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Baptist Medical Center is state's most profitable.

BAPTIST MEDICAL CENTER in Little Rock is again the No. 1 hospital in Arkansas, according to Arkansas Business' semiannual rankings.

The state's 98 hospitals are ranked by their net income for their most recent fiscal year. In the past, the hospitals have been ranked by number of beds.

Baptist Medical Center, the state's largest hospital with 739 beds, had a net income of $15.8 million last year. St. Vincent Infirmary Medical Center in Little Rock, the second largest hospital with 595 beds, was second in net income with $13.5 million.

The information is taken from the hospitals' Medicare cost reports, most of which are filed with Arkansas Blue Cross and Blue Shield.

Net income can be misleading because the net income figures on the cost reports are before taxes. So for-profit facilities actually may earn as much as 50 percent less than the figures might indicate. Non-profit hospitals such as Baptist Medical Center and St. Vincent are not required to pay taxes.

Some smaller, for-profit hospitals still manage to be very profitable. Central Arkansas Hospital in Searcy, with only 169 beds, is the seventh most profitable hospital, with a net income of $7.5 million in 1992. In 1991, it had net income of more than $5 million.

David Laffoon, Central Arkansas' chief executive officer, credits Medicare's ratings for the hospital as the major reason for its impressive profitability.

He says Central Arkansas is one of the few hospitals in the state that Medicare reimburses under both its urban and rural referral-center rates.

Central Arkansas, owned by American Medical International Inc. of Dallas, is considered a rural referral center because it treats patients for the major medical subspecialties. It also qualifies for the urban rate because of the high number of patients it treats for different sicknesses and because it is contiguous to the Little Rock Metropolitan Statistical Area, which includes neighboring Lonoke County.

Last week, Central Arkansas began construction on a 20-bed rehabilitation center, to be managed by Rehabilitation Care of St. Louis. The $450,000 project consists of renovation of one area of the hospital and will not increase its number of beds.

"Under the current Medicare system, there is an advantage to get those patients out of the hospital and into another level of care," Laffoon says.

But the main reason the hospital is building the center, Laffoon says, is to provide its patients with an alternative to driving to Little Rock or Jonesboro for rehabilitation.

Three Rural Health Centers

"We offer everything from primary care, acute care, active home health care units and soon we'll have rehabilitation," says Laffoon, a Searcy native who is in his second stint as CEO at Central Arkansas.

It also has the only cancer center between Little Rock and Jonesboro.

Central Arkansas treats patients from as far away as Fairfield Bay, a distance of 54 miles.

It has already established three rural health clinics.

The Rosebud facility, Laffoon says, was the first rural health clinic in the state owned by an Arkansas hospital. The other two are in Fairfield Bay and Greers Ferry. It is considering building a clinic in Cabot.

Even though the two largest hospitals are also the most profitable, size does not guarantee earnings.

Jefferson Regional Medical Center in Pine Bluff, the fourth largest hospital in the state, lost $2.4 million in its fiscal year that ended June 30, 1992. St. Joseph's Regional Health Center in Hot Springs, the 15th largest hospital, lost more than any other hospital in the state, almost $10 million in its 1992 fiscal year. St. Joseph's moved into a new facility in early 1992.
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Title Annotation:Arkansas
Author:Smith, David (American novelist)
Publication:Arkansas Business
Date:May 10, 1993
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