THIS JUST IN FROM UAMS, AN EMAIL GOING TO STAFF:
Dear UAMS Family,
We are preparing to make a public announcement that I wanted to first share with you. UAMS and St. Vincent Health System have reached the end of the exploration of a strategic alliance between our two institutions. Despite the good faith efforts of everyone involved, neither entity has been able to define a pathway that meets the goals of both institutions.
Therefore, I and other members of the UAMS leadership team, are recommending to the University of Arkansas Board of Trustees that UAMS end negotiations on a strategic alliance with St. Vincent Health System. We began discussions with St. Vincent leaders several months ago in an effort to determine if there was a way to advance our shared vision and purpose of improving the health and health care of the people of the state of Arkansas through a strategic alliance. While we are ending these discussions, we will keep the door open for other ways in which we might work together in the future.
Dan Rahn, M.D.
A brief formal media statement in behalf of both institutions repeated the message given earlier to UAMS staff. St. Vincent has not issued a separate statement and a spokesman said there'd be no further comment today. We've also asked UAMS for elaboration on where sticking points might have risen.
The story doesn't end here. Both hospitals indicated an alliance could be critical to improving the financial stability of both hospitals and undoubtedly both will continue to look for ways to increase revenue and reduce costs. Combinations in cardiac and cancer treatment services were high on the list of potential co-operative ventures. The alliance faced problems from the outset that have arisen in other states, where hospital mergers continue apace. St. Vincent operates according to policy beliefs of the Catholic Church. These affect services such as abortion, tubal ligation, contraception, end of life care and others. Many of these are services the public institution provides. UAMS furthermore has constitutionally independent status under Arkansas law and questions were raised about its ability to cede any form of control to a private institution, even shared management authority. As you'll see from an earlier post, St. Vincent, among others, had proposed corporate control of some aspects of merged operations.
UPDATE: Though St. Vincent spokesmen either didn't return calls or said the hospital would have no further statement today, its CEO Peter Banko did provide a prepared statement to Arkansas Business. He said he still thought an affiliation with UAMS made sense and St. Vincent would be happy to discuss it.
We'd reported this earlier in the day before this development was known:
Joann Coleman of Little Rock, who's been closely following the talks between UAMS and St. Vincent Health to combine parts of their opertions, has passed along the latest response from UAMS to one of her Freedom of Information Act requests.
It includes an outline dating back to June from UAMS on its ideas for combination. Then, from July 16, is a skeletal outline from St. Vincent.
St. Vincent's recent three-page proposal is the most interesting. It says the institutions need to "face the market" as "one" to make the best use of integration. But it emphasizes also the need for each institution to retain its key characteristic — Catholic and nonprofit in St. Vincent's case. The proposal talks of shared leadership and governance, though envisions St. Vincent providing "all corporate services." St. Vincent envisions completing an agreement by the end of this year.
More here in a University of Arkansas System FOI response, including the outline of a tenative proposal and a contract with Hogan and Lovells, a Washington law firm advising UAMS, for $1.2 million.
I've only skimmed. Please take a look. Comments welcome.
I'd add that I was a bit surprised by a recent new proposal from St. Vincent. The removal of a discussion of the topic from a UA Board meeting this week didn't seem to bode well for the future of getting this deal done.