Joplin, Mo.-based Freeman Health System has roughly doubled in size in a matter of months, but President and CEO Matt Fry is pairing that growth with a clear-eyed view of the financial environment nonprofit independent health systems face.
“The days of the Freeman Health Systems of the world turning a 5%, 6%, 7% margin are gone,” Mr. Fry said during an episode of the “Becker’s Healthcare Podcast.” “However, what we need to do is make sure that we’re turning what margin we can, because that’s how we then reinvest back into the organization, in our people, in technology, and to provide the level of care that our community really needs.”
Freeman Health, a nonprofit, locally owned and governed health system, completed its $110 million acquisition of four Northwest Arkansas hospitals from Franklin, Tenn.-based Community Health Systems on June 1. The transaction doubled Freeman Health’s hospital footprint and marked its entry into the Arkansas market.
The health system has quickly grown into a multi-state operator and now serves patients across four states: Missouri, Kansas, Oklahoma and Arkansas.
The expansion came less than a year after Freeman opened a 10-bed hospital in Fort Scott, Kan., bringing the 101-year-old health system to eight hospitals and about 9,000 employees across its growing footprint.
Now, Mr. Fry said the challenge is making that growth sustainable while navigating reimbursement pressure, higher labor and supply expenses and other industry headwinds.
“We have to be laser focused on our cost structure and our operating model. Then we have to be laser focused on being the provider of choice, so we’re generating enough revenue to provide either break even or slight margin,” he said.
That does not mean retreating from investment. Freeman Health is preparing to go live with Epic across its Missouri and Kansas operations at the end of October, with its newly acquired Northwest Arkansas operations expected to follow in fall 2027. The system has also implemented Workday enterprise-wide and continues to invest in imaging, cardiac catheterization and perioperative technology.
Clinical growth is focused heavily on areas where Freeman Health sees unmet demand across Southwest Missouri, Southeast Kansas, Northeast Oklahoma and Northwest Arkansas.
The system is expanding cardiovascular services, including interventional cardiology, cardiovascular surgery and TAVR; women’s health services, including OB-GYN, maternal-fetal medicine and neonatal care; and oncology. It is also preparing to begin treating patients with a newly installed linear accelerator in Southeast Kansas.
However, the health system’s most important investment over the next several years will be its workforce, according to Mr. Fry.
“First and foremost, our most important asset is our people,” he said. “We’ve put together a comprehensive strategic plan to invest in the human capital of this organization, both monetarily as well as non-monetarily. That is going to be absolutely critical for us as we continue to build a sustainable health system into the future. Everything hinges upon that.”
Operational efficiency is the other side of that strategy. Freeman Health is focused on identifying waste, improving efficiency and becoming more patient-centric as reimbursement pressures intensify.
“We need to be really great mindful operators,” Mr. Fry said. “We need to take care of our people. We need to meet our patients’ needs, and we need to be very conscious of what our patients require and how our patients want to be interacted with.”
That includes borrowing lessons from industries outside healthcare.
Mr. Fry pointed to Walmart and Amazon as companies he admires for innovating around consumer needs. Walmart, in particular, has paired broad accessibility with affordable products and a widespread physical footprint, though he acknowledged it has done so with “significant resources” that nonprofit health systems typically do not have at their disposal.
Within healthcare, he pointed to Rob Allen, president and CEO of Salt Lake City-based Intermountain Health and Warner Thomas, president and CEO of Sacramento, Calif.-based Sutter Health, as leaders whose approaches influence his thinking. He highlighted Intermountain’s ability to sustainably serve rural communities and Sutter’s expansion of ambulatory access across Northern California.
The common thread is meeting patients where they are — something Freeman Health increasingly views as essential to competing for patients and maintaining financial sustainability.
“We shouldn’t be afraid to consider patients consumers because at the end of the day, that’s what they are — they’re our customers,” Mr. Fry said. “Any good business that has good customer retention, they know that you have to meet your customers where they’re at in order to retain those customers and their loyalty and their business.”
For hospitals, that means getting the fundamentals right: high-quality care and easy access.
“We need to get back to the basics at Freeman Health System, and I would argue across the industry, and ensure that at our basic level, we are meeting our patients’ needs,” he said. “We’re providing unfettered access because that’s ultimately how we’re going to be selected when patients do have a choice, and there are other providers in the primary market or secondary market.”
Mr. Fry also sees another requirement emerging for health system CEOs: the ability to change direction quickly.
Healthcare has always experienced major shifts, but organizations historically had more time to adapt their strategies as those changes developed. That window has narrowed significantly.
“I feel like that has hit a rapid supercharge recently, and health system CEOs are needing to pivot rather rapidly,” Mr. Fry said. “And it’s really our job to make sure that our organizations are prepared for those pivots.”
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