Hopitals in Fort Smith Lead Northwest Rankings

Springdale’s Northwest Medical Center surpasses Fayetteville and Rogers hospitals

Fort Smith’s two leading hospitals, the largest in the region, again top the Northwest Arkansas Business Journal’s list of hospitals.

Ranked according to net income, Sparks Regional Medical Center and St. Edward Mercy Medical Center are listed at Nos. 1 and 2, respectively, the same spots they occupied in 1998’s list.

But since last year’s list, Northwest Medical Center in Springdale has leapfrogged into third place over its two biggest competitors in Northwest Arkansas – Washington Regional Medical Center in Fayetteville and St. Mary’s Hospital in Rogers.

It couldn’t be determined whether Northwest’s financial condition was bolstered by its sister hospital, Bates Medical Center in Bentonville, which was acquired in 1996. The latest figures available for Bates from annual Medicare Cost Reports are from 1996.

Nonetheless, the hospital’s net income, according to the reports, increased to nearly $5.7 million for the fiscal year ended June 30, 1998, up 247 percent from the previous year when the hospital reported a $2.3 million income.

Washington Regional slipped to fourth place with a net income of almost $4.9 million for the year ended Dec. 31, 1998, an increase from the $3.7 million it reported the previous year.

St. Mary’s Hospital in Rogers reported a net loss of $530,000 for the year . But that’s the result of a $6.6 million write-off that came from a change in the hospital’s accounting methods. Without that write-off, net income would have been nearly $6.1 million, which would have put St. Mary’s in third place on the Journal’s list.

At the same time, Northwest’s occupancy rate rose more than 10 percent, from just under 47 percent in 1997 to just over 57 percent in 1998.

Washington Regional’s occupancy remained stable, at about 59 percent, as did that of Sparks Regional in Fort Smith at about 64 percent.

St. Edward Mercy in Fort Smith improved its occupancy rate from about 57 percent for 1997 to 63 percent in 1998.

More recent occupancy rates weren’t available for St. Mary’s in Rogers, which reported an occupancy rate of 39 percent for the year ended June 30, 1997.

The comparisons aren’t necessarily for the same time frame. Some hospitals use calendar years rather than fiscal years – Washington Regional’s numbers, for example, are for the year ended Dec. 31, 1998, while Northwest’s are for the year ended June 30, 1998.

Hospitals across the nation are bracing for continued reductions in their reimbursement rates, thanks both to the federal Balanced Budget Act of 1997 and to still-increasing competitive pricing as a result of managed care.

The American Hospital Association estimates the budget act will cost hospitals a collective $71 billion through 2002, the fifth and final year for which the law currently applies.

The Arkansas Hospital Association expects its members to see reductions totaling $450 million as a result of the Balanced Budget Act.

But that hasn’t stopped the building projects for many of the region’s hospitals.

St. Edward Mercy in Fort Smith, for example, is about to begin a $70 million project that will double the size of its campus.

The existing facility was a state-of-the-art design for in-patient care when it was built in 1975, spokesman Chip Paris says. But times have changed, and more procedures are being done on an out-patient basis.

The new facilities will include centers of excellence for heart patients, for women and children and for out-patient care. Groundbreaking for the new buildings is scheduled for Aug. 23, and completion is expected to take 24 months. The new centers should open during the summer of 2001.

Washington Regional, too, has announced plans to build a new hospital complex. The $70 million project will be built in North Hills Medical Park, where relocation of a portion of North Hills Boulevard began April 30.

Bentonville also expects to get a new hospital facility to replace the existing city-owned building currently used by Bates. Quorum Health Group, which owns the Northwest system of which Bates is a part, has committed to the project. Although no site has been specified, the company has agreed to the city’s request that it be within the city limits.