Michael Tilley of Talk Business & Politics joined Ozarks at Large to look at the week's top stories out of Fort Smith.
Kyle Kellams: One of the big stories for the state of Arkansas and all of the River Valley is Baptist Health closing labor and delivery operations and ending obstetric services at the Fort Smith hospital. What's been the reaction there?
Michael Tilley: Well, the reaction to that part of the story may not even be the key part of the story, although it's very troubling, and I'll get into it. But this started more than a couple of weeks ago. I was alerted almost two years ago to noise about Baptist having issues in Fort Smith, about them seeking solutions to address their financial issues. One solution that I'm pretty confident happened was that they were considering building a new, smaller hospital campus out at Chaffee Crossing, possibly leaving maybe a small clinic or an E.R. facility at their existing location near downtown Fort Smith.
Just for context, that whole Sparks — well, Sparks before it was anything else — but the hospital that Baptist Health owns, that was originally that campus. When that was selected, that was the heart of Fort Smith. That was the hospital. It was where you were in the midst of most of what we would then call residential subdivisions. Most of the higher economic class, social class — that was their hospital. But that has changed over the years. It now has a lower payer mix, essentially a lower socioeconomic customer. The more affluent go to Mercy or other places. So it's become a tough spot for Baptist. And there were two equity owners — Community Health and, I just went blank on the other — that tried their hand at that location before and couldn't make it work and sold it.
But a few weeks ago, a Baptist Health executive spoke to a civic club about potential moves the hospital system may make, and they were pretty alarming. But Baptist wouldn't comment, which is puzzling to me. I know it puzzles you. You've got just as many years as a journalist — an organization thinks it can come talk to a room full of doctors and former doctors and the word not get out.
The primary issue that we're hearing is that the hospital faces a poor payer mix, that it lost around $25 million last year, and so far through 2026 has lost about $7 million. That they're thinking about ending conventional inpatient hospital services and just going to more of an emergency room, limited surgery center, maybe limited clinic operation. So we put that story out. Several other media outlets put that story out. Baptist denied it, even said not only is it not true, but we plan on investing $20 million. We are going to make some changes. They kept saying we will have some transitions, but we're going to invest $20 million, and overall it will be a positive — but they wouldn't provide any details. I pressed them. Some of my other media colleagues pressed them, but they would not provide any details.
Well, a few days later, they dropped this bomb. As you noted, they're going to end labor and delivery services and OB-GYN services on April 28, at the end of this month. That is just going to be tough for a lot of folks. Baptist says they have about 20 births a month on average there. I'm hearing from some folks that it's more than 20. That's a huge concern. It's a very critical service being eliminated. Where do those mothers and families go? It remains unclear if Mercy can handle that shift in demand. Northwest Arkansas, Tulsa, Little Rock, maybe a few smaller hospitals in the region — but that's a lot of demand to absorb.
I have two kids. I've been through this twice. I can't imagine being 20 to 30 weeks pregnant and learning that all your medical support, everything you've been working through, everything you've been depending on, is gone. So that's a sad, disturbing human element to this. And what we don't know is what other big news will drop. Baptist has been very coy, very vague — not only with the media, but I've talked to community officials, elected officials, and I think they're just as frustrated about what they're not hearing from Baptist. I think City Director Christina Catsavis is the most vocal. She's called them out, saying that look, you're a nonprofit providing critical services. You have an obligation to keep the community informed.
It's just very troubling. Up until this, Fort Smith was a two-hospital system, both providing a robust set of services. And this is trending toward the city just being a one-hospital system, which is not good for anyone, even that one hospital.
Kellams: It's not just the city — it's a metro area estimated at up to 280,000 people plus surrounding counties.
Tilley: And you get people from as far away as Johnson County coming here for services, and a big swath of eastern Oklahoma. So it's going to be a problem. I hope that's the only service that drops. I've been told it's not, but I hope that. I hope my sources, who have so far been almost on target, I hope they're eventually wrong.
But this also reminds me a little bit of the Whirlpool situation. Whirlpool deflected — "Hey, no, we're not moving." They even blamed the media for causing unnecessary stir. "We're going to keep investing. We are committed 100%." And they were committed to Fort Smith until the day they weren't. I just hope that's not the same outcome with Baptist.
Kellams: It's not often we talk about a city able to save money in these times, but if you go to talkbusiness.net, you find out about a savings of $3 million for Fort Smith. What's behind this?
Tilley: A young man named Chris Hoover is behind that. The city of Fort Smith a couple of years ago received a $12 million federal grant that was largely pushed by the office of U.S. Sen. John Boozman. It's to help the city with a water transmission line project — about a 36-mile project. Depending on which engineering report you look at, it's anywhere from $200 million to $500 million overall.
They received this $12 million a couple years ago, and as they were going through the process to comply with it, Chris Hoover — who was hired in October 2023 as the city's grants and government relations manager — was going through some of the paperwork, making sure they had all the T's crossed and I's dotted, and found some language about a waiver exemption. Because the $12 million grant came with a 25% matching requirement — so the city had to put up $3 million. He found that one of the exemptions was if 11.7% or more of your population receives SNAP benefits, also known as food stamps, then that $3 million matching requirement can be waived. So he did some research, found that Fort Smith was at 13.3%, submitted the waiver, and the EPA quickly approved it. That's a $3 million savings. The city will still put that toward the transmission line, but it doesn't have to come out immediately. So it gives the city $3 million to be flexible with.
This is interesting for a couple of reasons. I can remember when Chris was hired back in 2023, there were some folks who are always at Fort Smith board meetings who were very much against it: "We don't need this, this is just more bureaucracy." Well, he was hired at a salary of $72,000. I believe he could probably just not work for another 10 years and still have more than made up for what he cost the city. So I'm glad we got a chance to talk about this, because sometimes we talk about things that don't go right in municipal government. This is one thing that certainly went right.
Kellams: And speaking of money — Fort Smith's share of the 1% Sebastian County sales tax in the first months reported in 2026: up 5%. That's a good sign.
Tilley: It is a good sign. The last couple of years it's been a little bit of a struggle. Coming out of COVID, sales tax revenue in Fort Smith — well, not just in Fort Smith, but statewide — a lot of cities was pretty robust. People weren't traveling, so they were spending money on services and food, things that are taxable. The last year or two that revenue has moderated, and of course, back to some people who like to show up and sound off — they've been trying to say this is a sign that Fort Smith is moving in the wrong direction. But the first two months: the city share of the 1% countywide Sebastian County tax totals almost $4.3 million. That's up 4.8% compared to the same period in 2025. The city's 1% sales tax, which supports consent decree work but primarily street and bridge and drainage work, for the first two reporting months was $5.1 million. That's up 2.6%. Two months is not a trend, but it's a good healthy start. And for a city that has struggled in the last couple of years to balance budgets and pull in enough revenue to cover basic essential services, this is a good start.
You can read about all of these items and more at talkbusiness.net.
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