Paul Umbach, founder and president of consulting firm Tripp Umbach, discusses a report on Northwest Arkansas’ health care community during the NWA Council’s annual meeting Nov. 13, 2024 at John Brown University in Siloam Springs. (Antoinette Grajeda/Arkansas Advocate)
Northwest Arkansas needs more health care workers if the region’s medical sector is to serve a rapidly growing population, a report released Wednesday recommends.
The strain on health care services is expected to grow in Benton and Washington counties where the population, which surpassed 590,000 residents in 2024, is projected to top 1 million by 2050.
“Northwest Arkansas Health Care Vision 2030: Continuing the Transformation,” a report conducted by Tripp Umbach, was the focus of the NWA Council’s annual meeting at John Brown University in Siloam Springs Wednesday. The study builds on another report released by the Kansas City consulting firm in 2019.
When the NWA Council created its Health Care Transformation Division five years ago at Tripp Umbach’s recommendation, the region’s medical community was losing money as patients traveled to other areas for care. Since the division’s creation, patient outmigration has been reduced from nearly $1 billion in 2018 to $695 million in 2023, according to the report.
Approximately $529.5 million was invested in health care facilities from 2018-2023, including a $247 million expansion of Mercy Hospital Northwest Arkansas and a $217 million expansion of Washington Regional Medical Center.
To continue investing in the region’s health care system, the Vision 2030 report recommends advocating for higher reimbursement rates and a value-based care model that prioritizes patient outcomes, expanding health care specialty services, fostering collaborative health care research and innovation, and expanding the health care workforce.
Arkansas leaders work to close gap between medical school graduates and in-state residencies
“We need more health care employees plain and simple; we’re way way behind,” Tripp Umbach President and Founder Paul Umbach said. “…and while there has been growth in the number of health care employees, we’re about two to three thousand positions behind.”
Arkansas faces a physician shortage, a problem that’s likely to grow because 35% of the state’s physicians are over the age of 60. Arkansas also has a shortage of postgraduate medical residencies and because most physicians practice within 60 miles of their residency, the state will likely lose talent, according to the report.
Washington Regional Medical Center in Fayetteville has worked with the University of Arkansas for Medical Sciences on expanding residency slots by undertaking geographic wage reclassification with the federal Center for Medicare and Medicaid Services, which will allow Washington Regional to adjust its federally subsidized residency cap.
Arkansas lawmakers approved $12.5 million in 2020 to support the effort and has committed additional funding to expand residencies and fellowships across the state, according to the report.
Washington Regional has established 50 residency positions and will apply to the Accreditation Council of Graduate Medical Education once funding is made for 26 additional residency slots. Once fully implemented, the program will generate over $54 million in annual economic impact to the state, the report says. Each new physician will create 17.1 jobs, on average, and add $2.4 million to the local economy, according to the report.
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Umbach said funding for Graduate Medical Education (GME) is a big issue and officials need to continue advocating for funding to get all of the residency slots paid for. Hospitals and health care systems used to pay for GME out of their own pocket to make up for what they didn’t receive from the government; however, “the health systems here, because of the payment situation, don’t have an extra nickel to invest in GME,” Umbach said.
Arkansas has the lowest rate of payment for health care from Medicare and Medicaid, which means the state receives about “30% less dollars than we need to keep our health care system thriving,” he said.
Additionally, Arkansas is ranked 48th in health status (out of all 50 states and Washington D.C.), which means people are sicker and need more care, Umbach said.
“It’s kind of unfair when you have the most unhealthy population get the least amount of money for that unhealthy population while other states that are much healthier get way more money and they provide way more services to the people” he said.
While it’s important not to let the state and federal government “off the hook,” Umbach recommended looking at other sources of funding, such as an endowment, a public tax or philanthropy.
Larry Shackleford, Washington Regional’s president and CEO, told the Advocate he’s pleased with the quality of medical residents entering the program and he believes they’ll be successful in keeping them in Arkansas.
Shackleford said the startup funding needed for the aspirational goal of 200 residencies is around $12-$14 million and he anticipates working with Arkansas lawmakers to find some of the funding.
Northwest Arkansas medical school, institute aim for transformative health care model
“The ask is just for the one-time cost and so there will likely be some legislative things to do to try to get that funding in the next legislative session,” he said.
Besides expanding residency slots, projects valued at $1.3 billion are planned by 2030, including $109 million for the Orthopedic Surgery and Sports Medicine Center at UAMS Northwest and an $83 million expansion of Arkansas Children’s Northwest, according to the report.
The Alice L. Walton Foundation, Mercy and Heartland Whole Health Institute also recently announced a 30-year, $700 million partnership that will support construction of a new cardiac care center in Rogers, the development of an outpatient center for specialty care in Bentonville and efforts to recruit and retain top physicians.
The foundation’s namesake is a Walmart heiress and philanthropist who founded the Heartland Whole Health Institute and the Alice L. Walton School of Medicine in Bentonville. The purpose of the institute, which collaborated on the Vision 2030 report, focuses on “a whole health approach” to address the current health care crisis and aims to lower costs, improve quality and broaden health care access, according to a NWA Council press release.
The medical school, which is scheduled to open in July 2025, will complement efforts to address workforce shortages, but more work is needed with Graduate Medical Education to achieve the goal of training 200 residents by 2040, according to the report.
“This is our time to raise the bar, and it is a huge opportunity for the region economically, for our quality of life, all of these pieces of the puzzle, which is why there’s been so much work and planning and investment, and I believe that we’ve got every opportunity to be successful in this endeavor,” NWA Council Presiding Co-chair Todd Simmons said.
Northwest Arkansas’ health care sector has become a major economic driver. Its gross regional product (GRP) increased 80% from 2018 to 2023, outpacing overall regional economic growth by 37%, and it could reach $6.1 billion by 2030, according to estimates from Tripp Umbach.
Economic development is a key focus of the NWA Council, which was founded in 1990 by Sam Walton, J.B. Hunt and Don Tyson and several other business leaders.
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