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Medical maneuverings.

1991 Was Highlighted By Changes At The Top As Competition For Patient Services Grew

Call it the medical industry's version of "Who's On First?"

The comings and goings at Arkansas health-care facilities in 1991 dominated the news.

* At St. Vincent Infirmary Medical Center at Little Rock, longtime president and chief executive officer A. Jack Reynolds announced his resignation.

He officially steps down at the end of the year.

* The state's most profitable hospital, Baptist Medical Center at Little Rock, lost its senior vice president and administrator.

At the same time, the executive vice president of the Baptist Medical System Foundation also resigned.

* Little Rock's newest private psychiatric hospital, CPC Pinnacle Pointe, went through an administrative change before the doors even opened.

* Another psychiatric facility, Charter Hospital of Little Rock, announced a change at the top of the ladder, too.

Sam Morse, formerly administrator of the Arkansas State Hospital, became administrator of the once financially troubled hospital in May.

* At Little Rock's BridgeWay psychiatric hospital, Larry Ashley was fired as administrator in April.

That same month, he was charged with first-degree murder in the death of his wife, Debbie.

With the notable exception of St. Vincent, most of the health-care facilities have stopped their upper-management merry-go-rounds. New faces have been hired.

At St. Vincent, which ranks behind Baptist as the state's most profitable health center, employees are still awaiting announcement of their new CEO.

Reynolds will remain with the hospital in an advisory role through the end of 1992.

But there's no changing his mind about retirement.

More and more medical malpractice lawsuits, Medicaid and Medicare funding problems and continual searches for top personnel have frustrated Reynolds for good.

"You get a little tired of it," he says. "I think there is some sort of cumulative effect. Ten years ago, I would have wrestled with it.

"Today, it's more and more of an aggravation."

Deadline Scrapped

A six-member search committee was to have found Reynolds' replacement by January. The committee is made up of St. Vincent board members and those of the parent Sisters of Charity of Nazareth Health Corp. at Louisville, Ky.

But the new year deadline was quickly extended.

Some industry insiders think Lee Frazier, St. Vincent's executive vice president of operations who also has CEO experience, is likely to be Reynolds' successor.

To that, Frazier says diplomatically, "I certainly understand the pressures of being a CEO and, at this time in my life, am very happy in my current role."

Nazareth officials have instituted a nationwide search.

Meanwhile, about a mile down Interstate 630 from St. Vincent, Baptist Medical Center was undergoing a few shake-ups, too.

Before the year was two months old, Baptist Medical System president and chief executive officer Russell Harrington Jr. found out his administrator was leaving.

Dale Collins resigned from Baptist on March 1 to become president and CEO of the Baptist Health System of East Tennessee in Knoxville.

March 1 also was the last day at Baptist for Ann Bayless, who resigned to direct St. Luke's Lutheran Hospital Foundation at San Antonio, Texas.

Harrington became the interim replacement for Collins until Steven Lampkin came from White River Medical Center at Batesville as part of Baptist's internal restructuring.

Baptist underwent a systemwide reorganization, restructuring top administrative positions at its major facilities in Little Rock, North Little Rock and Arkadelphia.

Harrington says the internal changes have been successful.

But all is not rosy for the Baptist CEO. He says running a profitable medical center is becoming more and more difficult in today's economic and political environment, not to mention Little Rock's highly competitive market.

Too often, he says, Medicaid and Medicare funds don't cover the cost of treatment.

On that point, most health-care directors agree.

"The cost of health care is increasing at a rate no one can afford, and the patients who will suffer ultimately will be individual patients," Dr. David Harshfield, chief of radiology at John L. McClellan Veterans Memorial Hospital, told Arkansas Business. "Physicians may feel governmental overhead and overzealous attorneys have produced most of the obstacles to delivering health care to their patients.

"Attorneys might say that doctors who are out of control and will do anything and everything to their patients are the root of the problem.

"The government merely wants the problem solved, but it is not even sure who is at fault."

What To Do?

Suggestions have been made for a socialized medicine program in the United States, much like that in Canada or several countries in Europe. Or, what about the implementation of a national health insurance plan -- with 40 percent of patient costs being picked up by the government and 60 percent by private sources?

Rising costs have not thwarted the mushrooming of private psychiatric hospitals.

In 1991 at Little Rock, CPC Pinnacle Pointe joined the BridgeWay and Charter Hospital as a private psychiatric facility.

CPC corporate executives played musical chairs with the administrative position at the brand spanking new Pinnacle Pointe before the interior decorating was done.

At the first of the year, Wanda Varady, formerly of Southwest Hospital and Charter, was administrator.

By February, Varady had been kicked down to marketing director and Kevin Blackwell was shipped in as administrator.

Then, Varady was gone and Helen Kern, another Charter alum, was marketing director.

Once settled, Pinnacle Pointe opened its doors April 8, two weeks late, and further glutted the market for private psychiatric care in Little Rock.

Both Charter and BridgeWay have had their share of problems.

Before Morse took over at Charter, the hospital's parent company had come under the scrutiny of the U.S. Department of Justice, which claimed that "certain Charter hospitals, between 1987 and 1989, submitted cost reports to Medicare ... that were intentionally overstated."

The theory was that some at Charter had inflated Medicare charges because inflated income figures allowed Charter to expand faster than it should have.

Charter Corp., based in Macon, Ga., also underwent a $1.7 billion restructuring program.

It did not help its image that the Charter Corp. once employed Larry Ashley, the former administrator at the BridgeWay who made headlines in April when he was alleged to have killed his wife.

Debbie Ashley was found shot to death in the trunk of her car at the Little Rock airport on April 10.

BridgeWay officials refused comment on the case.


At Southwest Hospital, young CEO Tim Hill, 31, helped the Little Rock facility celebrate its third birthday by celebrating a dramatic turnaround.

Losses at Southwest went from $7.5 million in 1988 to $2 million in 1990.

For his part, Hill, the youngest CEO in central Arkansas, earned recognition from Southwest's parent company, Safecare Health Services Inc. of Seattle, Wash.

While the Little Rock market underwent internal changes, the medical landscape changed more dramatically at other areas of the state.

The Northwest Arkansas Rehabilitation Hospital opened in August at Fayetteville; officials at Texarkana's St. Michael Hospital announced plans for a new, multi-million-dollar facility at a new address; and the historic St. Joseph's Regional Medical Center left downtown Hot Springs for new quarters farther west.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:1991: The Year in Review; medical service industry
Author:Webbs, Kane
Publication:Arkansas Business
Article Type:Industry Overview
Date:Jan 6, 1992
Previous Article:Down and out.
Next Article:Similarity in sales.

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