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Healthy competition.

Healthy Competition

Hot Springs is touted as a mecca for well-heeled retirees and credit card wielding tourists. But if the level of competition is any indication, the health-care industry is perhaps the most vibrant and robust sector of the local economy.

Dueling for preeminence in this $130 million-plus market are St. Joseph's Regional Health Center, a 317-bed non-profit operation whose presence dates back more than a century; and AMI National Park Medical Center, a 145-bed for-profit facility who came to town in 1982.

Since AMI's appearance, the two hospitals have been infected with an increasingly competitive strain of one-upmanship. The symptoms have manifested into a tit-for-tat upgrade of facilities and services.

In 1985, AMI moved into a new 180,000-SF hospital near the Hot Springs Country Club that carried a $39 million price tag. It is adjoined by a 40,000-SF medical offices building under private ownership.

St. Joseph's is in the midst of constructing a new 382,000-SF hospital near the bypass that will hit $54 million. Plus a new $10.5 million medical offices building. Plus a new $3.6 million cancer treatment center. Plus a $2.5 million medical office park.

The overwhelming response from St. Joseph's pays homage to AMI, which has made quite a mark on the local health-care scene. St. Joseph's maintains its traditional hold on a majority of the market, but AMI has made impressive gains during the past six years.

In terms of patient loads, AMI climbed from 36.1 percent in 1984 to 45.9 percent in 1989 while St. Joseph's slipped from 63.9 percent to 45.1 percent. At year-end 1989, St. Joseph's discharged a total of 8,404 patients compared to 7,140 at AMI.

Most of AMI's gains have come in the area of private pay patients who have opted for private rooms and other amenities offered by a new facility. St. Joseph's mammoth building project, which will replace its time-worn downtown complex, is designed to win back some of those patients.

On the fiscal frontier, the Sisters of Mercy have managed to outpace corporate types at AMI. St. Joseph's which operates on a July 1-June 30 fiscal year, registered total revenues of $56.33 million in 1988 and $73.76 million in 1989 and comparative net income totals of $2.41 million and $4.10 million respectively during the same reporting periods.

The numbers at St. Joseph's reflect a 30.9 percent growth in revenue and a 70.1 percent increase in profitability. AMI's 28.4 percent revenue growth trails St. Joseph's, and the for-profit facility tabulated a 9.3 percent drop in net income.

During calendar years 1988 and 1989, AMI reported respective total revenues of $45.76 million and $58.78 million with corresponding net income figures of $2.68 million and $2.43 million.

Personal Touch

In addition to marketshare and dollars and cents, the competition between hospitals can be measured on a personal level with Warner Kass, executive director at AMI; and David Wingfield, COO at St. Joseph's. The two men have been the protagonists in a running battle over health-care turf. The skirmishes have revolved around issues like who should provide Garland County with ambulance service.

St. Joseph's was awarded the contract despite the objections of AMI which argued that the service should remain under the neutral umbrella of county government. The operation has been a profit center for St. Joseph's, but the big draw was never money. The hospital wanted to operate the ambulances, which bear the St. Joseph's name, as true marketing vehicles.

And what do the two health-care execs have to say about each other?

"He's an able competitor and hard worker," states Wingfield, a polished, PR savvy kind of guy. "He wins a few, and we win a few. And hopefully the community benefits from the good competition."

"I do my thing, and they do their thing," states Kass, a hard-edged administrator who reflects a kick-ass-and-take-names persona. "And I try to do mine the best."

The players on the field will change somewhat when Randy Fale (pronounced folly) takes over as the president and CEO of St. Joseph's within a few weeks. He replaces Sister Mary Werner, who held the dual-titled post for nearly two decades before announcing her retirement.

Wingfield, who was a candidate for the top slot at St. Joseph's, will take a hiatus from his role as COO and become an SVP while pursuing a master's degree in health services administration.

St. Joseph's phased out its obstetric services in 1972, leaving the baby delivery chores to Ouachita Memorial Hospital while turning its focus to heart surgery and other cardiovascular services.

That gentleman's agreement toward specialization has remained in place even since AMI bought the license once held by Ouachita County Memorial. AMI continues to enjoy a monopoly on the baby business in Hot Springs for now, however that situation is likely to change in the coming months.

St. Joseph's wants to gear up for obstetrics at its new facility, and AMI isn't keen on that. A cloud of litigation hung over St. Joseph's expansion plans until the two hospital boards got together to work out a compromise.

St. Joseph's agreed not to encroach on AMI's obstetric territory until at least February 1993. When St. Joseph's makes its move, AMI is likely to retaliate by expanding its cardiovascular services to include open heart surgery - an area now exclusively served by St. Joseph's.

"If St. Joe's decided to go into obstetrics, we may have to look at that to maintain our marketshare," says AMI's Kass.

AMI is already in the process of countering St. Joseph's new 10,000-SF cancer treatment facility, which is up and staffed and awaiting state licensing. The Central Arkansas Radiation Therapy Institute could accept an invitation to build a facility on AMI property as early as June 29.

St. Joseph's turned down a similar offer by CARTI and instead will own and operate its own cancer treatment facility. This bold step has the potential of cutting into CARTI's patient load as much as 20 percent when St. Joseph's facility comes on line.

Projections indicate that 300 new patients per year from the Hot Springs service area will need cancer treatment. St. Joseph's has a leg up on capturing a substantial number of these patients who in the past had turned to Little Rock for service.

The effects from a healthy dose of competition in the Spa City appear to be contagious.

PHOTO : Protagonist A: David Wingfield, COO at St. Joseph's Regional Health Center in Hot Springs, a 317-bed non-profit facility run by the Sisters of Mercy for 101 years.

PHOTO : Protagonist B: Warner Kass, executive director at AMI National Park Medical Center, a 145-bed for-profit operation that came to the Spa City in 1982.
COPYRIGHT 1990 Journal Publishing, Inc.
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Hot Springs hospitals
Author:Waldon, George
Publication:Arkansas Business
Date:Jun 4, 1990
Words:1132
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