sparks Health System to HMA must remain in escrow for six years to cover specific warranties and guarantees of the terms of the sale. And then there is the question of the Sparks Development Foundation.

“At that time (when funds from the sale are ultimately collected and secured), the relationship between the FSRHF and the ‘old’ Sparks Development Foundation will be revisited,” noted item 11 from an 11-item “What is Happening?” list Boreham and Webb provided the media.

In the interim, a new name will be selected for the Sparks Foundation and the FSRHF board will review its rules and mission. HMA, according to the list, obtained exclusive rights to the “Sparks” moniker.

The list also revealed that the sale of Sparks Health System was a pure asset sale, with Sparks Health System — now the new foundation — retaining liabilities and being responsible for collecting its account receivables.

Boreham said the initial focus is on “making sure the legal and financial ducks are in a row,” but she is eager to begin formal consideration of the future mission of the foundation.

“We’ve yet to sit down and begin to dream about the future … and that’s really what we’re working for,” Boreham said.