Novant Health seeking more expansion in Georgia

Print Friendly and PDF By: Andy Miller Published: Oct 31, 2012

North Carolina-based Novant Health made waves in Georgia health care recently when it struck a partnership deal with Memorial Health in Savannah.

But Novant already had a substantial footprint in Georgia health care. It operates 20 medical imaging centers in Georgia, mostly in metro Atlanta, through its MedQuest subsidiary.

Novant is not the only nonprofit, out-of-state health system to make a recent incursion into Georgia. Earlier this year, Minnesota-based Mayo Clinic established a presence in South Georgia, absorbing a hospital in Waycross.

Interstate deals like these are just one aspect of hospital consolidation, a process that has changed the health care landscape in Georgia and other states in the past year.

Novant is considered among the most aggressive nonprofit health organizations. And the company says it will seek to expand further in Georgia.

“We’re very interested in Georgia,’’ Mark Billings, president of Novant Health Shared Services, told GHN on Wednesday. “We’ve had a number of CEOs in Georgia reaching out to [Novant] in the last few months.’’

Growth in Georgia could include partnerships with existing organizations, similar to the one with Memorial Health, or even constructing new facilities, Billings said.

Novant’s network includes 13 hospitals and a medical group consisting of 1,124 physicians in 355 clinic locations. It has annual revenues of more than $3 billion. It focuses on four states: North Carolina, South Carolina, Virginia and Georgia.

Presbyterian Healthcare is one of two major health systems in the Charlotte area. A leading spokesman for Presbyterian is basketball great Michael Jordan, who grew up and began his sports career in North Carolina.

Craig Savage of the consulting firm Ascendient Healthcare Advisors, based in North Carolina, noted that Novant “is not afraid to go out of state.’’

“They behave more like an investor-owned system than anyone else,’’ Savage said. “They have been shopping more proactively in surrounding states.’’

Memorial Health, which includes the 530-bed Memorial University Medical Center in Savannah, will retain its independence and local management structure under the partnership with Novant.

Maggie Gill, Memorial Health’s president and CEO, told the Savannah Morning News that the agreement will allow Memorial to negotiate lower prices in its purchasing and potentially get better reimbursements when talking to insurance companies.

Memorial will be able to use Novant’s financial strength, including access to capital, and infrastructure in the long term, Gill said. In return, Memorial will pay a fee to be part of the Novant system, she said.

 

Growth not always smooth

The Winston-Salem-based Novant has experienced some financial bumps recently. In late May, the company announced it was laying off 289 employees, including 150 in the health system’s Winston-Salem market.

On April 2, it reported net income of $1 million in fiscal 2011, compared with $158 million in 2010 and $197 million in 2009, the Winston-Salem Journal reported. Although operating revenue rose 2 percent to $3.45 billion in fiscal 2011, expenses were up 3 percent to $3.43 billion.

Novant opened new hospitals in two North Carolina communities in 2011: Kernersville Medical Center in Kernersville and Brunswick Novant Medical Center in Bolivia, which replaced an older hospital.

It also announced plans to spend $600 million to $700 million over the next four years on its electronic medical records initiative.

Novant’s Billings noted that the hospital consolidation trend isn’t slowing down. “Our industry is evolving and changing,’’ he said. Expansion can ‘‘spread our overhead across a broader footprint.’’

Novant’s mission, he added, is to “provide remarkable care at an affordable price.’’

Novant bought MedQuest in 2007. These centers offer magnetic resonance imaging (MRI), computed tomography (CT), nuclear medicine, ultrasound, mammography, bone densitometry, fluoroscopy and X-ray services.

“We’re the largest outpatient imaging provider in metro Atlanta,’’ Billings said, and the locations provide ease of access for patients, he added.

 

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