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Healthstar, Methodist of Jonesboro nearing handshake.

Any day now, it should be official: Methodist Hospital of Jonesboro will be part of Healthstar Ultima - The Arkansas Health System.

Last month Methodist Health Systems Inc. of Memphis officials said the Jonesboro hospital was being purchased by Healthstar, a statewide managed care partnership of medical facilities owned by Tenet Healthcare Corp. and St. Vincent Infirmary Medical Center of Little Rock.

A. Joe Timmons, Healthstar's executive director, says, "We have made a verbal offer to acquire the hospital and all of its assets in Arkansas. We are awaiting written agreement from Methodist [Health Systems Inc.] to proceed. Call me tomorrow."

On Monday: "Keep checking with me."

Tuesday: "You can bug me 'til I have something."

The public relations people say, "There's no official release from Healthstar. The deal is still in negotiations, but we expect the legal details to be worked out this week. It's a major acquisition."

Indeed it is. While no purchase price is available, the 104-bed hospital is a moneymaker - it made $1.4 million last year on revenues of $38.5 million, putting it in about the top third of all Arkansas hospitals.

Methodist has an annual payroll of $10 million for 345 full-time staff members, including home health employees and rural health clinics.

It's doing a booming baby business - there's been a 100 percent increase since it opened its Women's Center in 1990 - and last year there was a 12 percent increase in outpatient visits and 6 percent increases in surgeries and number of patients admitted overall. Its home health care program recorded a 39 percent increase over 1993.

The hospital has satellite facilities in Forrest City, Cherokee Village, Weiner, Trumann and Senath, Mo.

Other Arkansas hospitals already owned by Tenet include Central Arkansas Hospital in Searcy, St. Mary's Regional Medical Center in Russellville and National Park Medical Center in Hot Springs.

Methodist recently began spreading the word it was interested in selling its only Arkansas facility, and Healthstar responded with its offer. One observer says once a deal is struck the transition should take about 60 days.

Ensuring Long-Term Viability

The deal seems to make sense for both parties.

"Methodist Hospital of Jonesboro has been a strong and valuable facility to Methodist Health Systems," says Maurice Elliott, MHS president and chief executive officer. "Much of this is a credit to the medical staff and associates of the hospital."

But, he adds, "The association of Healthstar was felt to be the most effective way to ensure the long-term viability of Methodist Hospital of Jonesboro."

Hank Walkley, Methodist's administrator, says, "We presently work with a number of insurance companies and offer managed care products on a regional basis, but in Arkansas we felt it was important to have a statewide network.

"We believe the market will be state-wide. Because we were the only Arkansas hospital as part of Methodist in Memphis, it seems to make more sense for us to become part of this system than to be just one in the state."

Healthstar's network includes 28 hospitals. As another plus, Walkley notes Tenet is the second-largest hospital company in the world. "That will provide us with better access to capital to make further developments in Jonesboro."

Robert Howerton, Jr., senior vice president of Health and Welfare Ministries of MHS, says, "It is significant that Healthstar has agreed to support the social principles of the United Methodist Church and will continue the chaplaincy program at MHJ."

Walkley says the pending owners have committed to keep top management in place and maintain its list of physicians. "They're not looking to make any changes initially," he says. "They want to get in here and thoroughly study the situation."
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Article Details
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Author:Ford, Kelly
Publication:Arkansas Business
Date:May 29, 1995
Previous Article:'Simple' medical billing statements can be perplexing.
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