UAMS' Rahn: report suggests "real financial opportunity" | Arkansas Blog

UAMS' Rahn: report suggests "real financial opportunity"



Chancellor Rahn
  • Chancellor Rahn
UAMS Chancellor Dan Rahn says Deloitte Consulting's estimate that UAMS and St. Vincent could see savings between $38 million and $63 million by affiliating presents a "real financial opportunity here."

Rahn said UAMS will need to perform a "deeper analysis" internally in some areas before deciding to go forward, testing assumptions made by Deloitte in the report. One of those assumptions is that UAMS and St. Vincent will form a "jointly-held operating entity" to reach the predicted savings. Rahn said the entities need to decide on an affiliation model; however the affiliation takes place, it will have to comply with federal anti-trust regulations. It will also have to be approved by the Board of Trustees of the University of Arkansas System, which is expected to discuss the report at its retreat in March. Rahn said the hospital has set a deadline of mid-April to decide whether to continue to explore affiliation.

Of the savings, how much comes from UAMS and how much from St. Vincent? If St. Vincent can forego buying expensive equipment because it can use the equipment at UAMS, as the report suggests, isn't UAMS — the state — subsidizing a private hospital?

"We're not talking about cross-subsidizing," Rahn said. "Whatever we would set up would not involve cross-subsidizing." The chancellor said the answer to the question of whether savings on the part of St. Vincent isn't a de fact subsidy would require him to "speculate on structures not yet in place." He declined to answer on what each hospital could save based on Deloitte's numbers, and St. Vincent's revenues and earnings are redacted from the public version of the Deloitte report, so it would not be possible to calculate how each hospital would benefit from its current bottom line.

The report also suggests that changes would be necessary to make physician pay equitable in affiliated services, like cardiology and cancer. How would that work? Rahn said he could not answer that question.

Again, Rahn stressed that though the state institution may affiliate with a private Catholic hospital, whose directives do not allow abortion under any circumstance, or tubal ligation, or vasectomy, and where end-of-life directives will not be followed, there will be "no changes in the scope of clinical practice, ethics, decision-making on part of physicians and other health professionals" at UAMS. "These are not issues that are under discussion."

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