High-profile investments driving new era of medical services in NWA

Highlands Oncology, the region’s largest cancer-care provider, is preparing to invest significantly to expand its footprint in Northwest Arkansas. It’s no secret why — rapid population growth.

“It’s not going to slow down,” Highlands CEO Jeff Hunnicutt said. “It’s only going to keep growing.”

Highlands paid $13.6 million in August for approximately 51 acres along southbound Interstate 49 in Rogers. The land is along South Bellview Road east of The District at Pinnacle Hills. Development plans are not imminent but include a cancer care campus anchored by a state-of-the-art, 150,000-square-foot building. Highlands has standalone facilities in Springdale — which opened three years ago — and Rogers that total nearly 190,000 square feet and additional facilities in Fayetteville.

It’s not just Highlands sinking significant dollars into expanding its Northwest Arkansas operations. Other major healthcare brands are making substantial investments, leading to new buildings, more jobs and additional services. Some notable examples:

The University of Arkansas for Medical Sciences (UAMS) broke ground Sept. 15 on a 185,000-square-foot orthopedic and sports medicine facility in Springdale.

St. Louis-based health system Mercy is investing $500 million in the second phase of its healthcare expansion in Northwest Arkansas. Mercy NWA invested $277 million between 2016 and 2019.

The Alice L. Walton School of Medicine and its sister organization, Whole Health Institute, are under construction in Bentonville. The two buildings total 229,000 square feet.

Earlier this year, Little Rock-based pediatric healthcare organization Arkansas Children’s announced a $318 million expansion plan. More than $80 million will go toward Arkansas Children’s Northwest for a construction project to expand the Springdale hospital.

All these happenings and others will address a growing population, which some analysts say will put the Northwest Arkansas metro — the nation’s 100th largest metro with a population estimate that’s approaching 600,000 — in the neighborhood of 1 million people sometime in the 2040s.

“We’re on a really good path,” said Mercy Arkansas’ strategic growth officer, Eric Pianalto. “All of us are able to add services that just weren’t possible [a decade ago] to support from a quality or cost perspective because we lacked population density. Now, we have that. And, we are starting to see more transfers for care into the area where once we were primarily exporters of highly specialized services.”

INVESTMENT IMPACT
Nelson Peacock, president of the influential nonprofit Northwest Arkansas Council, hopes the numerous investments will help unlock the region’s hidden healthcare potential.

About 30 regional business leaders, including Sam Walton, Don Tyson, Mark Simmons and J.B. Hunt, founded the council in 1990. Their idea was to work together to advance the regional economy. The council partners with stakeholders across the region, state, and nation in priority areas, including workforce development, infrastructure improvement, talent recruitment, education and healthcare.

Peacock points to a health sector study released in January 2019 prepared for the council by the consulting firm Tripp Umbach. Among numerous findings in the 56-page report, the most critical was the need for targeted health-sector growth initiatives to strengthen the region’s economic future. Advancing the healthcare sector could transition Northwest Arkansas into a “healthcare destination,” add thousands of jobs over 20 years and increase the number of cardiologists, neurologists and endocrinologists who live and work in the region.

The report valued Northwest Arkansas’ healthcare sector at $2.7 billion in annual economic output. But it was “missing” $950 million, mainly attributable to patients leaving the region for specialty care services and relatively few patients traveling to Northwest Arkansas to receive healthcare services.

“That was the thrust of the report, to understand where we stood and what was needed if we wanted to turn that around,” Peacock said. “That’s stimulated a lot of activity to help address that. We have been focusing on the building blocks of setting the stage for this kind of growth and the ability to make these kinds of investments.

“Many of these [investment] decisions are made on the business end of what they can afford. But I think the report showing the shortages and where we were headed reinvigorated much of the work. The investments that have been made and will continue have created this critical mass and started the process of people looking out considerably and what this region will look like from a healthcare perspective over the next five to 10 years.”

Peacock said it’s too early to tell — less than five years since the Tripp Umbach report’s release — if the recent string of healthcare investments alters the region’s economic projections.

He said the council has started initial work on an update report scheduled to be published in the first quarter of 2024.

“I don’t know if, at this early stage, we have started to reverse those [healthcare] trends,” he said. “As more investment comes online and [from] the investments already made, you will start to see that happen. I think that’s why we need to do the report.

“A lot of this is complicated analysis, and we want to take stock of where we’ve come from.”

FILLING THE GAPS
Pianalto said Mercy NWA’s Phase II investment work over the past 12 months hasn’t yet had many visible projects, but a lot has happened to fill in what he calls healthcare gaps.

“Our job as healthcare providers is to care for the entire population,” he explained. “Our population growth creates new gaps in healthcare every day.”

Pianalto said Mercy NWA has added 37 new physicians in various specialties in the past year, aligning with a goal of 100 over five years, and built out shell space in multiple locations from the first expansion phase a few years ago. The Rogers hospital’s NICU, built in 2019 on the fifth floor, is expanding.

Mercy NWA also is investing in its neurosciences program and continues to add staff and recruit surgeons focused on cancer care. A standalone cancer care center is still part of the Phase II investment planning.

“We’re making sure we prioritize the right things to fill the healthcare gaps,” Pianalto said. “But that work [cancer center] is ongoing and plans are developing.”

Pianalto, who’s worked for Mercy for nearly 30 years, said the financing mechanism for healthcare investments doesn’t necessarily happen on a fixed time frame.

“The money you need to match the population growth doesn’t always line up,” he explained. “When you consider that we will almost double our population over the next 15 to 20 years, how do we get more creative in providing care, making it affordable, and [also] staying in business for the next 100 years?

“Those equations come into play. Virtual care [and] care at home will be in play.”

Hunnicutt was hired in October 2018 as Highlands Oncology’s first chief executive officer. That was shortly before the region’s “healthcare destination” topic started gaining momentum.

Leaders in Northwest Arkansas have long been known for collaboration and innovation. Hunnicutt said he’s found that to be true among healthcare groups to try and best prepare the region for a robust economic future.

“Although some of these entities are competitors, you see a collaborative effort,” he said. “People coming into the same room with the common vision of improving healthcare in Northwest Arkansas.”