Joplin, Mo.-based Freeman Health System has doubled its hospital footprint and grown into a four-state operator, closing a $110 million acquisition of four Arkansas hospitals from Franklin, Tenn.-based Community Health Systems on June 1.
The deal takes the nonprofit, independent system from four hospitals to eight and marks its entry into the Arkansas market. The system also operates two hospitals in Joplin, one in Neosho, Mo., and one in Fort Scott, Kan., that opened in September.
The four newly acquired hospitals were part of CHS subsidiary Northwest Health, based in Springdale, Ark. They include:
- Northwest Medical Center–Bentonville (128-beds)
- Northwest Medical Center–Springdale (222-beds)
- Siloam Springs Regional Hospital (73 beds)
- Northwest Medical Center-Willow Creek Women’s Hospital in Johnson (64 beds)
For Matthew Fry, president and CEO of Freeman Health, the rationale starts with demographics. The hospitals sit in Northwest Arkansas, a metro area of more than 600,000 people that is growing about 2.5% a year and is projected to surpass 1 million residents by 2045 to 2050.
“The needs in that community are continuing to grow, and we want to be there to meet the needs of the communities we serve,” Mr. Fry told Becker’s. “[Northwest Arkansas] is an adjacent neighbor of ours that we know we can bring some value and expertise to.”
Mr. Fry sees the move as an extension of Freeman Health’s rural mission rather than a leap into an unfamiliar market.
“In the four-state area — Missouri, Kansas, Arkansas and Oklahoma — there are access-to-care issues that most of rural America is dealing with,” he said. “Although we have some decent-size metro service areas, we are still rural in many respects.”
He said the geographic fit made the case straightforward.
“The synergies were undeniable, and it allows for us to increase access to care across southwest Missouri and southeast Kansas,” Mr. Fry said. He pointed to the Bentonville hospital’s Leapfrog “A” safety grade as an asset Freeman Health wants to learn from, calling the exchange of best practices “bi-directional.”
Making eight hospitals feel like one
Freeman Health has already moved the four hospitals onto its Workday system for supply chain, finance and human resources. The system plans to begin building out Epic across Northwest Arkansas as early as next month, with a go-live target of November 2027 that would put all eight hospitals on a single EHR. Freeman Health is implementing Epic in its home market at the end of October.
Mr. Fry said cultural alignment is the harder and more important task.
“Cultural integration is one of the most critical components that is make-or-break for any successful acquisition,” he said. “It’s something that’s very top of mind for us.”
The four hospital CEOs/CAOs have begun joining his weekly executive leadership team meeting, and Freeman Health will stand up a market structure this fall and launch a five-year strategic plan for Northwest Arkansas.
That plan will follow the same five-point framework Freeman Health rolled out across southwest Missouri and southeast Kansas in November. The first pillar is excellence in care, honing in on patient safety, patient experience and a safe environment for staff and clinicians. The second is people first.
“We’re finding ways to invest in our people — both monetarily and non-monetarily — to take care of them and ensure they have enriching careers at Freeman Health,” he said.
The third is strategic growth, the pillar that spawned out of the planning process and is now visible in the Arkansas acquisition.
The fourth pillar is community engagement, which Mr. Fry described as “time, treasure, talent” and leaning into local events beyond writing a check. The fifth is operational integrity. Freeman Health is rolling out lean process improvement across the enterprise after starting in its home market, an effort that aims to eliminate waste and improve safety, culture and efficiency.
“We want to be really good stewards of the resources that have been bestowed upon us,” he said.
Why more rural systems may take a page out of this playbook
For health system leaders watching the deal, Mr. Fry’s read on where this is headed is another story. He expects more independent systems — particularly rural ones — to pursue multistate expansion as cost pressure builds.
“Reimbursement is a continual challenge that health systems are facing, particularly smaller health systems that don’t have the balance sheets to absorb these large shocks,” he said, citing rising supply, pharmaceutical and labor costs, including the expense of locums and travelers in hard-to-recruit rural areas. Operating across several states, lets a system spread overhead and reduce it as an overall percentage of its operations.
“I think every health system is actively looking for opportunities to become more sustainable and more viable for the long term,” he said. “Smart growth is a strategy that many of us see as necessary.”
Mr. Fry returned to local control as the system’s selling point across its expanding map.
“We are a locally owned, locally governed health system, and I think that’s a strength that people in the four-state area here really are looking for,” he said. “That’s not changing.”
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.