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Academic Health and Hospital Operator Partnerships: Q&A With Dr. Bill Fulkerson and Bill Carpenter of Duke LifePoint Healthcare

Durham, N.C.-based Duke University Health System and Brentwood, Tenn.-based LifePoint Hospitals announced the formation of a Bill Carpenterjoint venture in Jan. 2011. The partnership, Duke LifePoint Healthcare, is designed to strengthen healthcare in the region by providing affiliation options for community hospitals. Since its formation, the joint venture has made strides in North Carolina's healthcare market, with two pending hospital deals – Maria Parham Medical Center in Henderson, N.C., and Person Memorial Hospital in Roxboro, N.C. – and the acquisition of nine cardiac catheterization labs from Charlotte, N.C.-based MedCath.

Bill Fulkerson, MD, executive vice president of Duke University Health System, and Bill Carpenter, Chairman and CEO of LifePoint Hospitals, say this partnership has a unique synergy and makes tremendous sense. Dr. Fulkerson and Mr. Carpenter spoke to Becker's Hospital Review about how they found one another as partners, their shared vision for community hospitals and what they believe makes a successful joint venture.

Q: Can you provide some background on this joint venture? How did Duke and LifePoint find one another?

Dr. Fulkerson: We have worked with LifePoint for three or four years. They invited us to come in and strengthen the cardiovascular program at Danville (Va.) Regional Medical Center, which is about 50 miles from Durham and has traditionally been a referral community for Duke. I think over that period of time, we really learned about LifePoint's tremendous commitment to quality, safety and outcomes. This partnership grew out of the affiliation we had in Danville and the positive outcomes that occurred there. There is a fairly unique synergy between LifePoint's management skill and our ability to work with them in clinical program enhancement.

Mr. Carpenter: Many hospitals in smaller communities are struggling and trying to survive and remain relevant in their communities. These hospitals are such viable parts of their communities, and many of them have sought Duke for advice because of the reputation Duke has in the region, and even beyond the region. Our affiliation in Danville let us get to know each other. So, as community hospitals are trying to figure out alternatives and because of the successful affiliation we had in Danville, Duke and LifePoint developed this joint venture.

Q: What do you think each organization brings to the venture that would be difficult to achieve independently?

Dr. Bill Fulkerson: We feel there is real synergy around LifePoint's strengths and our strengths. LifePoint's commitment to quality and safety is second to none. Together, we can help community hospitals develop stronger programs than they have historically ever had.

Mr. Bill Carpenter: LifePoint owns and operates 52 hospitals in smaller communities, and we provide a full range of management, financial and operational resources. We provide access to capital so hospitals can invest in new technology. These are the things that are important in small communities that let people feel good about staying closer to home for care. Duke, though, offers hospitals a level of clinical oversight and guidance that is unmatched. It also offers access to highly specialized medical services that simply won't ever be provided in a community hospital.

Q: What advice would you offer to healthcare providers contemplating or launching joint ventures?

Mr. Carpenter: Find a compatible partner. Be clear about roles and goals. Rely on each other's strengths. Be flexible. Going into this, we knew we had a plan, but we also knew everything wouldn't go exactly as planned. From LifePoint's perspective, we've found a compatible partner in Duke. When things don't first go the way we expect them to, we'll discuss it and be flexible.

Q: What are some of Duke-LifePoint's long-term goals?

Mr. Carpenter: Our goal is to acquire, own and operate hospitals in North Carolina and the surrounding region. We don't have a set number in mind. As [Dr. Fulkerson] said, we have announced agreements with two hospitals and the purchase of nine cath labs. What we want to do is build a system of hospitals that will transform healthcare in this region and enhance the services available to people in our communities. We think the Duke-LifePoint partnership is an extremely powerful vehicle to accomplish that.

Q: Can you provide some insight as to the challenges community hospitals are facing?

Mr. Carpenter: We're seeing community hospitals around the country struggle with access to capital and have a difficult time recruiting physicians. There have been many changes in the healthcare industry, and much of that has been brought on by healthcare reform and regulatory changes. Community hospitals are really feeling pressure under the HITECH Act, also. They want to know how they can continue to recruit physicians and find capital for improvements, such as state-of-the-art equipment and technology. With reimbursement decreases and all of these other pressures, community hospitals are seeking the support and security of a partner, and we hope many in North Carolina and the region will choose us to help them meet these challenges.

Dr. Fulkerson: I think independent hospitals, especially smaller ones, are simply going to struggle without the scale necessary to respond to these challenges. Hospitals need the scale that allows them to draw on a system’s resources, access purchasing and contracting power, and take advantage of infrastructure support for HIT. They also need stability, in regards to physicians and finances, so they can do necessary recruitment. Physicians will migrate to areas they feel are growing and stable.

Q: This is one of the first partnerships between an academic health system and a hospital operator. Do you think we can expect more of these to come?

Dr. Fulkerson: I'd be surprised if similar models aren’t developed. Our idea and partnership may be new, but it makes tremendous sense. It leverages both of our talents in a very productive way. I suspect we'll see more partnerships like this around the country.  

Mr. Carpenter: We believe the scale achieved in regional areas will be very important in the future. So LifePoint is looking for some more relationships across the country to help our company grow. I do think this is an innovative model, and LifePoint is excited to be part of it. We think this is one of the answers for how to improve healthcare in the future.

Related Articles on Duke LifePoint:
Duke, LifePoint Joint Venture to Acquire North Carolina's Person Memorial Hospital
Duke and LifePoint Partner, Announce First Acquisition
Duke, LifePoint Joint Venture Acquires Cath Labs From MedCath

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