Baptist Health CEO says Sparks acquisition will lead to stability

Baptist Health CEO Troy Wells said his hospital system’s acquisition of two campuses in the Fort Smith region was tricky due to negotiations with a publicly-traded company, but he expects a period of stability to guide the transition.

Appearing on this week’s edition of Talk Business & Politics, Wells said that purchasing Sparks Health System in Fort Smith and Van Buren from publicly-traded Franklin, Tenn.-based Community Health Systems left a few unknowns that made the deal a bit more difficult to close.

“There’s a lot you don’t have access to during due diligence, because they can’t let anybody know you’re doing it,” said Wells, referencing CHS’ requirement to disclose to investors. “So you don’t get a lot of context and culture questions answered. You get numbers, and that makes it a little bit difficult for us, but it turned out to be a really great decision.”

After announcing the purchase in July, the two hospital groups closed their deal on Nov. 1, which added nearly 600 beds and 1,600 employees to the Baptist Health network. Little Rock-based Baptist Health operates 11 hospitals and employs about 11,000 workers.

Wells said he’s on a “listening mission” right now as Baptist and Sparks integrate. He expects “nothing dramatic on the surface” to change with operations in the short-term.

“We have definitely heard from the employees to community members, they’re, of course, quick to tell you how many CEOs they’ve had run through there in the past 10 years, or quick to talk about the transactions that those facilities have been through with publicly traded companies,” he said.

“So they’re looking for stability. And we’ve had tremendous amount of support, and I think people recognize, while they’re not as familiar with our brand out west, they still know us and they’ve done their homework, and they’re looking forward to that stability and, to your point, I mean, we pride ourselves on stability of leadership, in culture and the staff and the community recognize it and are wanting that,” Wells added.

Harrison Dean, a 35-year employee with Baptist Health, will serve as the Region President of Western Arkansas/Eastern Oklahoma for Baptist. Former Sparks CEO Dan McKay resigned in July to take a job in Kentucky. Dean will oversee the system’s hospitals in Fort Smith and Van Buren as well as affiliated physician clinics.

Dean previously served as Senior Vice President of Regional Hospitals and as Administrator of Baptist Health Medical Center-North Little Rock. He was instrumental in the construction of Baptist Health Medical Center-Conway, which opened in 2016.

HEALTHCARE HORIZON
Wells also discussed the future of healthcare in the dynamic, ever-evolving industry. With changes in Congress, an upcoming legislative session, and a variety of legal and regulatory battles taking place, Wells said there’s a lot to monitor.

A lawsuit by several states to declare the individual mandate, and therefore the Affordable Care Act, unconstitutional is his biggest concern. Arkansas, through Attorney General Leslie Rutledge, is one of the state’s suing to overturn the ACA.

“The biggest one is if the individual mandate ends up throwing the whole thing out. That could be pretty disruptive. And then it’s back to more lawsuits, I suspect,” Wells said, referring to appeals that could last for years.

He’s also wary of the trend unfolding with Arkansas Works, the state’s Medicaid expansion program. More than 12,000 participants have been removed from Arkansas Works’ healthcare rolls in the last three months for reasons such as non-compliance, the inability to be located, and due to rising incomes or successful employment.

“If that continues at the pace it’s been on, it raises quite a few concerns. And I think it’s just real important that we support our legislature and our governor to make sure that we take steps to not have people roll off inappropriately,” he said. “My hope is, by the way… that they’re all finding jobs and going to work and don’t need it. That’s what we all want.”

You can watch Wells’ full interview below.