By TESS VRBIN | Arkansas Advocate
Arkansas’ largest state-funded healthcare institution recently partnered with two rural hospitals in an effort to improve care, a move that health leaders say could provide a model for providers facing financial strain.
It’s one way hospitals statewide and nationwide are adapting to an increasingly difficult healthcare landscape that has forced hospitals to cut services or close entirely. There were 40 hospital mergers and acquisitions nationwide in the first half of 2026, one of the highest numbers in the same time span so far this decade.
The University of Arkansas for Medical Sciences will co-manage the Mena Regional Health System in western Arkansas and the Helena Hospital in the Delta. Administrators of both smaller hospitals said they’re optimistic that partnering with UAMS will enhance their ability to provide high-quality care.
“For the future, having some strong, solid partners that you can build some service lines or brand recognition with is going to become important,” Mena hospital CEO Paul Ervin said.
Within the past month and a half, Baptist Health acquired the Magnolia Regional Medical Center, acquired the South Arkansas Regional Hospital in El Dorado and transferred Baptist Health family clinics in four River Valley cities to the Springdale-based Community Clinic healthcare system.
“It’s been great for hospitals to maintain independence, but I just don’t see how that’s going to be a good model going forward,” Helena Hospital interim CEO Rex Jones said.
Hospitals face low reimbursement, rising costs
Arkansas hospitals receive among the nation’s lowest reimbursement rates from both private and government-run insurers, but labor, equipment and administrative costs have increased. Additionally, one parent company of multiple Arkansas health insurance plans will stop participating in the state’s Medicaid expansion next year.
Fewer payment sources strains the system because with more self-paying patients, “self-pay often means no pay,” UAMS Chancellor C. Lowry Barnes said.
Some hospitals have changed their number of beds or primary forms of patient care in order to get more federal Medicare and Medicaid funding. The Helena Hospital is classified as a rural emergency hospital, meaning it reduced inpatient services in exchange for more federal funds.
In November 2024, the Mena Regional Health System became a critical access hospital to get more federal funds for inpatient treatment of Medicare recipients. The Magnolia Regional Medical Center became a critical access hospital a year later.
Both facilities are located at least 35 miles from other hospitals, have no more than 25 acute care beds and provide 24/7 emergency care. As of January, there are nearly 1,400 critical access hospitals nationwide.
Critical access status was good for the Mena hospital financially, but partnering with UAMS gives it a new set of resources, including a radiology technician training program and a family medicine rotation, Ervin said.
Changes follow string of labor units closing in state
When asked for comment on Community Clinic’s acquisition of Baptist Health’s family clinics in Alma, Van Buren, Greenwood and Fort Smith, a Baptist spokesperson deferred to its June 30 announcement.
“Together, we are working toward a seamless transition that ensures patients continue to receive the trusted, compassionate primary care they know close to home while advancing our shared commitment to improving the health and well-being of the communities we serve,” Brandi Stewart, interim president and chief nursing officer of the Baptist Health Western Region, said in the release.
Community Clinic CEO Judd Semingson said in the release that the organization is committed to “listening first, showing up consistently and earning trust over time” in the River Valley.
Between April and June, Baptist’s Fort Smith hospital cut 150 jobs, shuttered several outpatient clinics and stopped providing a range of inpatient services, including oncology and pulmonary care, Talk Business & Politics reported.
The cuts came after Baptist Health-Fort Smith became Arkansas’ eighth hospital since 2020 to close its labor and delivery unit. The closures mean rural Arkansans face increasingly long drives to delivering hospitals, according to the Arkansas Center for Health Improvement.
Baptist’s footprint in western Arkansas has shrunk as its footprint in south Arkansas has grown. One of south Arkansas’ largest hospitals and one of the region’s few with a labor and delivery unit is the newly rebranded Baptist Health Medical Center-El Dorado.
The specifics of the new resources available to Baptist Health Medical Center-Magnolia are still to be determined, president and CEO William Giles said, but overall he is “surprised and thankful that Baptist came in and saved the hospital.”
Rural areas’ health needs
Fort Smith’s Mercy Hospital still delivers babies, but the closure of the maternity ward at Baptist Health-Fort Smith made the one in Mena even more important to western and southwestern Arkansas, a region lacking in maternal health resources, Ervin said.
Partnering with UAMS makes it easier for the Mena Regional Health System to care for high-risk pregnancies, Ervin said, thanks to UAMS’ perinatology and maternal-fetal medicine specialties.
Access to other specialty care such as cardiology and neurology will reduce the Mena hospital’s need to transfer patients to hospitals in larger cities, Ervin said, because they can determine someone’s need for a hospital stay via telehealth consultations with UAMS professionals.
“Many times [with] the patients that we do transfer out to another community, they get there and the specialists take a look at them and say, ‘Well, you know what? You’re fine. There’s really nothing serious. You can take care of this at home,’” Ervin said.
In Helena, Jones said “one of our bigger threats” to the healthcare landscape is that some local physicians are nearing retirement. He and Giles both said they hope mergers can help recruit new physicians.
“A lot of people have an idea, especially as a physician, ‘Perhaps I can’t make it in a rural area, or I don’t know if I really want to practice in a rural area,’ and so they don’t want to give it a try,” Jones said.
But, Jones said, rural medicine “can be extremely attractive, economically and just personally.”
Improving rural healthcare in any way possible is especially important in the face of federal Medicaid cuts, Ervin said. The One Big Beautiful Bill Act of 2025 slashes rural Medicaid spending by $15.5 billion annually over the next decade. The new law also imposes work requirements that are expected to cut thousands from Medicaid expansion.
Ervin said rural hospitals should prepare for an influx of debt-burdened, low-income patients in the coming years.
“Hopefully between now and then, there’s going to be some things done to try to shore up the shortfalls and keep people covered,” he said.
Arkansas Advocate is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.